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Review By Dilip Davda on January 9, 2015
On one hand, we witnessed withdrawal of main board IPO of NCML Ind that got just 45% response till second last day of extended period with lower price band and on the other, NCD offer from IFCI getting just 14% response in first full week of subscription indicating diminishing preference for IPO post debacle of Monte Carlo IPO post listing. Yet, we continue to witness entry of SME IPOs. Details of the same are as under:
Raghuvansh Agrofarms Ltd (RAL): The Company claims to be a unique initiative in the agri-dairy products line. By the way of promoting involvement and participation of people, it strives to take the mainstay of Indian economy, agriculture and allied sectors, to the hands that nurture it. RAL owns cultivable lands and cattle stock, have consultancy liaisons with researchers, and possess vast experience in Indian business environment. The company offer financial, technical, strategic assistance in the agricultural and dairy business areas to establish profitable enterprises. With innovative initiatives like Microfinance and Kisan Helpline, it is helping many others realize the potential.
Now to part finance its investment in subsidiary companies and construct Bio-Gas plant for power generation, the company is coming out with a maiden IPO of 3600000 equity share of Rs. 10 each at a fixed price of Rs. 11 per share to mobilize Rs. 3.96 crore. Post this IPO its current equity of Rs. 8.32 will rise to Rs. 11.92 crore. Issue is lead managed by Sobhagya Capital Options Ltd and Skyline Finance Services Pvt Ltd is the registrar to the issue. Issue opened for subscription on 09.01.15 and will close on 13.01.15. Post allotment, it will be listed on BSE SME. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. The company issued equity at a price of Rs. 100 to Rs. 500 during 2007 - 2011 and issued bonus shares in the ratio of 3 for 1 in 2013. Thereafter it again raised equity from promoters at a price of Rs. 20 per share that has helped it to get NAV of Rs. 20 plus.
On performance front, the company has posted and average EPS of Rs. 0.37 for past three fiscals. For H1 of current fiscal it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 0.67 crore translating into an annualized EPS of Rs. 0.01 on existing equity that will slide further on enhanced equity post issue and thus at asking price of the issue it will be above 110 P/E. Lead manager has poor track record for its past mandates.
Remark: Considering the entry barrier and poor preference from broking community, this high P/E IPO is not worth.
Review By Dilip Davda on January 9, 2015
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 Raghuvansh Agrofarms Ltd offers an early investment opportunity in Raghuvansh Agrofarms Ltd. A stock market investor can buy Raghuvansh Agrofarms IPO shares by applying in IPO before Raghuvansh Agrofarms Ltd shares get listed at the stock exchanges. An investor could invest in Raghuvansh Agrofarms IPO for short term listing gain or a long term.
Read the Raghuvansh Agrofarms IPO recommendations by the leading analyst and leading stock brokers.
Raghuvansh Agrofarms IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Raghuvansh Agrofarms IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Raghuvansh Agrofarms IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Raghuvansh Agrofarms IPO.
The Raghuvansh Agrofarms IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Raghuvansh Agrofarms IPO allotment status to check.
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