Review By on September 27, 2014
Starlit Power Systems Limited (SPSL) belongs to diversified Starlit Group. It is engaged in Smelting of Battery & Lead Scrap, manufacture, supply and export of pure lead, different Lead Alloys like Calcium Aluminum alloy Antimonial Alloy and Selenium Alloy, Lead Oxides like Lead Sub Oxide and Red Lead. SPSL has the smelting capacity of 15000 MT per annum and refining/alloying capacity of over 12000 MT per annum with technical capacity to convert assorted heterogeneous lead scrap into pure lead of up to 99.98 % purity.
It uses its captive producer gas as a fuel for all smelting and refining operations thereby considerably reducing dependence on Hydro-carbons like furnace oil and diesel. The biomass gassifier technology is Developed by TERI and approved by Ministry of New & Renewable Energy, Government of India.
Recently, SPSL has commissioned its battery project with the capacity to produce 10,000 batteries for automotive and inverter applications. Lead being an essential input in battery manufacturing and comprising over two-third of the battery cost, for this forward integration of converting the Company produced lead into batteries was a logical step forward for the Company. This project has gone on stream in July, 2014.
To part finance its needs of corporate funds, the company is coming out with an IPO of 1640000 equity share of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 2.95 crore. Issue opens for subscription on 29.09.14 and will close on 10.10.14. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Issue is lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post issue, shares will be listed on BSE SME. Present paid up equity capital of the company is Rs. 4.48 crore that will enhance to Rs. 6.12 crore post IPO.
On performance front, it has posted turnover of Rs. 30.58 crore (2012-13) and Rs. 42.62 crore (2013-14) with a net profit of Rs. 0.30 crore and Rs. 0.04 crore respectively. If we attribute latest earnings on fully diluted equity post IPO then asking price is at a P/E of 180 which makes it a costly bet.
On merchant banker’s front, this is the 6th mandate and past mandates have mixed trends.
Avoid this costly bet that also has entry barrier on application as well as on trading post listing.
(Disclaimer: Author has no plans to invest in this IPO)
Review By on September 27, 2014
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Starlit Power Systems Ltd. offers an early investment opportunity in Starlit Power Systems Ltd.. A stock market investor can buy Starlit Power Systems IPO shares by applying in IPO before Starlit Power Systems Ltd. shares get listed at the stock exchanges. An investor could invest in Starlit Power Systems IPO for short term listing gain or a long term.
Read the Starlit Power Systems IPO recommendations by the leading analyst and leading stock brokers.
Starlit Power Systems IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Starlit Power Systems IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Starlit Power Systems IPO?"
Our recommendation for Starlit Power Systems IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Starlit Power Systems IPO.
The Starlit Power Systems IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Starlit Power Systems IPO allotment status to check.
