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Review By Dilip Davda on March 1, 2018
Inflame Appliances Ltd. (IAL) is engaged in manufacturing of LPG Gas Stove/cooktops and Sheet Metal Components and is an IS 4246:2002 certified company. Its product range includes Gas Stove in Sheet Metal, Gas Stove with Toughed Glass (Optional Auto Ignition) with range of 4 Burners/ 3 Burners/ 2 Burners and Sheet Metal Components for captive consumption. It has marketing arrangements with Indian Oil Corporation of India, HPCL and BPCL. IAL’s products are sold under brand names like “Hindware” and “Avaante”. Company is also part of Prime Minister Ujjwala Yojna (PMUY) for providing 5 crore new gas connections to the people below poverty line in the country and is gearing to supply 3 crore new connections under “Ujjwala Plus” plan.
To part finance its capital expenditure, working capital and general corpus fund needs, IAL is coming out with a maiden IPO of 1200000 equity shares of Rs. 10 each at a fixed price of Rs. 54 per share to mobilize Rs. 6.48 crore. Issue opens for subscription on 06.03.18 and will close on 08.03.18. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Swastika Investmart Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 30% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity at a price of Rs. 55 per share and has also issued bonus shares in the ratio of 3 for 5 in January 2018. Post issue, its current paid up capital of Rs. 2.80 crore will stand enhanced to Rs. 4.00 crore. Average cost of acquisition of shares by the promoters is Rs. 6.25, Rs. 8.24 and Rs. 11.40 per share.
On the performance front, IAL has posted turnover/net profits of Rs. 3.92 cr. / Rs. 0.06 cr. (FY16) and Rs. 18.06 cr. / Rs.0.46 cr. (FY17). For the period ended on 20th January 2018 it has earned net profit of Rs. 0.80 cr. on a turnover of Rs. 25.42 cr. For last three fiscals, it has posted an average EPS of Rs. 1.06 and an average RoNW of 20.02% on an equity base of Rs. 0.80 crore. Issue is priced at a P/BV of 3.97 based on its NAV of Rs. 13.59 as on 20.01.18 and at a P/BV of 2.23 on the basis of its post issue NAV of Rs. 24.17. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 22, against its listed peers like IFB Industries and TTK Prestige trading at a P/E of 89 and 29 respectively as on 01.03.18. Thus issue appears fully priced.
On merchant banker’s front, this is the 12th mandate from its stable in last three years. Out of last 10 listings, 1 opened at discount to offer price and the rest with a premium ranging from 5% to 20% on the day of listing.
Considering company’s tie up for “Ujjwala” scheme, investment may be considered for long term in this fully priced offer.
Review By Dilip Davda on March 1, 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 Inflame Appliances Ltd offers an early investment opportunity in Inflame Appliances Ltd. A stock market investor can buy Inflame Appliances IPO shares by applying in IPO before Inflame Appliances Ltd shares get listed at the stock exchanges. An investor could invest in Inflame Appliances IPO for short term listing gain or a long term.
Read the Inflame Appliances IPO recommendations by the leading analyst and leading stock brokers.
Inflame Appliances IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Inflame Appliances IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Inflame Appliances 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 Inflame Appliances IPO.
The Inflame Appliances IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Inflame Appliances IPO allotment status to check.
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