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Review By Dilip Davda on March 13, 2016
Bharat Wire Ropes Ltd (BWR) is a wire rope and wires manufacturing company. Products of the company i.e. wire ropes, structural strands, slings and wires finds its application in general engineering, fishing, elevators, cranes, material handling, power transmission, suspension bridges, onshore / offshore oil exploration, ports and shipping, mining, defence, railways etc. BWR is also engaged in the business of trading of the steel related products.
BWR’s existing steel wire ropes manufacturing facility with an installed capacity of 12,000 MTPA is located at Atgaon, and a Pyrolysis plant with an installed capacity of 1,260 MTPA at Chalisgaon, Maharashtra for production of oil, which is used as fuel in its current manufacturing process. The company is now planning enhancement in the manufacturing capacities by setting up a fully integrated manufacturing facility with an installed capacity of 66,000 MTPA at Chalisgaon, Maharashtra.
To part finance this proposed plans and meet general corpus fund needs, the company is coming out with a maiden IPO of about 1.55 cr. or 1.70 cr. (based on lower and upper price band) equity shares of Rs. 10 each via book building route in a price band of Rs. 40-45. Issue opens for subscription on 18.03.16 and will close on 22.03.16. Minimum application is to be made for 300 shares and in multiples thereon, thereafter. BRLMs to this issue are Intensive Fiscal Services Pvt Ltd and BOB Capital Markets Ltd. Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment shares will be listed on BSE and NSE.
On performance front, company has posted an average EPs of Rs. 0.59 for last three fiscals. Turnover and net profits were Rs. 77 cr. / Rs. 1.77 cr. (FY11), Rs. 77 cr. / Rs. 2.14 cr. (FY12), Rs. 74.40 cr. / Rs. 1.48 cr. (FY13), Rs. 82.29 cr. / Rs. 1.50 cr. (FY14) and Rs. 76.72 cr. / Rs. 1.98 cr. (FY 15). For first eight months of the current fiscal ended on 30.11.15 it has reported net profit of Rs. 1.09 cr. on a turnover of Rs. 43.74 cr. After initial equity at par on incorporation, it has issued during 2002-2012 equity in the price range of Rs. 20 to Rs. 60 per share. Post IPO its current paid up equity capital of Rs. 29.40 crore will stand enhanced to approx. Rs. 45 crore. There has been inconsistency in top and bottom lines. If we annualize these earnings and attribute on fully diluted equity post IPO then the EPS stands around Rs. 0.36 and thus asking price is at a P/E of 111 plus which is exorbitant. As per RHP company has no listed peer to compare with.
On Merchant bankers front both have no mandates for past four years as their track records.
Considering aggressive pricing and inconsistency in performance, investors may give this IPO a miss.
Review By Dilip Davda on March 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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. 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 Bharat Wire Ropes Ltd offers an early investment opportunity in Bharat Wire Ropes Ltd. A stock market investor can buy Bharat Wire Ropes IPO shares by applying in IPO before Bharat Wire Ropes Ltd shares get listed at the stock exchanges. An investor could invest in Bharat Wire Ropes IPO for short term listing gain or a long term.
Read the Bharat Wire Ropes IPO recommendations by the leading analyst and leading stock brokers.
Bharat Wire Ropes IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Bharat Wire Ropes IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Bharat Wire Ropes IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Bharat Wire Ropes IPO.
The Bharat Wire Ropes IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Bharat Wire Ropes IPO allotment status to check.
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