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Review By Dilip Davda on February 13, 2017
Nitiraj Engineers Ltd (NEL) is engaged in the manufacture and sale of wide range of Electronic Weighing Scales and Systems, Currency Counting Machines and Electronic Fare Meters. Company’s product portfolio range caters to both industrial and domestic consumption. NEL markets its products under the brand “Phoenix” through large network of dealers to customers in India as well as abroad. It produces more than 1,00,000 Scales per year and have more than one million customers.
To part finance development of new products, setting up of manufacturing units for existing and new products, expansion of marketing network and brand building and raise corpus fund, the company is coming out with a maiden IPO of 2200800 equity share of Rs. 10 each at a fixed price of Rs. 100 per share to mobilize Rs. 22.01 crore. Issue opens for subscription on 20.02.17 and will close on 01.03.17. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge platform. After initial capital at par, it issued bonus shares in the ratio of 5 for 1 in September 2015. Post issue, its current paid up equity capital of Rs. 6 crore will stand enhanced to Rs. 8.20 crore. Issue is solely lead managed by Arihant Capital Markets Ltd and Bigshare Services Pvt Ltd is the registrar to the issue.
On performance front, the company has posted turnover/net profit of Rs. 41.17 cr. / Rs. 3.89 cr. (FY14), Rs. 43.87 cr. / Rs. 4.18 cr. (FY15) and Rs. 56.54 cr. / Rs. 5.50 cr. (FY16). For first half ended on 30.09.16 it has posted net profit of Rs. 4.51 crore on a turnover of Rs. 32.01 crore. If we annualize these earnings and attribute on the fully diluted equity post IPO then asking price is at a P/E of 9 plus and at a P/BV of 1.6. The company has no listed peers to compare with.
On merchant banker’s front, this is the first SME mandate from its stable and has no track records for past issues in last three years.
Conclusion: Issue pricing appears to be reasonable. Cash surplus investors may consider investment for medium to long term.
Review By Dilip Davda on February 13, 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 Nitiraj Engineers Ltd offers an early investment opportunity in Nitiraj Engineers Ltd. A stock market investor can buy Nitiraj Engineers IPO shares by applying in IPO before Nitiraj Engineers Ltd shares get listed at the stock exchanges. An investor could invest in Nitiraj Engineers IPO for short term listing gain or a long term.
Read the Nitiraj Engineers IPO recommendations by the leading analyst and leading stock brokers.
Nitiraj Engineers IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Nitiraj Engineers IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Nitiraj Engineers IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Nitiraj Engineers IPO.
The Nitiraj Engineers IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Nitiraj Engineers IPO allotment status to check.
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