Review By on July 25, 2014
Vishal Fabrics Ltd: Vishal Fabrics Limited (VFL) is a flagship Company of Chiripal Group, Ahmedabad and is recognized as a leading process house with a capacity to produce 100 million meter processed fabric per annum. The Company is engaged in the business of dyeing, printing and processing of fabrics of its own and also on job work basis. The Company procures mainly Grey Fabric and dyes, prints and finishes the same as per the client’s requirements. The processing unit of the Company is based in Narol, Ahmedabad, Gujarat. The plant has the capacity to print, dye and process wide range of fabrics i.e. cotton, polyester, viscose and man-made & blended fabrics suitable for men’s wear, women’s wear, home furnishing and many other applications.
To meet its long term funding requirement the company is coming out with a maiden IPO of 3474000 equity share of Rs. 10 each at a fixed price of Rs. 45 per share to mobilize Rs. 15.63 crore. The issue opens for subscription on 31.07.14 and will close on 05.08.2014. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Issue is lead managed by Aryaman Financial Services Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE SME.
On performance front, VFL has posted an average EPS of Rs. 1.92 for last three fiscals ended 31.3.13. For first nine months ended 31.12.13 it has earned net profit of Rs. 2.12 crore on a turnover of Rs. 136.59 crore. If we attribute this earnings on expanded equity of Rs. 13.17 crore, then the asking price is at a P/E of around 21 against peers quoting below 5 P/E. Company’s equity shares was having face value of Rs. 100 till January 2014 and it made preferential issue of 2100 shares at a price of Rs. 300 per share in September 1998, 40000 shares at a price of Rs. 700 in May 2003, 10000 shares at a price of Rs. 2000 per share in March 2005, 5000 shares at a price of Rs. 2100 in November 2007 and then issued two bonus in the ratio of 3 for 1 in January 2014 and 1 for 1 in March 2014. In March 2014 it issued 500000 shares at a price of Rs. 45 to promoters to pave the way for pricing of this IPO, which is very aggressive.
Lead manager has poor track record.
Remark: Avoid this pricy issue that also has entry barriers.
Review By on July 25, 2014
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 Vishal Fabrics Ltd. offers an early investment opportunity in Vishal Fabrics Ltd.. A stock market investor can buy Vishal Fabrics IPO shares by applying in IPO before Vishal Fabrics Ltd. shares get listed at the stock exchanges. An investor could invest in Vishal Fabrics IPO for short term listing gain or a long term.
Read the Vishal Fabrics IPO recommendations by the leading analyst and leading stock brokers.
Vishal Fabrics IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Vishal Fabrics IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Vishal Fabrics IPO?"
Our recommendation for Vishal Fabrics IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Vishal Fabrics IPO.
The Vishal Fabrics IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Vishal Fabrics IPO allotment status to check.
