January 2018 - Indian IPO Blog

Indian IPO Blog

Insights into investing world in India

Sunday, January 28, 2018

InvestorFocus - Stock Recommendation - Long Term EICHER MOTORS

January 28, 2018 0
InvestorFocus - Stock Recommendation - Long Term EICHER MOTORS

Scrip: Eicher Motors Limited
CMP: Rs.26,500
Recommendation: BUY
Horizon: Long Term (1 to 2 years)

Company Background
Eicher Motors Limited (EML) (BSE: 505200, NSE: EICHERMOT Bloomberg: EIM IN Reuters: EICH.NS) is the listed parent of Royal Enfield, the global leader in middleweight motorcycles. The world’s oldest motorcycle brand in continuous production, Royal Enfield has made its distinctive motorcycles since 1901. Focused on bringing back simple, yet engaging and accessible motorcycling, Royal Enfield operates in India, and over 40 countries around the world. With modern development facilities in Leicestershire, UK and Chennai, India, Royal Enfield makes its motorcycles in Tamil Nadu for the world

In addition to motorcycles, Eicher has a joint venture with Sweden’s AB Volvo - Volvo Eicher Commercial Vehicles Limited (VECV) - which is driving modernization in India's commercial vehicle space, and in other developing countries. VECV has a complete range of trucks and buses from 5-49 tonnes, and its integrated manufacturing plant in Pithampur, Madhya Pradesh is the global hub for medium duty five- and eight-litre engines for Volvo Group. Since 2012, Eicher has an equal joint venture with US-based Polaris Industries Inc - Eicher Polaris Private Limited - and introduced the Multix 3-in-1 vehicle

Financials





  • The company has managed 593450 units of Royal Enfield which is quite impressive by any standard
  • At FY18E earnings, the company would be trading at a PE ratio of around 33.5 which is substantially justified given the growth prospects
  • Despite depreciation provision, net profit has been impressive for the company
  • EBIDTA Margins stand close to 32 percent which shows strong relative position
  • Company continues to enjoy strong presence across market with around 24% of market share in FY17 and a similar number expected in the current year

Future prospects
  • Demand for Royal Enfield has historically remained healthy and is expected to continually do so with constant waiting period for its flagship "Classic 350" variant
  • Company is planning to launch 3 new models in Apr'18 which will further garland the demand meter
  • Company has re-iterated production target of approximately 825000 units in current financial year. It is however expected that the production would end up being way above this ballpark figure
  • There are 30 exclusive dealers of Royal Enfield in international markets and the company is constantly expanding its footprint both in India and abroad

Synopsis
Considering the continual strong position of the company and maintenance of its market position, the strong track record and visible growth prospects, it is recommended to buy the stock at current levels with objective of incorporating it as a strong pillar in the portfolio with a long term time horizon of 6 months to 2 years


Disclaimer: The market view and recommendation posted are in no way a guarantee (whether express or implied). It is clarified that Indian IPO Blog or any of authors are in no way responsible for any loss suffered by user. Investors are advised to do their own research before making investments in stocks discussed. The author may have positions or stake in the stock discussed

Friday, January 26, 2018

Galaxy Surfactants IPO Review - Indian IPO Blog

January 26, 2018 0
Galaxy Surfactants IPO Review - Indian IPO Blog
Galaxy Surfactants Limited is a Mumbai based manufacturer of surfactants and other specialty ingredients for the personal care and home care industries. The ingredients company manufacture are commonly used in consumer-centric personal care and home care products like skin care, oral care, hair care, cosmetics, toiletries and detergent products. Galaxy Surfactants product portfolio includes over 200 product grades, which are marketed to over 1,700 customers in 70 countries

Galaxy Surfactants products are classified in 2 categories:
1. Performance Surfactants: This includes anionic surfactants and non-ionic surfactants.
2. Speciality Care Products: This includes amphoteric surfactants, cationic surfactants, UV filters, preservatives, preservative blends and surfactant blends, speciality ingredients such as mild surfactants, syndet and transparent bathing bars and proteins, fatty alkanolamides and fatty acid esters, and other care products.

Customers include Cavinkare Private Limited, Colgate-Palmolive (India) Limited, Dabur India Limited, Henkel, Himalaya, LOREAL, Procter & Gamble Home Products Private Limited, Reckitt Benckiser and Unilever

Red flag: The company tried to raise money in 2011 but failed as only 30% subscription was garnered

Galaxy Surfactants IPO - Issue information
Date : Jan 29, 2018 – Jan 31, 2018.
Issue Price: Rs 1470 – Rs 1480, minimum lot of 10 shares.
Issue Size:  937.09 Cr
Objects of Issue: The issue is total offer for sale. No money will be received by the company.

Risks in Galaxy Surfactants IPO
  • As of September 30, 2017, they conducted operations through seven manufacturing facilities and one pilot plant.
  • They do not have long-term agreements with suppliers for their raw materials.
  • For the six months ended September 30, 2017 and the Fiscals 2017, 2016 and 2015,  cost of materials consumed was ₹7,976.96 million, ₹15,144.88 million, ₹11,153.65 million and ₹12,532.98 million, or 66.63%, 69.74%, 61.66% and 66.81% of  total revenue, respectively.
  • They currently generate a significant portion of  revenues from limited number of major customers. For the six months ended September 30, 2017 and the Fiscals 2017, 2016 and 2015, the top ten customers contributed ₹6,977.65 million, ₹11,833.64 million, ₹9,642.79 million and ₹11,252.47 million, or 58.51%, 54.75%, 53.51% and 60.05% of  total revenues from operations, respectively

Strengths in Galaxy Surfactants IPO
  • Established Global Supplier to Major FMCG Brands with Demonstrated Track Record.
  • Robust Product Portfolio Addressing Diverse Customer Needs.
  • Proven R&D Capabilities with Dedicated Focus on Innovation.
  • Global Footprint Supporting Local Reach.
  • Professional and Experienced Management Team

Analysis of Financial Statements:

Balance Sheet:
  • Reserves & Surplus have grown ~3x from 2013 to Sept 2017.
  • One notable observation is that the company has maintained its debt at healthy levels in the recent times.
  • ~25% of total assets are tied up in trade receivables for all the past periods. Perhaps this is a indicator of inefficient collection business.
  • Short term borrowings have also gone up in recent times. We will see if the spillover effect of High Trade receivables and short term borrowings are having an effect on the Cash flow of the business
  • The company has a notable debt to equity ratio trajectory:
Profit & Loss:
  • Strong consolidated growth in revenue observed at around 17% CAGR in past 5 years
  • However, cost of materials consumed form ~70% of the total costs. Any fluctuations in the prices of the same will have direct negative effect
  • EPS Trajectory is strong as shown below:

IPO Valuation:
There are no listed peers to compare the PE ratio. The company is having an EPS of Rs.41.27 at FY17. At this earnings, the PE ratio works out to be 35.80x at the upper end of the price band. Based on last 3 years consolidated restated EPS of Rs.33.46, the PE ratio works out to be 44.20x at the upper end of price band


IPO Recommendation Synopsis:
Although the good financials, increasing profitability trend and improvement in key ratios such as Debt to Equity may warrant a subscribe, investors need to exercise caution especially in the light of risks enlisted above. Although long term investors may be tempted to go for it as a sectoral addition to the portfolio, high listing gains may not be feasible for short term investors considering the PE ratio and no comparable peers around


The article is presented in conjunction with guest writer Aditya Kondawar from  stocksandbiceps.com

    Thursday, January 25, 2018

    Amber Enterprises IPO Allotment status declared

    January 25, 2018 0
    Amber Enterprises IPO Allotment status declared

    Monday, January 22, 2018

    Indian IPO Blog - Know your stock! - Get in-depth research and recommendations on selected stock

    January 22, 2018 0
    Indian IPO Blog - Know your stock! - Get in-depth research and recommendations on selected stock
    Indian IPO Blog presents "Know your stock" 

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    Sunday, January 21, 2018

    Apollo Micro Systems Listing on Jan 22

    January 21, 2018 0
    Apollo Micro Systems Listing on Jan 22
    Apollo Micro Systems, which caters primarily to the defence and aerospace sectors, will debut on the bourses on Monday. The issue price for its initial public offer was Rs 275 per share

    Apollo Micro Systems Limited is Hyderabad based company engaged in the business of electronic, electro-mechanical, engineering designs, manufacturing and supply. Company design, develop and sell high-performance, mission and time critical solutions to Defense, Space and Home Land Security for Ministry of Defense, government controlled public sector undertakings and private sectors.

    Apollo Micro Systems offers custom built COTS (Commercially off-the shelf) solutions based on specific requirements to defense and space customers. Company has participated in several Indigenous Missile programs, underwater electronic warfare, underwater missiles, surface to air missiles, nuclear missile programs, surface to surface missile programs, indigenous submarine programs UAV’s long and short endurance, ships, space programs.

    Stay tuned to Indian IPO Blog and Indian IPO Blog Whatsapp Group for latest updates on Apollo Micro Systems IPO

    Galaxy Surfactants IPO opens from Jan 29

    January 21, 2018 0
    Galaxy Surfactants IPO opens from Jan 29
    Galaxy Surfactants Limited is Mumbai, India based manufacturer of surfactants and other specialty ingredients for the personal care and home care industries. The ingredients company manufacture are commonly used in consumer-centric personal care and home care products like skin care, oral care, hair care, cosmetics, toiletries and detergent products.

    Galaxy Surfactants product portfolio includes over 200 product grades, which are marketed to over 1,700 customers in 70 countries. Galaxy Surfactants is leading manufacturer of these ingredients. Almost all major FMCG companies in India are Galaxy Surfactants customers. This includes Cavinkare Private Limited, Colgate-Palmolive (India) Limited, Dabur India Limited, Henkel, Himalaya, LOREAL, Procter & Gamble Home Products Private Limited, Reckitt Benckiser and Unilever

    Galaxy Surfactants IPO Details
    Issue open on: Jan 29, 2018
    Issue closes on: Jan 31, 2018
    Issue Size: 6,331,674 Equity Shares of Rs.10
    Price Band: Rs.1470 to Rs.1480 per equity share
    Bid Lot: 10 Equity Shares and in multiples thereof
    Listing At: BSE and NSE


    Friday, January 19, 2018

    Apollo Micro Systems IPO Allotment status

    January 19, 2018 0
    Apollo Micro Systems IPO Allotment status

    Tuesday, January 16, 2018

    SEBI says ok to Barbeque Nation IPO

    January 16, 2018 0
    SEBI says ok to Barbeque Nation IPO
    Barbeque Nation Hospitality has received markets regulator Securities and Exchange Board of India’s (Sebi) approval to raise an estimated Rs700 crore through initial public offering (IPO)

    According to the Draft Red Herring Prospectus filed by the company, Barbeque Nation Hospitality’s IPO comprises fresh issue of shares worth Rs. 200 crore and an offer for sale of up to 6,179,000 equity shares

    Barbeque Nation is an Indian restaurant chain by Barbeque Nation Hospitality Ltd. The first restaurant opened in Mumbai in January 2006. The restaurant chain also has private equity firm CX Partners as its investor

    In addition to the Mumbai and Pune it has outlets in various other cities such as Chennai, Coimbatore, Madurai, Kochi,Calicut, Thrissur, Vijayawada, Delhi, Kolkata, Hyderabad, Chandigarh, Mohali, Gurgaon, Jaipur, Lucknow, Ahmedabad, Nagpur, Panjim, Visakhapatnam, Vadodara, Noida, Kanpur, Surat, Trivandrum and Bhubaneswar

    Monday, January 15, 2018

    IPO of Newgen Software - owner of OmniDocs system opens from January 16

    January 15, 2018 0
    IPO of Newgen Software - owner of OmniDocs system opens from January 16
    Newgen Software Technologies is Delhi-based Software Product Company. Newgen offers product and platform that enables organizations to rapidly develop powerful software applications. Company mainly offers products in ECM and BPM space. Company sells its products through direct sales and through its 300 strong channel partners globally.

    Newgen Software has four patents registered in India and 27 outstanding patent applications in India and one outstanding patent application in the USA. Newgen has over 450 active customers in over 60 countries. These customers are served by over 265 employees.

    Newgen Software platform comprises of:
    1. OmniDocs Enterprise Content Management (ECM) Software (to digitization of enterprise content and information)
    2. OmniFlow Intelligent Business Process Suite (BPM) (to manage a complete range of business processes)
    3. OmniOMS Customer Communication Management suite (unified communication platform to improve communication with customers)

    The IPO would be open between January 16 and January 18, 2018. Shares are offered in a Price Band of Rs.240/- to Rs.245/- a share with a bid lot of 61 equity shares and in multiples thereof

    Amber Enterprises India Limited IPO - Download Red Herring Prospectus (RHP)

    January 15, 2018 0
    Amber Enterprises India Limited IPO - Download Red Herring Prospectus (RHP)

    Thursday, January 11, 2018

    Apollo Micro Systems IPO Subscription status update till Day 2

    January 11, 2018 0
    Apollo Micro Systems IPO Subscription status update till Day 2

    Apollo Micro Systems Ltd. - Day 2 Subscription Fig.,@ 5 P.M.
    QIB*: 3.31×
    NII:1.61×
    Retail: 15.44×
    Employees: 9.82×
    Overall : 9.16×
    Forms: 498,460
    Retail on the Basis of Appln Wise: 12.05×
    * Excluding Anchor

    Wednesday, January 10, 2018

    Amber Enterprises IPO Schedules and Details

    January 10, 2018 0
    Amber Enterprises IPO Schedules and Details
    Amber Enterprises Limited IPO Details
    Anchor Book open & close: 16-Jan-2018
    Offer Opens On: 17-Jan-2018
    Offer Closes On: 19-Jan-2018
    Price Band: ₹ 855 to ₹ 859
    Bid Lot: 17 Equity Shares & in multiples of 17 thereafter
    Employee Discount: ₹ 85 on issue price
    Face Value: ₹ 10 per share
    Listing: NSE & BSE

    Indicative Timetable Post closing:
    Finalisation of Basis of Allotment: on or about 24-Jan-2018
    Initiation of Refund: on or about 25-Jan-2018
    Credit of shares: on or about 29-Jan-2018
    Commencement of Trading: on or about 30-Jan-2018

    Thursday, January 4, 2018

    Apollo Micro Systems IPO Details

    January 04, 2018 0
    Apollo Micro Systems IPO Details

    KPI Global (SME IPO) Details

    KPI Global (SME IPO) Details Issue Open Jan 8, 2019 - Jan 11, 2019 Issue Type Fixed Price Issue IPO Issue Size 4,992,000 Eq Shar...