Review By Dilip Davda on August 29, 2012
While we have 10th BSE SME platform IPO of Comfort Commotrade opening on 05.09.12, we have first IPO from Thejo Engineering Ltd for listing on NSE (SME) EMERGE platform.. Thus with this issue, NSE is breaking the ice for small IPOs. Details of this IPO are as under:
Thejo Engineering Ltd. (TEL) is the Chennai based light engineering company engaged in providing engineering solutions for bulk material handling, mineral processing and corrosion protection in core sectors like mining, power, steel, cement, ports, fertilizers etc. Thus it is one of the few companies in sub continent offering all major solutions under one roof. The Company has 4 manufacturing units in and around Chennai with a pan India presence through 11 branch offices and 36 site offices. TEL's presence through partnerships and distribution network extends across Australia, Kingdom of Saudi Arabia, the USA, Germany, Chile, Brazil and Ghana.
The company now mulls expansion in global reach and setting up subsidiary at Australia, putting up a manufacturing unit for polyurethane for captive consumption, setting up a lining division and general corpus fund. To part finance this to the tune of Rs. 21 crore, the company is offering around 488370 equity shares of Rs. 10 each within a price band of Rs. 402-430. Issue opens for subscription on 04.09.12 and will close on 06.09.12. Post allotment; the shares will be listed on NSE EMERGE platform. Issue is lead managed by IDBI Capital Market Services Ltd. and Cameo Corporate Services Ltd is the registrar to the issue. CRISIL has rated this IPO as 'SME 5/5' indicating excellent fundamentals of the company. Thus even though rating was not mandatory, the company has gone for it for more transparency.
As far as Lead Manager's track records are concern, out of last 16 IPO mandates it has only 50% IPOs gave listing gains. Thus it has 50:50 ratio of success.
On the performance front, TEL has posted an average EPS of Rs. 52.32 for the last three fiscals. For the year 2011-12 EPS stands at Rs. 76.17. The company issued 1 for 2 bonuses in 1994 and 2001. Its current equity of Rs. 1.24 crore is supported by free reserves of Rs. 28.76 crore. Even if we take fully diluted equity post IPO the issue is being made at a P/E of around 8 and below 2 P/BV. Thus the issue is low risk-high return one.
Review By Dilip Davda on August 29, 2012
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 Thejo Engineering Ltd. offers an early investment opportunity in Thejo Engineering Ltd.. A stock market investor can buy Thejo Engineering IPO shares by applying in IPO before Thejo Engineering Ltd. shares get listed at the stock exchanges. An investor could invest in Thejo Engineering IPO for short term listing gain or a long term.
Read the Thejo Engineering IPO recommendations by the leading analyst and leading stock brokers.
Thejo Engineering IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Thejo Engineering IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Thejo Engineering IPO?"
Our recommendation for Thejo Engineering IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Thejo Engineering IPO.
The Thejo Engineering IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Thejo Engineering IPO allotment status to check.
