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Review By Dilip Davda on June 28, 2017
Shrenik Ltd is (SL) primarily engaged in the business of trading of different types of papers in Gujarat and Rajasthan through distribution channel. The company serves customers with variety of papers like copier, maplitho, coated paper, FBB Board and a speciality paper commodity royal executive bond. Besides being a wholesaler is has also introduces its own brand “Shrenik” covering copier, sticker sheet etc. It’s customer base in Gujarat and Rajasthan is around 3000 plus. It is also a wholesaler for Tamil Nadu Newsprint and Papers Ltd in Gujarat and for Asia Pulp in Gujarat and Rajasthan.
To part finance its working capital and general corpus fund needs, the company is coming out with a maiden IPO of 5400000 equity share of Rs. 10 each at a fixed price of Rs. 40 per share to mobilize Rs. 21.60 crore. Issue opens for subscription on 06.07.2017 and will close on 10.07.2017. Minimum application is to be made for 3000 shares and in multiples thereof, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue is lead managed by Pantomath Capital Advisors Pvt Ltd and Link Intime India Pvt Ltd is the registrar to the issue. After initial equity for MoA issue at par, it raised further equity at a price of Rs. 14 per share. Post issue, its current paid up equity capital of Rs. 15.00 crore will stand enhanced to Rs. 20.40 crore.
On performance front, the company has posted turnover/net profits of Rs.213.28 cr. / Rs. 0.96 cr. (FY14), Rs. 265.86 cr. / Rs. 1.03 cr. (FY15), Rs. 329.47 cr. / Rs. 2.94 cr. (FY16) and Rs. 428.09 cr. / Rs. 4.19 cr. (FY17). Last three year’s average EPS on the current paid up equity is around Rs. 2.90. If we attribute latest earnings on fully diluted equity post issue then asking price is at a P/E of 19 plus and at a P/BV of 2.16. Last three year’s average RoNW is 13.80%. As per IPO documents, the company has no listed peer to compare with. Thus issue appears to be fully priced.
On merchant banker’s front, this is the 40th mandate from its stable in last three fiscals, and out of latest 10 listings nine gave positive rewards on offer price while one opened at par to offer value on the listing date.
Conclusion: Investors may consider moderate investment in this fully priced issue for short to long term.
Review By Dilip Davda on June 28, 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 Shrenik Limited offers an early investment opportunity in Shrenik Limited. A stock market investor can buy Shrenik IPO shares by applying in IPO before Shrenik Limited shares get listed at the stock exchanges. An investor could invest in Shrenik IPO for short term listing gain or a long term.
Read the Shrenik IPO recommendations by the leading analyst and leading stock brokers.
Shrenik IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Shrenik IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Shrenik IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Shrenik IPO.
The Shrenik IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Shrenik IPO allotment status to check.
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