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Review By Dilip Davda on September 17, 2017
Innovative Tyres & Tubes Ltd. (ITTL) is a tyre and tube manufacturing company and marketing its products under “Innovative” brand. Its plant is located at Halol, in Gujarat. ITTL has strong business relationship with tyre major Ceat Ltd. Company is manufacturing all segments of Nylon Tyres. Products of the company are used by two/three wheelers, LCVs, Trucks, Agriculture and Off the Road segments. Company is catering to domestic markets/after sales market, OEMs and is also exporting its products.
To part finance its expansion plans for existing facilities and working capital/general corpus fund needs, ITTL is coming out with a maiden IPO of 6297000 equity share of Rs. 10 each via book building route with a price band of Rs. 42 – Rs. 45. Company hopes to raise Rs. 26.45 cr. to Rs. 28.34 cr. (based on lower and upper price bands). Issue opens for subscription on 22.09.17 and will close on 26.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Company has reserved 870000 equity shares for eligible employees. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 35% of fully diluted post issue paid up equity capital of the company. Having issued equity at par from MoA in 1995 till March 2005, it raised further equity in the price range of Rs. 31.62 to Rs. 38.42 per share between November 2006 and May 2017. Post issue, its current paid up equity capital of Rs. 11.69 crore will stand enhanced to Rs. 17.99 crore.
On performance front, ITTL has posted turnover/net profits of Rs. 126.58 cr. / Rs. 2.26 cr. (FY14), Rs. 130.52 cr. / Rs. 4.12 cr. (FY15), Rs. 125.90 cr. / Rs. 1.89 cr. (FY16) and Rs. 132.54 cr. / Rs. 4.08 cr. (FY17). Thus it has seen see-saw mode in top and bottom lines for last four fiscals. For last three fiscals, it has posted an average EPS of Rs. 3.15 and average RoNW of 8.24%. Issue is priced at a P/BV of 1.15. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 19 plus. Peers are trading at a P/E ranging 17 to 21 as shown in the prospectus. Thus issue is fully priced.
On merchant banker’s front, this is the 47th mandate from Pantomath in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Considering fully priced issue, cash surplus investors may consider long term investment.
Review By Dilip Davda on September 17, 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 Innovative Tyres & Tubes Ltd offers an early investment opportunity in Innovative Tyres & Tubes Ltd. A stock market investor can buy Innovative Tyres IPO shares by applying in IPO before Innovative Tyres & Tubes Ltd shares get listed at the stock exchanges. An investor could invest in Innovative Tyres IPO for short term listing gain or a long term.
Read the Innovative Tyres IPO recommendations by the leading analyst and leading stock brokers.
Innovative Tyres IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Innovative Tyres IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Innovative Tyres IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Innovative Tyres IPO.
The Innovative Tyres IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Innovative Tyres IPO allotment status to check.
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