Review By on September 28, 2016
Valiant Organics Ltd (VOL) is a chemical manufacturing company with focus on manufacturing and marketing of different types of chlorophenol which is a chemical which has several applications mainly into agro-chemical industry, pharmaceutical industry, dyes industry, manufacturing of cosmetics and veterinary drugs. The company operates a single location manufacturing facility at Sarigam Industrial Estate having an installed capacity of 4,800 mtpa. Over the years it has built goodwill amongst customers and export markets and it believes the demand for its products are more than supply capacity, hence, it has started the process of applying with the government agencies to augment production capacities upto 21,600 metric tonnes over the next few years in a phased manner.
For listing gains the company is coming out with a maiden IPO of 964800 equity shares of Rs. 10 each at a fixed price of Rs. 220.00 per share as offer for sale to mobilize Rs.21.23 crore. Issue opens for subscription on 29.09.16 and will close on 04.10.16. Minimum application is to be made for 600 shares and in multiples thereon, thereafter. Issue is solely managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME. It has issued shares at par for the MoA and soon thereafter at a price of Rs. 250 per share. It also bought back its shares from December 2007 to April 2012 in the price range of Rs. 250 to Rs. 440 per share. It has also issued bonus shares in the ratio of 1 for 5 in November 2007, 1 for 10 in November 2008, 2 for 5 in January 2010, 1 for 10 in January 2011 and 9 for 1 in August 2015. Being offer for sale, its equity stands at Rs. 3.64 cr. post IPO.
Company’s revenue from operations has increased at a CAGR of 12.37% from Rs. 33.19 cr. in F.Y. 2012 to Rs. 53.48 cr. in F.Y. 2016. Its earnings before interest, depreciation and tax has increased at a CAGR of 24.33% from Rs. 7.18 cr. in F.Y. 2012 to Rs. 17.16 cr. in F.Y. 2016, and profit after tax has increased at a CAGR of 27.36% from Rs. 3.92 cr. in F.Y. 2012 to Rs. 10.31 cr. in F.Y. 2016. It has delivered average Return on Net worth of 32.17% over the last five years. Its top line has seen set back in FY16. Based on last earnings, the issue is being made at a P/E of 7 plus against industry composite of 29 plus and thus is reasonably priced.
On merchant banker’s front, this is the 11th mandate in last three years and past mandates have shown average performance on listing day.
Conclusion: Long term investors may consider investment in this justifiably priced IPO.
Review By on September 28, 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 Valiant Organics Ltd. offers an early investment opportunity in Valiant Organics Ltd.. A stock market investor can buy Valiant Organics IPO shares by applying in IPO before Valiant Organics Ltd. shares get listed at the stock exchanges. An investor could invest in Valiant Organics IPO for short term listing gain or a long term.
Read the Valiant Organics IPO recommendations by the leading analyst and leading stock brokers.
Valiant Organics IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Valiant Organics IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Valiant Organics IPO?"
Our recommendation for Valiant Organics IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Valiant Organics IPO.
The Valiant Organics IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Valiant Organics IPO allotment status to check.
