Friday, December 30, 2016

BS Limited - J M financials worst IPO.

BS Limited(formerly known as BS TransComm Ltd) is a player in Power Transmission & Distribution and Telecom Managed Services. The company came IPO in 2010 at Rs 248 (Rs 10FV). The IPO was solely managed by J M Financials.

While analysing the IPO among others, we wrote the following.


MATTERS OF CONCERN:

IPO grading 2/5 by ICRA.

The company has limited track record  in its core activities (including tower manufacturing, turnkey solutions and O&M services).

High market risk associated with expansion plans, particularly given the high competitive intensity of the business.   Industry dominated by large established players. The company’s capability to sustain current level of growth and return on investments remains to be seen. 

Profitability could be vulnerable to steel price fluctuation risk.

The company witnessed stretched liquidity position, as indicated by instances of LC devolvement and delays in debt servicing in the recent past.  High working capital intensive business. 

In the last 6 years this is one of worst performing stock. Currently the Rs 1 FV, stock is trading around Rs 2.65. 

This is one of the worst IPO lead managed by J M Financials.

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