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Review By Dilip Davda on November 21, 2017
Felix Industries Ltd. (FIL) is an environmental conservation company with a fundamental vision of “Recycle-Reuse-Recover-Reduce”. As the management of environmental issues are becoming increasingly important and complex in both rapidly developing and developed countries, circular economy are becoming critical issues and here FIL is playing an important role as a “value creator”. Company is providing service and technology for water and wastewater management services to municipal and industrial customers. FIL has tied up techno-alliance with GEA Engineering (a US based company) and currently has a portfolio of more than 450 proprietary technologies to tackle the challenges in managing water in all its forms.
To part finance its building and construction cost, procurement of machineries, furniture & fixtures, working capital and general corpus fund needs, FIL is coming out with a maiden IPO of 1368000 equity shares of Rs. 10 each at a fixed price of Rs. 35 per share to mobilize Rs. 4.79 crore. Issue opens for subscription on 23.11.17 and will close on 27.11.17. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Monarch Networth Capital Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.86% of the post issue paid up capital of the company. It has issued equity at par so far and has also issued bonus shares in the ratio of 7 shares for every 10 shares held in September 2016. Post issue, its current paid up equity capital of Rs. 3.72 crore will stand enhanced to Rs. 5.09 crore.
On performance front, FIL has posted turnover/net profits of Rs. 4.13 cr. / Rs. 0.05 cr. (FY14), Rs. 2.92 cr. / Rs. 0.04 cr. (FY15), Rs. 3.29 cr. / Rs. 0.11 cr. (FY16) and Rs. 5.19 cr. / Rs. 0.17 cr. (FY17). For first seven months period ended on 31.10.17 of the current fiscal, it has posted net profit of Rs. 0.23 crore on a turnover of Rs. 3.46 crore. Thus while top line has shown inconsistency, bottom line has shown northward march. First seven months performance is rather surprising. For last two fiscals, it has posted an average EPS of Rs. 2.81 and average RoNW of 14.47%. Issue is priced at a P/BV of 3.19 on the basis of NAV as on 31.10.17. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 45 against peers trading at a P/E ranging from 22 to 50. Thus issue is aggressively priced.
On merchant banker’s front, this is the 5th mandate from its stable since 2012-13 and out of last 4 listings 1 opened at par, two with a premium ranging from 4 to 5% and one at 45% premium on the day of listing.
Conclusion: Considering aggressive pricing of the issue and non-encouraging performance so far, there is no harm in giving this issue a miss. (Avoid).
Review By Dilip Davda on November 21, 2017
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 Felix Industries Limited offers an early investment opportunity in Felix Industries Limited. A stock market investor can buy Felix Industries IPO shares by applying in IPO before Felix Industries Limited shares get listed at the stock exchanges. An investor could invest in Felix Industries IPO for short term listing gain or a long term.
Read the Felix Industries IPO recommendations by the leading analyst and leading stock brokers.
Felix Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Felix Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Felix Industries IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Felix Industries IPO.
The Felix Industries IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Felix Industries IPO allotment status to check.
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