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Review By Dilip Davda on September 13, 2016
AVSL Industries Ltd (AVSL) is a Delhi based manufacturing and trading organization having its manufacturing plant of producing raw material for Power Cable at Narela, Delhi and Halol, Gujarat and also has office at Netaji Subhash Place, Delhi for trading. AVSL commenced its operations of manufacturing of PVC products in the year 2009 from its Narela, Delhi plant. In both plants it is manufacturing PVC Compound, HDPE/LDPE Compound, PVC Filler, and HDPE/LDPE Tape etc. These products are raw material for HT/ LT Power Cables, Telecom Cables and PVC Pipes and Fittings. Apart from this, it has also started Export and Import of Agro based commodities such as Rice, Wheat Flour, Pulses, Spices, Food Grains and Dry Fruits in the year 2015.
To part finance its working capital requirements and general corpus fund needs, the company is coming out with a maiden IPO of 1440000 equity share of Rs. 10 each at a fixed price of Rs. 36 per share to mobilize Rs.5.18 crore. Issue opens for subscription on 15.09.16 and will close on 28.09.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSESME Emerge platform. After incorporation equity at par, it issued further equity at a price ranging from Rs. 36 per share to Rs. 1500 per share during 2005 to 2016. It has also issued bonus n the ratio of 9 equity shares against 1 equity share held. Post issue its current paid up equity capital of Rs. 3.89 crore will stand enhanced to Rs.5.33 crore.
On performance front, it has posted an average EPS of Rs. 0.35 for last three fiscals. Its turnover/net profits were Rs. 18.99 cr./ Rs. 0.06 cr. (FY13), Rs.13.43 cr. / Rs. 0.07 cr. (FY14) and Rs. 14.22 cr / Rs. 0.03 cr. (FY15). For FY 16 it has earned net profit of Rs. 0.20 crore on a turnover of Rs. 68.60 crore and this sudden jump is really surprising. If we attribute the latest earnings on fully diluted equity post IPO then asking price is at a P/E of 94 plus and at a P/BV of 2.29 making it a pricy bet.
On merchant banker’s front, this is the 21st IPO from its stable and earlier mandates have shown mixed trends post listing.
Considering exorbitant pricing, one may give it a miss.
Review By Dilip Davda on September 13, 2016
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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of AVSL Industries Limited offers an early investment opportunity in AVSL Industries Limited. A stock market investor can buy AVSL Industries IPO shares by applying in IPO before AVSL Industries Limited shares get listed at the stock exchanges. An investor could invest in AVSL Industries IPO for short term listing gain or a long term.
Read the AVSL Industries IPO recommendations by the leading analyst and leading stock brokers.
AVSL Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the AVSL Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for AVSL Industries IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the AVSL Industries IPO.
The AVSL Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit AVSL Industries IPO allotment status to check.
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