Saturday, October 29, 2016

IPO ANALYSIS: GREEN SIGNAL BIO PHARMA : MORE RED SIGNALS - AVOID



ISSUE DETAILS:



ISSUE OPENS / CLOSES ON
09 -11 / 11-11-2016

ISSUE SIZE
PUBLIC OFFER OF 1,45,79,560 EQUITY SHARES
FACE VALUE
RS 10
PRICE BAND
RS 76-80
PROMOTERS
SUNDARA PARIPOORANAN AND DR. P. MURALI  
BRLM / REGISTRAR
INDIAN OVERSEAS BANK / BIG SHARE
BUSINESS
Manufacturers and exporters of vaccines






BUSINESS:

The company is in to vaccine manufacturing. As on date they have two products: 1. BCG Vaccine - for immunization against Tuberculosis 2. BCG-ONCO - for Immunotherapy for the treatment of Urinary Bladder Carcinoma. As both vaccines produced by the company are generic drugs and they do not require any patents for the same.

OBJECTS OF THE ISSUE:

       Objects of the Offer are to achieve the benefits of listing the Equity Shares on the on the exchanges and to carry out the sale of up to 14,579,560 Equity Shares by the Selling Shareholders.

RISKS

1. Two products company. BCG Vaccine and BCG ONCO contribute more than 72% to the total revenue of the company.

2. Operates in highly price regulated markets in India.

3. Single manufacturing facility.

4. Company has made a Net loss for the preceding four out of five financial years.

5.  Very high debtor and inventory level.



VALUATION AND RECOMMENDATIONS:

The company has limited history of profitability. Debtors and inventory levels are high, indicating that products are not fast moving and the company has been  extending abnormal credit period for the buyers.

At Rs 76-80, the offer is made at 20 plus PE on FY 16 earnings which is expensive. After the IPO / OFS, the promoters’ holdings will come down by 38%.



INVESTORS CAN SKIP THIS IPO.



No comments:

Post a Comment