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Review By Dilip Davda on September 18, 2018
• Company has only one property under management.
• Issue is by way of offer for sale only.
• Financial data is not that appealing.
• LM has poor track record.
ABOUT COMPANY:
Mac Hotels Ltd. (MHL) is the subsidiary company of Hotel Miramar Comfort Private Limited which holds 88.27% of equity shares as on date of this Prospectus. It is primarily engaged in the business of owning, operating and managing hotels, restaurants and resorts in Goa since last 25 years. MHL’s Hotels and Resorts are tourist destinations for domestic as well as international tourists and are one of the frequented hotels in Goa. At present, it operates and manages one resort under the name 'Resort Park Avenue' in Goa which is located at Umta Wado, Near Infantaria Bakery, Baga Road, Calangute, Bardez, Goa – 403 516.
ISSUE DETAILS/CAPITAL HISTORY:
For listing benefits, MHL is coming out with a maiden IPO of 810000 equity shares of Rs. 10 each at a fixed price of Rs. 24 per share by way of offer for sale to mobilize Rs. 1.94 cr. Issue opens for subscription on 19.09.18 and will close on 25.09.18. Minimum application is to be made for 6000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Gretex Corporate Services Pvt. Ltd. (First draft prospectus for this issue was filed by Pantomath that now turned mandate from Gretex). Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 27% of the post issue paid up capital of the company. Company’s entire equity is issued/converted at par value. Average cost of acquisition of shares by the promoters is Rs. 10 per share. Being secondary issue, post issue, MHL’s current paid up equity capital will remain same at Rs. 3 cr.
FINANCIAL PERFORMANCE:
On financial performance front, for last four fiscals, MHL has posted total revenue/net profits of Rs. 1.93 cr. / Rs. 0.09 cr. (FY15), Rs. 1.88 cr. / Rs. 0.08 cr. (FY16), Rs. 3.10 cr. / Rs. 0.13 cr. (FY17) and Rs. 4.16 cr. / Rs. 0.41 cr. (FY18). For FY17 and FY18 MHL has shown improvement in top and bottom lines. For last three fiscals, it has posted an average EPS of Rs. 2.39 and an average RoNW of 13.86%. Issue is priced at a P/BV of 2.10 on the basis of its NAV of Rs. 11.43 as on 31.03.18 and at a P/BV of 1.58 on the basis of post issue NAV of Rs. 15.21. If we consider FY18 earnings then the issue is priced at a P/E of around 17.5 making it a fully priced offer.
COMPARE WITH LISTED PEERS:
As per offer documents, it has shown Fomento, Ras Resorts, Sinclair as its listed peers that are currently trading at a P/E s of around 24, 49 and 23 (as on 18.09.18).
MERCHANT BANKER’S TRACK RECORD:
On merchant banker’s front, this is 15th mandate from its stable in last three fiscals. Out of last 10 listings 1 opened at discount, 3 at par and the rest with a premium ranging from 1.32% to 8% on the day of listing.
Company has just one property under management. Issue is fully priced. Merchant Banker has poor track record. Cash surplus investors may consider investment at their own risk for long term.
Review By Dilip Davda on September 18, 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 Mac Hotels Limited offers an early investment opportunity in Mac Hotels Limited. A stock market investor can buy Mac Hotels IPO shares by applying in IPO before Mac Hotels Limited shares get listed at the stock exchanges. An investor could invest in Mac Hotels IPO for short term listing gain or a long term.
Read the Mac Hotels IPO recommendations by the leading analyst and leading stock brokers.
Mac Hotels IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Mac Hotels IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Mac Hotels 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 Mac Hotels IPO.
The Mac Hotels IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Mac Hotels IPO allotment status to check.
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