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Review By Dilip Davda on September 28, 2016
Sakar Healthcare Ltd (SHL) is an Indian pharmaceutical company engaged in the manufacturing and marketing of its pharmaceutical formulations for domestic and international markets. Domestic sale of the company is a deemed exports as third party exports it. The company also undertakes contract manufacturing for Indian and MNC companies in India. SHL’s pharmaceutical formulations relates to analgesics, antielminthics, anti coagulants, anti malarial, anti spasmodic, antianemics, antibiotics, anti-emetics, anti-histamines, bronchodilators, corticosteroids, cough and cold preparations, multi vitamins etc. As of 31.03.16 it had 35 distributors in various markets.
To part finance setting up of new Lyophilization facility to manufacture Lyophilized products, obtaining registration of Europe Union GMP, registering new products, working capital needs and other general corpus funds, the company is coming out with a maiden IPO of 2961000 equity shares of Rs. 10 each via book building route with a price band of Rs. 42-50 to mobilize Rs. 12.44 to 14.81 crore. Issue opens for subscription on 30.09.16 and will close on 05.10.16. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Issue is solely managed by Pantomath Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on NSE SME Emerge platform. So far entire equity issued at par by the company. Post IPO its current paid up equity capital of Rs. 8 crore will stand enhanced to Rs. 10.96 crore.
On performance front, for last four fiscals, the company has reported turnover / net profits of Rs. 21.97 cr. / Rs. 1.45 cr. (FY 13), Rs. 29.71 cr. / Rs. 1.75 cr. (FY 14), Rs. 35.05 cr. / Rs. 1.84 cr. (FY 15) and Rs. 41.43 cr. / Rs. 2.33 cr. (FY16). If we attribute the latest earnings on fully diluted equity post IPO then asking price is at a P/E of 19 to 23 (based on lower and upper price bands) and at a P/BV of 2 plus. Some of its peers are trading at a P/E of 13 to 40. Thus issue appears to have been priced on the higher side.
On merchant banker’s front, this is 27th Mandate from its stable and past mandates have shown mixed trends.
Conclusion: Considering hire pricing, only cash surplus risk savvy investors may consider it for long term, others may ignore.
Review By Dilip Davda on September 28, 2016
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 Sakar Healthcare Limited offers an early investment opportunity in Sakar Healthcare Limited. A stock market investor can buy Sakar Healthcare NSE SME IPO shares by applying in IPO before Sakar Healthcare Limited shares get listed at the stock exchanges. An investor could invest in Sakar Healthcare NSE SME IPO for short term listing gain or a long term.
Read the Sakar Healthcare NSE SME IPO recommendations by the leading analyst and leading stock brokers.
Sakar Healthcare NSE SME IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Sakar Healthcare NSE SME IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Sakar Healthcare NSE SME IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Sakar Healthcare NSE SME IPO.
The Sakar Healthcare NSE SME IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Sakar Healthcare NSE SME IPO allotment status to check.
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