Review By on March 7, 2018
Tara Chand Logistic Solutions Ltd. (TCLSL) is engaged in providing reliable and affordable logistic and supply chain services including Transportation and Warehousing, Equipment Rental and Steel Processing and Distribution. Company’s business verticals serve a broad range of industries, including steel, urban and rural infrastructure, oil and gas, renewable energy etc. As of December 31, 2017 its transportation fleet included 42 owned trailers and equipment rental fleet included 292 owned cranes ranging from 10 MT-800 MT lifting capacity. Company owns automated steel processing machineries like shear line, twin master, robo master, compressor, de-coiling machines etc. totaling to 32. TCLSL’s major clientele includes Reliance industries ltd., Larsen & Toubro Ltd. (seven Independent Companies), Steel Authority of India Ltd., Rashtriya Ispat Nigam Ltd., Oil and Natural Gas Corporation Ltd., Tata Projects Ltd., Hindustan Construction Company Ltd., Vedanta Ltd., J Kumar Infraprojects Ltd., NCC Ltd., Welspun Corp, ITD Cementation India Ltd., Bharat Heavy Electricals Ltd., Gayatri Projects Ltd, Megha Engineering & Infrastructures Ltd. As of December 31, 2017 it had 1167 Employees.
To part finances its repayment of certain debts, purchase of capital equipments, working capital, general corpus fund needs, TCLSL is coming out with a maiden IPO of 3720000 equity shares of Rs. 10 each at a fixed price of Rs. 55 per share to mobilize Rs. 20.46 crore. Issue opens for subscription on 13.03.18 and will close on 15.03.18. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Hem Securities Ltd. and Sharex Dynamic (India) Pvt. Ltd. is the registrar to the issue. Issue constitutes 27.26% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs. 10.52 and Rs. 14.06 per share. Having issued equity at par since inception till March 2014, it raised further equity at a price of Rs.32 per share in August 2017. Post issue its current paid up equity capital of Rs. 9.93 crore will stand enhanced to Rs. 13.65 crore.
On performance front, TCLSL has posted turnover/net profits of Rs. 23.98 cr. / Rs. 0.66 cr. (FY14), Rs. 39.25 cr. / Rs. 0.69 cr. (FY15), Rs. 46.22 cr. / Rs. 1.19 cr. (FY16) and Rs. 52.65 cr. / Rs. 2.63 cr. (FY17). For first nine months of the current fiscal ended on 31.12.17 it has earned net profit of Rs. 3.66 cr. on a turnover of Rs. 54.18 cr. Thus first nine months top and bottom line has crossed previous entire year’s performance. Its net profit margins have increased from 2.77% in FY14 to 7.05% in FY18 (first nine months). For FY13 to FY17 its revenue and net profits has seen CAGR of 23.17% and 47.21%. Major clients contribute nearly 55% in TCLSL’s revenue. For last three fiscals it has reported an average EPS of Rs. 1.96 and an average RoNW of 12.95%. Issue is priced at a P/BV of2.65 on the basis of its NAV of Rs. 20.78 as on 31.12.17 and at a P/BV of 1.83 on the basis of its post issue NAV of Rs. 30.11. If we annualize latest earnings and attribute it to fully diluted equity post issue then asking price is at a P/E of around 12 against industry composite of 34 plus. As per offer documents, it has shown Lancer Container and Tiger Logistics as its listed peers and they are trading at a P/E of 57 and 20 respectively (as on 07.03.18). It has order book of Rs. 154 crore as on 30.01.18.
On merchant banker’s front, this is the 35th mandate from its stable in last three years. Last 10 listing opened at a premium ranging from 2.66% to 20% on the day of listing.
Considering mega spending on infra projects by the government, this company is poised for bright prospects going forward. It has good client base and order book position. Investors may consider investment for short to long term.
Review By on March 7, 2018
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 Tara Chand Logistic Solutions Ltd. offers an early investment opportunity in Tara Chand Logistic Solutions Ltd.. A stock market investor can buy Tara Chand Logistic IPO shares by applying in IPO before Tara Chand Logistic Solutions Ltd. shares get listed at the stock exchanges. An investor could invest in Tara Chand Logistic IPO for short term listing gain or a long term.
Read the Tara Chand Logistic IPO recommendations by the leading analyst and leading stock brokers.
Tara Chand Logistic IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Tara Chand Logistic IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Tara Chand Logistic IPO?"
Our recommendation for Tara Chand Logistic IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Tara Chand Logistic IPO.
The Tara Chand Logistic IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Tara Chand Logistic IPO allotment status to check.
