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Review By Dilip Davda on April 11, 2018
Garv Industries Ltd. (GIL) is a recently incorporated company that has not completed a full financial year so far. It is a multiproduct trading and distribution company dealing in wide range of aluminium products and textile products.
To part finance its working capital and general corpus fund needs, GIL is coming out with a maiden IPO of 3200000 equity shares of Rs. 10 each at par to mobilize Rs. 3.20 crore. Issue opens for subscription on 12.04.18 and will close on 17.04.18. Minimum application is to be made for 10,000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Aryaman Financial Services Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 31.37% of the post issue paid up capital of the company. Entire current equity of the company is issued at par. Average cost of acquisition of shares by the promoters is Rs. 10. Post issue its current paid up equity capital of Rs. 7.00 crore will stand enhanced to Rs. 10.20 crore.
On performance front, for four months working ended on 31.01.18 it has earned net profit of Rs. 0.11 crore on a turnover of Rs. 14.59 crore. It has no past track record of financial data. Issue is priced at a P/BV of 1.01 on the basis of its NAV of Rs. 9.91 as on 31.01.18 and at a P/BV of 1.00 on the basis of post issue NAV of Rs. 9.93. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 161 against industry average P/E of 64 thus despite at par offer, it’s a costly bet. It has no listed peers to compare with.
On merchant banker’s front, this is the 33rd mandate from its stable in last four fiscals. Out of last 10 listings 4 opened at discount and the rest with a premium ranging from 1% to 2.5% on the day of listing. Thus it has a poor track record.
Although this is an at par offer, only cash surplus risk savvy investors may consider moderate investment for long term at their own risk.
Review By Dilip Davda on April 11, 2018
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 Garv Industries Limited offers an early investment opportunity in Garv Industries Limited. A stock market investor can buy Garv Industries IPO shares by applying in IPO before Garv Industries Limited shares get listed at the stock exchanges. An investor could invest in Garv Industries IPO for short term listing gain or a long term.
Read the Garv Industries IPO recommendations by the leading analyst and leading stock brokers.
Garv Industries IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Garv Industries IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Garv Industries 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 Garv Industries IPO.
The Garv Industries IPO allotment status will be available on or around April 20, 2018. The allotted shares will be credited in demat account by April 24, 2018. Visit Garv Industries IPO allotment status to check.
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