Review By on August 18, 2015
Universal Autofoundry Ltd (UAL) is engaged in the manufacturing of Iron Castings. It manufactures castings components in Grey Iron and S.G. (Ductile) Iron, primarily for automotive sector. Castings are supplied in Machined, Semi Machined and as cast condition with surface treatment as per customer’s need. Suspension Brackets, Differential housing, Hubs, Brake drum, Flywheels, Adjuster Nuts, Pulleys, Dampers, etc. are some of the items that find application in the commercial vehicle and engineering industry.
UAL has more than 65,000 sq. ft. size area manufacturing plant located at VKI Area, Jaipur, Rajasthan, which has an existing installed capacity of 7,800 MT p.a. for the manufacture of grey iron and ductile iron castings. It caters to the requirements of many of the major automotive and engineering goods manufacturers in India namely Ashok Leyland Limited, V E Commercial Vehicles Limited, Escorts Limited, TAFE, JCB India Ltd. etc.
To part finance its expansion of manufacturing facilities and meeting general corpus funds requirements, the company is coming out with a maiden IPO of 2160000 equity share of Rs. 10 each at a fixed price of Rs. 15 per share (including Rs. 5 premium per share) to mobilize Rs. 3.24 crore. The issue opens for subscription on 19.08.15 and will close on 21.08.15. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. After MoA equity on inception till 2012, it issued shares at par and then on 03.07.15 it issued bonus shares in the ratio of 5 shares for every 2 shares held that brought its paid up equity to Rs. 5.95 crore that will rise to Rs. 8.11 crore post IPO. Sole lead manager of this IPO is Hem Securities Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.
On performance front, it has posted an average EPS of Rs. 2.74 for last three fiscals (based on pre-bonus equity of Rs. 1.70 crore). For the year ended 31.03.15 it has earned net profit of Rs. 1.91 crore on a turnover of Rs. 57.23 crore. If we attribute these earnings on fully diluted equity of Rs. 8.11 crore post IPO, then asking price is at a P/E of around 6 against industry composite of 28 P/E that augurs well.
This is the 14th IPO from the lead manager and it has mixed trends for its past 13 offers post listing.
Long term investors may consider moderate investments.
Review By on August 18, 2015
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 Universal Autofoundry Ltd. offers an early investment opportunity in Universal Autofoundry Ltd.. A stock market investor can buy Universal Autofoundry IPO shares by applying in IPO before Universal Autofoundry Ltd. shares get listed at the stock exchanges. An investor could invest in Universal Autofoundry IPO for short term listing gain or a long term.
Read the Universal Autofoundry IPO recommendations by the leading analyst and leading stock brokers.
Universal Autofoundry IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Universal Autofoundry IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Universal Autofoundry IPO?"
Our recommendation for Universal Autofoundry IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Universal Autofoundry IPO.
The Universal Autofoundry IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Universal Autofoundry IPO allotment status to check.
