Review By Dilip Davda on May 24, 2016
United Polyfab Gujarat Ltd (UPGL) was initially engaged in the trading business of Grey cloth fabrics. The company commenced the manufacturing/weaving of Grey denim, Grey shirting fabric and cotton grey fabric in October, 2013 At present, UPGL is having 42 Airjet automatic Looms having capacity to manufacture/weaving upto 28896 meters grey denim/grey fabric/cotton grey fabric per day in 3 shifts. Company operates at its average capacity of 7,00,000 meters per month. Now as a part of backward integration the Company is setting up spinning unit with an installed capacity of 20064 spindles for which company has already purchased land admeasuring area of 15,935 sq. meters at village Timba, Daskroi, Ahmedabad.
To part finance setting up of spinning unit and to raise general corpus fund, the company is coming out with a maiden IPO of 1701000 equity share of Rs. 10 each at a fixed price of Rs. 45 per share to mobilize Rs. 7.65 crore. Issue opens for subscription on 25.05.16 and will close on 30.05.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Having raised initial capital at par in October 2010 and February 2011, the company issued shares at a price of Rs. 50 per share in July 2011, at Rs. 200 per share in March 2012, at Rs. 20 per share in November 2012 and February 2013. Its current paid up equity capital of Rs. 2.98 crore will stand enhanced to Rs. 4.68 crore post IPO. Post allotment, shares will be listed on NSE SME (Emerge). Issue is solely managed by Corporate Strategic Allianz Ltd and Satellite Corporate Services Pvt Ltd is registrar to the issue.
On performance front, for last three fiscals the company has posted turnover and net profit of Rs. 9.65 cr. / Rs. 0.26 cr. (FY14), Rs. 31.84 cr. / Rs. 0.45 cr. (FY15) and Rs. 34.96 cr. / Rs. 0.79 cr. (FY16). If we attribute FY16 earnings on fully diluted equity post IPO then the asking price is at a P/E of 26 plus. Thus issue is aggressively priced.
On merchant banker’s front, this is the seventh IPO from its stable and it has poor track record for its past mandates.
Being aggressively priced IPO, only risks aver cash surplus investors may consider investment for long term.
Review By Dilip Davda on May 24, 2016
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of United Polyfab Gujarat Ltd. offers an early investment opportunity in United Polyfab Gujarat Ltd.. A stock market investor can buy United Polyfab Gujarat IPO shares by applying in IPO before United Polyfab Gujarat Ltd. shares get listed at the stock exchanges. An investor could invest in United Polyfab Gujarat IPO for short term listing gain or a long term.
Read the United Polyfab Gujarat IPO recommendations by the leading analyst and leading stock brokers.
United Polyfab Gujarat IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the United Polyfab Gujarat IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is United Polyfab Gujarat IPO?"
Our recommendation for United Polyfab Gujarat IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the United Polyfab Gujarat IPO.
The United Polyfab Gujarat IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit United Polyfab Gujarat IPO allotment status to check.
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