Review By 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 on May 24, 2016
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 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.
