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Review By Dilip Davda on September 10, 2017
Worth Peripherals Ltd. (WPL) is engaged in manufacturing of corrugated boxes. It is ISO 9001:2008 and FSC certified company enjoying consumer preference for their needs. Company’s both manufacturing units are located at Pithampur, Dhar, Indore (MP). It has fully automated plant that can have multi colour (up to 6 colours) printing. With growth in the retail, pharma, breweries, textile sectors, opportunity for growth in packaging industries has increased and thus Company aims to tap these markets for further marketing and supply. Indian packaging industry is currently valued at Rs. 85000 crore and is growing at an annual rate of 15 per cent plus. Sector is expected to be triple in next five years.
To part finance its purchase of plant and machinery, repayment of certain borrowings, working capital and general corpus fund needs, WPL is coming out with a maiden IPO of 4251000 equity share of Rs. 10 each via book building route with a price band of Rs. 40 – 43. The company plans to mobilize Rs. 17.00 to 18.28 crore (based on lower and upper price bands). Issue opens for subscription on 15.09.17 and will close on 19.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Pantomath Capital Advisors Pvt. Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue will constitute 26.99% of fully diluted post issue paid up equity capital of the company. WPL has issued entire equity at par and has also issued bonus shares in the ratio of 1 for 1 in February 2017. Post IPO, its current paid up equity capital of Rs. 11.50 crore will stand enhanced to Rs. 15.75 crore.
On performance front, for last four fiscals, WPL has posted turnover/net profits of Rs. 84.23 cr. / Rs. 5.15 cr. (FY14), Rs. 107.78 cr. / Rs. 6.02 cr. (FY15), Rs. 127.40 cr. / Rs. 6.47 cr. (FY16) and Rs. 132.15 cr. / Rs. 7.32 cr. (FY17). The Company has been delivering consistent performance in growth with its revenue growth of more than 22% EBITDA growth of more than 18% and PAT growth of more than 20% over past 5 years. Last three fiscals average EPS is Rs.5.93, RoNW is 19.19%. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 9 plus and at a P/BV of 1.21. Thus issue is priced reasonably. It has no listed peers, as claimed in the prospectus.
On merchant banker’s front, this is the 44th mandate in last three years. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price.
Conclusion: Listed companies in packaging industry are trading at a P/E of over 62 plus. This issue appears priced reasonably. Investment may be considered for medium to long term.
Review By Dilip Davda on September 10, 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 Worth Peripherals Ltd offers an early investment opportunity in Worth Peripherals Ltd. A stock market investor can buy Worth Peripherals IPO shares by applying in IPO before Worth Peripherals Ltd shares get listed at the stock exchanges. An investor could invest in Worth Peripherals IPO for short term listing gain or a long term.
Read the Worth Peripherals IPO recommendations by the leading analyst and leading stock brokers.
Worth Peripherals IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Worth Peripherals IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Worth Peripherals IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Worth Peripherals IPO.
The Worth Peripherals IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Worth Peripherals IPO allotment status to check.
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