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Review By Dilip Davda on December 16, 2015
Suncare Traders Ltd (SCTL) is in the business of trading into laminates, plywood/MDF. It has exclusive distributorship of Olive brand laminates manufactured by Bloom Dekor Limited. In the initial year SCTL worked as distributors of laminates, MDF in Gujarat and later on in the year 2009 it started branch at Hyderabad, Jaipur, Chennai, Bhiwandi and Chandigarh. At present, the Company is having its branch at Jaipur for catering the demand of Rajasthan and at Bhiwandi for catering the demand of Maharashtra. The Company trades in laminates with varieties like Olive, Olive Saga, Olive Garden, Post Mail Sheet and Sigma etc.
To invest in JV for 50% equity stake and also providing debt of Rs. 5 crore along with raising general corpus fund, the company is coming out with a maiden IPO of 3784000 equity shares of Rs. 10 each at a fixed price of Rs. 64 per share to mobilize Rs. 24.22 crore. Issue opens for subscription on 15.12.15 and will close on 18.12.15. Minimum application is to be made for 1600 shares and in multiples thereon, thereafter. Issue is solely managed by Corporate Strategic Allianz Ltd and registrar to the issue is Satellite Corporate Services Pvt Ltd . Post allotment, shares will be listed on BSE SME. From January 1997 to January 2008 it issued equity at par. In December 2014 it further allotted 187500 shares and in April 2015 1449500 shares at a price of Rs. 80 per share. Its current paid up equity capital of Rs. 1.83 crore will stand enhanced to Rs. 5.61 crore posts IPO.
On performance front, the company has posted an average EPS of Rs. 12.21 on a paid up equity capital of Rs. 0.38 crore. For first half of current fiscal, it has posted net profit of Rs. 0.02 crore on a turnover of Rs. 2.68 crore. If we attribute these earnings on annualized basis on post IPO equity then the asking price is at a P/E of 900 plus. Thus it is exorbitantly priced offer.
Merchant banker has poor track record for its past mandates.
There is no harm in giving this exorbitantly priced offer a miss.
Review By Dilip Davda on December 16, 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 Suncare Traders Ltd offers an early investment opportunity in Suncare Traders Ltd. A stock market investor can buy Suncare Traders IPO shares by applying in IPO before Suncare Traders Ltd shares get listed at the stock exchanges. An investor could invest in Suncare Traders IPO for short term listing gain or a long term.
Read the Suncare Traders IPO recommendations by the leading analyst and leading stock brokers.
Suncare Traders IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Suncare Traders IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Suncare Traders IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Suncare Traders IPO.
The Suncare Traders IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Suncare Traders IPO allotment status to check.
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