Review By on April 20, 2017
Zota Health Care Ltd (ZHCL) started its operations in 2000 by marketing pharmaceutical products that include allopathic as well as ayurvedic medicines. The product is marketed in the form of tablets, capsules, ointment, oral liquids, injectable etc as per customers’ need. Currently the company is a pharmaceutical company engaged in developing, manufacturing and marketing pharmaceutical products. It applied for patent of 19 unique formulations out of which it already got patent for 6 products and the rest are waiting approvals. ZHCL has also taken initiatives for digital marketing strategy with a mobile application for its division “nutravedic.com” and is in the process of launching another application for easy reach to the end users. ZHCL has also set up a unit at Special Economic Zone Surat, to meet export demands for its products. Company has applied for registration in 15 countries for more than 230 products and has received 46 approvals from 10 countries.
To meet its repayment of debt plans, working capital requirement and general corpus fund needs, the company is coming out with a maiden IPO via book building route. It is offering 4680000 equity share of Rs. 10 each with a price band of Rs. 121 – Rs. 125 to mobilize Rs. 56.63 crore to Rs.58.50 crore based on lower and higher price bands. Issue consists of fresh equity issue of 3180000 shares and rest by way of offer for sale. Issue opens for subscription on 27.04.17 and will close on 02.05.17. Minimum application is to be made for 1000 shares and in multiples thereof, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is jointly lead managed by Pantomath Capital Advisors Pvt Ltd and Indian Overseas Bank. Satellite Corporate Services Pvt Ltd is the registrar to the issue. From incorporation till 2007 it issued all equity at par and raised further equity at a price of Rs. 100 per share during 2008 - 2011. It has also issued bonus shares in the ratio of 138 for 10 (in July 2008 ) 1 for 1 (in Sept 2009) 1 for 2 (in Sept 2010) 1 for 2 (in Sept 2011) 1 for 5 (in Oct 2012) and 1 for 5 (in Oct 2014). Post issue, company’s current paid up equity capital of Rs. 14.36 crore will stand enhanced to Rs. 17.54 crore.
On performance front, the company has posted turnover/net profits of Rs. 43.94 cr. / Rs. 2.55 cr. (FY13), Rs. 50.21 cr. / Rs. 3.13 cr. (FY14), Rs. 56.48 cr. / Rs. 4.26 cr. (FY15) and Rs. 64.84 cr. / Rs. 5.19 cr. (FY16). For nine months of the current fiscal ended on 31.12.16 it has reported net profit of Rs. 3.94 crore on a turnover of Rs. 56.26 crore. If we annualize latest earnings and attribute it on the post issue capital then asking price is at a P/E of around 40 plus and at a P/BV of 6 plus. Its peers are trading at a P/E of 20 to 75. Considering the P/E and P/BV, offer appears to be fully priced.
On BRLM’s front, this is the 43rd mandate from Pantomath and last 10 issues have shown positive listings. From Indian Overseas Bank this is the 4th mandate and the past three issues have given positive returns on listing day.
Conclusion: Considering fully priced offer, cash surplus investors may consider this offer for long term investment.
Review By on April 20, 2017
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 Zota Health Care Ltd. offers an early investment opportunity in Zota Health Care Ltd.. A stock market investor can buy Zota Health Care IPO shares by applying in IPO before Zota Health Care Ltd. shares get listed at the stock exchanges. An investor could invest in Zota Health Care IPO for short term listing gain or a long term.
Read the Zota Health Care IPO recommendations by the leading analyst and leading stock brokers.
Zota Health Care IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Zota Health Care IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Zota Health Care IPO?"
Our recommendation for Zota Health Care IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Zota Health Care IPO.
The Zota Health Care IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Zota Health Care IPO allotment status to check.
