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Review By Dilip Davda on February 14, 2017
Tanvi Foods (India) Ltd. (TFL) is involved in trading, distribution, and processing of Food and Beverages primarily operating in the states of Andhra Pradesh and Telangana. Currently it operates over four exclusive point of sales; three Cold Room Facilities aggregating to 8,728 sq. ft., one food processing and packaging unit spread across 495 sq. yards, around 28 logistics vehicles dedicated towards F&B distribution making it one of few select organized players in this highly unorganized segment.
TFL currently specialize in products such as Fresh Corn, Frozen Corn, and Green Peas in loose as well as packed form. It also prepare and sell corn based eatables such as Corn Samosa’s, Corn Patties and Spring Roll, in loose /semi-finished form to caterers as well as packaged from to Retailers and Wholesalers. All of these packaged products are sold under own brand name “Frozen Kings”. In addition to own brand products; it operates a diversified F&B product distribution and trading business wherein the company plays the role of an intermediary between other branded product manufacturers/marketers and end point of sales such as Retailers (including Kiranas and Modern Trade Outlets) and Institutional buyers (such as Hotels, Caterers, Multiplexes etc.). TFL also operates an independent Logistics/Infrastructure services business which in addition to supporting own F&B distribution business also provides Pan India Logistics services to other distributors and players. Company’s logistics/infra services business vertical includes providing transportation services as well as Cold Storage / Warehousing facilities on per ton and per pallet basis respectively.
To part finance its long term working capital requirement and raise general corpus fund, the company is coming out with a maiden IPO of 1100000 equity share of Rs. 10 each at a fixed price of Rs. 60 per share to mobilize Rs. 6.6 crore. Offer consists of 672000 fresh equity shares as well as offer for sale of 428000 shares. Issue opens for subscription on 17.02.17 and will close on 22.02.17. Post allotment, shares will be listed on BSE SME. Minimum application is to be made for 2000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Aryaman Financial Services Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. The issue and the net issue will constitute 26.72% and 25.36%, respectively of the post issue paid up equity share capital of the company. From inception till April 2014 it issued all equity at par and in December it issued further equity at a price of Rs. 17 per share. Post issue its current paid up equity capital of Rs. 3.44 crore stand enhanced to Rs. 4.12 crore. The company has not paid any dividend since inception.
On performance front, on standalone basis the company has posted turnover/net profits of Rs. 20.03 cr. / Rs. 0.21 cr. (FY14), Rs. 34.38 cr. / Rs. 0.87 cr. (FY15) and Rs. 49.09 cr. / Rs. 1.01 cr. (FY16). On consolidated basis the company posted net profit of Rs. 1.57 crore on a turnover of Rs. 51.74 crore for the fiscal 2016. For first half ended 30.09.16, on a consolidated basis it has earned net profit of Rs. 0.51 crore on a turnover of Rs. 29.91 crore. If we annualize these earnings and attribute on fully diluted equity post issue then asking price is at a P/E of around 24 plus making it a pricy bet.
On merchant banker’s front, this is the 12th IPO from its stable in last three years and past mandates have shown mixed trends.
Conclusion: Considering higher pricing, risk savvy cash surplus investors may consider investment for long term.
Review By Dilip Davda on February 14, 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 Tanvi Foods (India) Ltd offers an early investment opportunity in Tanvi Foods (India) Ltd. A stock market investor can buy Tanvi Foods IPO shares by applying in IPO before Tanvi Foods (India) Ltd shares get listed at the stock exchanges. An investor could invest in Tanvi Foods IPO for short term listing gain or a long term.
Read the Tanvi Foods IPO recommendations by the leading analyst and leading stock brokers.
Tanvi Foods IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Tanvi Foods IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Tanvi Foods 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 Tanvi Foods IPO.
The Tanvi Foods IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Tanvi Foods IPO allotment status to check.
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