Funny Software IPO Review & Recommendations

Funny Software IPO Review by Dilip Davda (May apply)

[Dilip Davda]  

On performance front, the company that started its operations in mid 2012-13 earned net profit of Rs. 0.003 crore on a turnover of Rs. 0.85 crore. For fiscal 2013-14 it has marked net profit of Rs. 0.04 crore on a turnover of Rs. 3.38 crore and for first nine months ended 31.12.14 it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 2.76 crore. If we annualized these earnings, then EPS for fiscal would be around Rs.0.06. And post issue its equity of Rs. 9.07 crore will jump to Rs. 12.35 crore that will translate it in to an EPS of Rs. 0.04 indicating for its issue price at a P/E of 350. This issue is highly priced one. Merchant banker has poor track record.

We have witnessed erratic movements of SME IPOs post listings despite market making that might have helped in listing gains, but later on regular trading remains a far cry. Due to this and the entry barriers, broking community at large discourages investments in SME IPOs.

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. As SME issues have entry barriers and low preference from broking community, any reader taking decisions based on any information published here does so entirely at own risk. Author has no plans to invest in this offer.

(Email: dilip_davda@rediffmail.com)