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Review By Dilip Davda on March 13, 2018
Ridings Consulting Engineers India Ltd. (RCEI) is engaged in Geospatial Services which includes Sub Surface Utility Engineering (SUE) Survey/ Ground-penetrating radar (GPR) Survey, Geographic Information Systems and Geospatial database development (GIS & Mapping Solution), Geospatial -Marketing consulting and planning, Training (GIS/ AutoCAD/ Arc Suite/ GPR/ EPL & DGPS/Total Station), Geographic Information Systems for Utilities (Power, Water & Telecom) and Land surveying and Geospatial Data (Digital & large Scale Geospatial Data) etc. The company also provide services in the field such as GPR (Ground Penetrating Radar) / Sue Survey, Navigation Survey, Property Tax Surveys, Land Usage Surveys, Investigative Surveys (gather competition, market penetration data), Socio Economic Surveys, Geospatial Application Development and Services which directly provide services to various private sector, Semi Government & Government entities in field of telecom, oil and gas, public utilities etc. in India, Bahrain and other gulf countries.
Company is an ISO 9001:2015 certified company for providing training and services in the field of Topographical Ground Survey, Cartography, Digitization, Data Base, Software Development/Customization, GIS, Development, all type of Engineering, Survey/design and Remote sensing and Digital Photogrammetry Applications. Ridings consist of team which provides professional services that are customized to make our principals' businesses a success in India as well as out of India.
To part finance Working capital and general corpus fund needs, RCEI is coming out with a maiden IPO of 3640000 equity shares of Rs. 10 each at a fixed price of Rs. 18 per share to mobilize Rs. 6.55 crore. Issue opens for subscription on 14.03.18 and will close on 16.03.18. Minimum application is to be made for 8000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE SME. Issue is solely lead managed by Swastika Investmart Ltd. and Skyline Financial Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 29.26% of the post issue paid up capital of the company. Average cost of acquisition of shares by the promoters is Rs.0.07 and Rs. 2.52 per share. Company’s entire equity is issued at par. It has also announced bonus in the ratio of 17 shares for every 5 shares held in November 2017. Post issue, its current paid up equity capital of Rs. 8.80 crore will stand enhanced to Rs. 12.44 crore.
On performance front, RCEI has posted turnover/net profits of Rs. 13.52 cr. / Rs. 1.17 cr. (FY14), Rs. 13.57 cr. / Rs. 1.07 cr. (FY15), Rs. 14.27 cr. / Rs. 0.52 cr. (FY16) and Rs. 16.90 cr. / Rs. 1.02 cr. (FY17). For first half of current fiscal, it has earned net profit of Rs. 0.45 cr. on a turnover of Rs. 6.23 cr. For last three fiscals it has posted an average EPS of Rs. 1.00 and an average RoNW of 10.45%. Issue is priced at a P/BV of 1.79 based on its NAV of Rs. 10.06 as on 31.03.17 and at a P/BV of 1.37 on its post issue NAV of Rs. 13.10. If we annualize latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 25. As per offer document, Genesys Intl and Rolta India are its listed peers that are trading at a P/E of around 27 and – (69) respectively as on 13.03.18. Thus issue appears aggressively priced.
On merchant banker’s front, this is the 12th mandate from its stable and out of last 10 listings 1 opened below the offer price and the rest with premium ranging from 4.5% to 20% on the day of listing.
Considering inconsistent track record and aggressive pricing of the issue, cash surplus risk savvy investors may consider investment for long term.
Review By Dilip Davda on March 13, 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 Ridings Consulting Engineers India Ltd offers an early investment opportunity in Ridings Consulting Engineers India Ltd. A stock market investor can buy Ridings Consulting Engineers IPO shares by applying in IPO before Ridings Consulting Engineers India Ltd shares get listed at the stock exchanges. An investor could invest in Ridings Consulting Engineers IPO for short term listing gain or a long term.
Read the Ridings Consulting Engineers IPO recommendations by the leading analyst and leading stock brokers.
Ridings Consulting Engineers IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Ridings Consulting Engineers IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Ridings Consulting Engineers 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 Ridings Consulting Engineers IPO.
The Ridings Consulting Engineers IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Ridings Consulting Engineers IPO allotment status to check.
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