Wednesday, March 15, 2017

IPO ANALYSIS : Shankara Building Products Limited




ISSUE DETAILS


ISSUE OPENS / CLOSES ON
22-03 / 24-03-2017
ISSUE SIZE
Fresh issue of equity plus OFS of 65,21, 740 shares, aggregating upto Rs 400 cr.
Price Band
Rs 440-460
PROMOTERS
Sukumar Srinivas
LISTINGS
Bse, Nse


BRLM

IDFC Bank, Equirus capital, HDFC bank
BUSINESS
Mfrs of building products -TMT, Cement, Scaffolding, Msand, Steel Pipes, Roofing Solution, Plumbing, Electrical, Paints, Tiles, Exterior cladding, Solar products, etc
REGISTRAR
Karvy



Business:

The company is in to organised retailing of home improvement and building products.  Under retail operations, the company offers a comprehensive range of products at our stores, including structural steel, cement, TMT bars, hollow blocks, pipes and tubes, roofing solutions, welding accessories, primers, solar heaters, plumbing, tiles, sanitary ware, water tanks, plywood, kitchen sinks, lighting and other allied products.

Risks:
  1. Non compliance of regulatory filings in the past.
  2. Acquisition of a subsidiary without proper valuation.
  3. Declining RoNW.
  4. Company has experienced negative cash flows in four of the preceding five Fiscals.


          Financials:
   


                   (Rs in crores)


31-12-2016
(9 months)
31-03-2016
31-03-2015
Capital
21.87
21.87
21.87
Revenue
1709
2036
1979
Net profit
41.54
41.32
22.57
EPS
18.99
18.90
10.32



Valuation and recommendations:

The offer is made around 25 PE, on its post IPO equity, which is expensive for not so professionally manged centerprise.

AVOID THE IPO.

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