Started in 2009, Ashoka Metcast Limited is Ahmedabad, Gujarat based company, engaged in trading of structural steel products such as Round Bars, Flat Bars etc. and through its wholly owned Subsidiary, SGRM company is proposing to manufacture structural steel products like TMT bars, angles, channels, MS Bars etc. Ashoka Metcast Limited is part of a diversified business group with business interests in various sectors including Oil and Gas, Steel, Infrastructure, Electronic Equipments and Real Estate. Its flagship Group Company - Gujarat Natural Resources Limited is engaged in the business of Oil & Gas exploration and production and currently has participating interests in 6 producing blocks in Cambay basin and is operator in four of these blocks. The company is listed on BSE and has a market capitalisation of around 125 crores. Further, Company has recently acquired 100% stake in Shree Ghantakarna Rolling Mills Pvt. Ltd, which owns a rolling mill having aggregate installed capacity of 12,000 tons, but it has been non-operational for past 16 years due to internal financial constraints as well as market conditions. Post acquisition company has begun the process of revamping and expanding its production facilities and intends to begin the production in April, 2018 with an aggregate installed capacity of 18,000 tons per annum. On financial performance front, CRP has reported total revenues/net profits of Rs. 0.10 cr. / Rs. 0.01 cr. (FY17). For period upto 15.11.17 of the current fiscal it has posted net profit of Rs. 0.05 crore on total revenues of Rs. 6.53 cr. The company has reported an average EPS of Rs. 6.9 and an average RoNW of 478.79% for last three fiscals on the basis of equity capital of Rs. 0.01 crore. As per RHP, company has started its trading business from September, 2017. In fact on consolidated basis, it has posted an EPS of Rs. 1.08 and RoNW of 0.86% (both annualised) for the period ended 15.11.17 on an equity base of Rs. 4.71 crore. If we annualise the latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 26 plus and thus issue is fully priced. As per RHP its peers are trading at P/E ranging from 17 to 50. On merchant banker's front, this is the 23rd mandate from its stable in last three fiscals. Out of last 10 listings 2 opened at a discount, 3 around par and the rest with a premium ranging from 1 to 20% on the day of listing. As company has started its operation since September 2017 and which is very short period to analyse performance and issue is fully priced as per latest earnings. So we give NEUTRAL rating to this SME IPO.
✍️ Post a Comment