Marshall Machines Limited

LISTED

SME IPO · IPO Guide

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Issue Price

₹42

Listed On

07 Sep 2018

Listing Price

₹37.45 (-10.83%)

Current Price LIVE

₹37.45 (-10.83%)

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Lot Size Calculator

Application	Lots	Shares	Amount
Retail	2	6,000	₹2,52,000
HNI Min	3	9,000	₹3,78,000

As per financials, company's performance is good, RoNw is 26.82% for last three fiscal and issue is reasonably priced as per latest earnings. Company has shown sudden increase in bottom line for FY18 before IPO and performance of BRLM is bad and most of the recently listed IPOs are trading below issue price. By Looking at expansion plans and future growth of this industry, we give NEUTRAL rating to this SME IPO as per current market situation.

Started in 1994, Ludhiana - Punjab based Marshall Machines Limited is a company engaged in the business of developing, manufacturing and marketing of Machine Tool Equipment. The company is among first Indian CNC Machine manufacturers. The company manufactures a wide range of CNC Turning Centers including its Patented Double Spindle CNC Turning Centers. It provides complete machining solutions to manufacturers of Axles, Crankshafts, Auto Parts, Fans, Pumps, Bearings, Gear Blanks, Bushes, etc. The company's customer list includes GNA, USHA, HERO HONDA, HAVELLS, ROCKMAN, AMTEK AUTO etc. Marshall Machines has an IoTQ and super-optimized machine technology demonstartion center at IMT Gurugram, Haryana. It also has 2 R&D denters in Ludhiana. The centers are focussed on development of super-optimized machines and smart automated machine tool cells. The company has 256 permanent employees on its payroll. As per the performance, MML has posted turnover/net profits of Rs. 39.28 cr. / Rs. 0.59 cr. (FY14), Rs. 42.57 cr. / Rs. 0.25 cr. (FY15), Rs. 43.91 cr. / Rs. 0.42 cr. (FY16), Rs. 50.54 cr. / Rs. 1.10 cr. (FY17) and Rs. 59.42 cr. / Rs. 5.00 cr. (FY18). Thus it has posted gradual growth in top and bottom lines. However, sudden rise in bottom line for FY18 before IPO is a bit surprising. Issue is priced at a P/BV of 3.33 on the basis of its NAV of Rs. 12.62 as on 31.03.18 and at a P/BV of 1.79 based on post issue NAV of Rs. 23.45. For the last three fiscals, it has posted an average EPS of Rs. 3.22 and an average RoNW of 26.82%. If we take into account latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 12. This issue appears reasonably priced with FY18 earnings. But the sustainability of profitability going forward is a major concern. On BRLM's front, for Sarthi Capital Advisors Private Limited this is the 42nd IPO and from last 10 IPOs, 1 opened at par and other listed with 1% to 20% premium on the day of listing. As of now, from last 10 IPOs, 8 are trading below issue price and remaining above issue price. ( As on 24.08.18 ) As per financials, company's performance is good, RoNw is 26.82% for last three fiscal and issue is reasonably priced as per latest earnings. Company has shown sudden increase in bottom line for FY18 before IPO and performance of BRLM is bad and most of the recently listed IPOs are trading below issue price. By Looking at expansion plans and future growth of this industry, we give NEUTRAL rating to this SME IPO as per current market situation.

Fresh Issue

1
Capacity Augmentation.Upgradation of existing R&D and IOTQ centres.Establishment of new IOTQ centres.Working Capital Requirements.General Corporate Purpose.Meet IPO Issue Expenses.
2
Capacity Augmentation.
3
Upgradation of existing R&D and IOTQ centres.
4
Establishment of new IOTQ centres.
5
Working Capital Requirements.
6
General Corporate Purpose.
7
Meet IPO Issue Expenses.
8
All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decision
9
Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published on this applicatio
10
With entry barriers, SEBI wants only well informed investors to participate is such SME offer
11
With crazy recent listings, SME IPOs have started drawing attention of investors across the boar
12
However, as SME issues have entry barriers and continued low preference from broking community, any reader taking decisions based on any information published here does so entirely at own ris
13
Above information is based on information available as on date coupled with market perception

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Disclaimer

No financial information whatsoever published herein, should be construed as an offer to buy or sell securities, or as information to make investment decisions, or as an official confirmation of any transaction. All matter published herein is purely for educational and informational purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

💬 Community Discussion

13 Comments

C
C.A 07 Sep 2018, 14:10

now 15% discount listing.
C
CA Manish Rathi 06 Sep 2018, 08:14

any gmp
C
C.A 30 Aug 2018, 11:15

if oversubscribed below 10 times then very reskey
R
rakeshjain 28 Aug 2018, 19:13

what is rent
I
IPO Guru 28 Aug 2018, 18:26

not active in gray market.
N
nik chhatbar 28 Aug 2018, 15:16

subject2??
C
CA Manish Rathi 28 Aug 2018, 10:00

any gmp
D
Dhruvin 26 Aug 2018, 13:39

i have 15 demat account for rent those account on monthly basis who are interested can contact me mere pass 15 demat account he aur me use rent pe dena chahta hu monthly rent jo bhi interested ho msg ya call kre contact no - seven four zero five five one six one seven nine
P
pankaj 25 Aug 2018, 16:10

thanks GURU. ...and what about Lagnam...however m asking bit early. it's BRLM sarthi's first issue was awesome listing.
I
IPO Guru 25 Aug 2018, 11:50

from all supreme looks better. But major problem of all 3 IPOs are sudden rise in profit.
P
pankaj 24 Aug 2018, 18:21

@Anshul...right question....all wanted to know about the same
A
ANSHUL JAIN 24 Aug 2018, 17:38

@ipo guru who's ipo best 1'supreme 2'marshall 3'sumit woods
P
pankaj 24 Aug 2018, 12:36

thanks...IPO guru...can be applied for listing gain? seems neutral rating for long term....pls clear my doubts

As on Date	Combined (QIB + NII)	RII	Total
Shares Offered / Reserved	18,36,000	18,36,000	36,72,000
Day 1 28-08-18	16,02,000 (0.87)	45,000 (0.02)	16,47,000 (0.45)
Day 2 29-08-18	16,83,000 (0.92)	4,26,000 (0.23)	21,09,000 (0.57)
Day 3 30-08-18	60,72,000 (3.31)	22,02,000 (1.20)	82,74,000 (2.25)

Period	Total Income	Total Expenses	Profit After Tax (PAT)
FY 18	59.42	51.96	5.03
FY 17	50.54	48.75	1.10
FY 16	43.91	43.18	0.42
FY 15	42.57	42.16	0.25
FY 14	39.28	38.37	0.59

Open Date	Aug 28, 2018
Close Date	Aug 30, 2018
Allotment Date	Sep 05, 2018
Listing Date	Sep 07, 2018
Face Value	₹ 10 Per Equity Share
Issue Price	₹ 42 Per Equity Share
Issue Size	Fresh Issue of Up to 38,70,000 with aggregating up to Rs 16.25/- Cr
Retail Min Lot	1 Lot (3,000 Shares - ₹ 1,26,000)
Lead Manager	Sarthi Capital Advisors Private Limited

Company	P/B Ratio	P/E Ratio	RoNW	Total Revenue (Cr)
Marshall Machines Limited Current	1.79	12.21	43.36%	59.42
Macpower CNC Machines Limited	3.80	28.96	13.21%	107.48
Lokesh Machines Limited	0.71	20.33	3.55%	182.77

Marshall Machines Limited

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