Unishire Urban Infra IPO-Should you invest?

Unishare Urban Infra IPO-Feb-2014; Unishire Urban IPO; Unishire IPOUnishire Urban Infra IPO-Should you invest?

Unishire Urban Infra IPO would hit the market today (10th February, 2014). Unishire Urban Infra is Kolkata based company. In the last 5 years, it incurred loss in two financial years. However, several such companies have been coming to market for IPO subscription to fool investors. In this article, I would provide details about the Unishire Urban Infra IPO and whether it is good for investment or not.


Also Read: IPO's gave 65% returns in 2013 – Have you invested in these winning IPOs ?

About Unishire Urban Infra

Unishire Urban Infra is a Kolkata based company engaged in real estate development and construction.

Issue details of Unishire Urban Infra  IPO

  • IPO opens: 10-Feb-2014
  • IPO closes: 12-Feb-2014
  • Face value: Rs 10 per share
  • Issue price: Rs 10 per share
  • Minimum bid: 10,000 shares for retail investors and in multiples of 10,000 shares thereof. Maximum shares to retail investors are 20,000 only
  • Minimum investment: Rs 100,000
  • Lead managers: Inventure Merchant Banker
  • Listing: BSE SME

Download Prospectus of Unishire Urban Infra IPO from SEBI Website

The purpose of the IPO: The funds would be used for the following purposes.

  • Development of residential building complex at Kolkata

Company Financials

  • The company has posted revenue of Rs 16.47 Lakhs for the year ended Mar-2009 and Rs 478.60 Lakhs for the year ended Mar-2013. Revenues for the 7 months ended Oct-2013 are Rs 515.95 Lakhs.
  • The company has posted a loss of Rs 45,000 for the year ended Mar-09 Vs loss of Rs 12,000 for the year ended Mar-2013. It posted Rs 19.73 Lakhs profit for the 7 months ended Oct-2013 which is good.

Unishare Urban Infra IPO-Feb-2014; Unishire Urban IPO; Unishire IPO

Reasons to invest Unishire Urban Infra IPO

  • Good growth in revenue in last 5 years.
  • It posted profits in first 7 months of this financial

Reasons not to invest in an Unishire Urban Infra IPO

  • Company revenues are not consistent. Its revenues have significantly increased only last financial year and in the first 7 months of this financial year. We need to wait and see about consistent performance in revenues.
  • The company incurred a loss for 2 financial years out of 5 financial years. Though revenues has increased dramatically in FY 2012-13 to Rs 478 Lakhs, it incurred a loss of Rs 12,000 in that year.
  • The IPO’s listed on the BSE SME platform are trading on low volume and  liquidity is an issue.
  • Minimum investment required is Rs 1.00 lakhs.

Also Read: What is beta value of stock and how it would be useful for you as an investor?

Recommendation / Investment strategy:

  • Average EPS for the last 3 years is Rs 0.06. At issue price of Rs 10, this translates to a P/E ratio of 169.08. We cannot compare FY-12-13 EPS as it incurred a loss. It peers like Aricent Infra Ltd are trading at a P/E ratio of 310.5 (Highest) and Lok Housing Ltd at P/E ratio of 3.8 (Lowest). Hence the issue price of Unishire Urban Infra IPO looks expensive for such SME IPO where it incurred a loss in the last financial year.
  • Though there is a sudden jump in revenues in last 19 months ended Oct-2013, the profits it received in 7 months ended Oct-13 are still questionable unless we see consistent margins.

Considering above facts, my suggestion to investors is to stay away from such investments in IPO.

If you enjoyed this article, share it with your friends and colleagues through Facebook and Twitter.

Unishire Urban Infra  IPO


Leave a Reply

Your email address will not be published. Required fields are marked *