Tuesday, August 2, 2016

S P APPARELS OPENS TODAY : EXPENSIVE VALUATION - AVOID



                                                 ISSUE DETAILS

ISSUE OPENS / CLOSES ON

02-088 / 04-08-2016
ISSUE SIZE
215 cr
PRICE BAND
RS 258 -268
FACE VALUE
RS 10

BUSINESS
Manufacturer and exporter of knitted garments for infants and children
PROMOTERS
 P.SUNDARARAJAN AND MRS. S. LATHA
LISTINGS
NSE, BSE
BRLMs
MOTILAL OSWAL, CENTRUM CAPITAL
REGISTRAR
LINK INTIME
IPO GRADE
NA


BUSINESS:

S P apparels are into manufacturer and exporter of knitted garments for infants and children. These are manufactured at their integrated facilities that allow them to provide end-to-end garment manufacturing services from greige fabric to finished products.
The company also manufacture and sells menswear garments in India under the brand ‘Crocodile’.

OBJECT OF THE ISSUE:

The company is coming out with an IPO to part finance its debt, expansion and modernization of manufacturing facilities. The IPO is an combo offer with fresh equity issue worth Rs 215 crore (approx. 88.23 lakh shares) and offer for sale by existing stakeholders of 900000 equity shares. 

 ( The real object is to provide exit route to PE / early investors.)

FINANCIALS:

 For FY16, the company earned revenue of Rs. 537.75 cr and net profit of Rs 35 cr.

SP Apparels' EBITDA and net profit margins stood at 16.8 per cent and 6.5 per cent, respectively -- less than half of Kitex Garments' figures which stood at 34 per cent and 21 per cent.

The IPO is priced around 20 PE on fully diluted equity, on its FY 17 earnings, which is on the higher side.  Fair valuation is around RS 150.


TRACK RECORD OF BRLMS


BRLMs handled four public issues in past three years out of which three issues closed below the issue price on listing date.

AVOID THE IPO.




No comments:

Post a Comment