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Review By Dilip Davda on August 3, 2017
Lexus Granito (India) Ltd (LGL) is engaged in manufacturing, trading and marketing of vitrified ceramic tiles and wall tiles for domestic and international markets. LGL was outsourcing wall tiles so far, but now it has set up its own wall tiles manufacturing unit. Company is ISO 9001:2008 certified producer of quality products.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 5760000 equity shares of Rs. 10 each via book building route with a price band of Rs. 41-45 to mobilize Rs. 23.62 to Rs. 25.92 crore (based on lower and upper price band). Issue opens for subscription on 09.08.17 and will close on 11.08.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue has reservation of 30% for QIBs, 35% for HNIs and 35% for retail categories. Issue is solely lead managed by Pantomath Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Issue constitutes 30% of the fully diluted post issue paid up capital of the company. After initial equity at par for MoA, it raised further equity in a price range of Rs. 20 to Rs. 80 from March 2011 to October 2016. Post issue, its current paid up equity capital of Rs. 13.43 crore will stand enhanced to Rs. 19.19 cr.
On performance front, the company has posted turnover/net profits of Rs. 59.25 cr. / Rs. 0.32 cr. (FY14), Rs. 80.901 cr. / Rs. 2.03 cr. (FY15), Rs. 102.27 cr. / Rs. 3.20 cr. (FY16) and Rs. 164.73 cr. / Rs. 5.09 cr. (FY17). Thus it has shown continued progress in top and bottom lines. However, in FY17 its profit included Rs. 3.57 crore extraordinary item. In absence of it net profit is lower than previous year despite higher top line. LGL is exporting its products to 20 countries. Nearly two third of its revenue comes from export markets. Its last three fiscal’s average EPS is 2.89 and RoNW is 11.46% and at a P/BV of 1.78. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of about 17 (based on higher price band), against peer trading at a P/E of 77. Main board listed companies in this segment are trading at a P/E of 32 plus. But if we remove extraordinary item and attribute it on fully diluted equity then asking price is at a P/E of 56 making it fully priced.
On merchant banker’s front, this is the 42nd mandate from its stable and out of last 10 listings, one opened at par with offer price and nine gave positive opening on the listing day.
Conclusion: Considering the prospects for tiles industry amidst more spending scenario for realty sector going forward, investment in this offer may be considered for long term. (Subscribe).
Review By Dilip Davda on August 3, 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 Lexus Granito (India) Ltd offers an early investment opportunity in Lexus Granito (India) Ltd. A stock market investor can buy Lexus Granito IPO shares by applying in IPO before Lexus Granito (India) Ltd shares get listed at the stock exchanges. An investor could invest in Lexus Granito IPO for short term listing gain or a long term.
Read the Lexus Granito IPO recommendations by the leading analyst and leading stock brokers.
Lexus Granito IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Lexus Granito IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Lexus Granito IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Lexus Granito IPO.
The Lexus Granito IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Lexus Granito IPO allotment status to check.
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