Shri Krishna Prasadam IPO-Is it worth investing?

Shri Krishna Prasadam SME IPOShri Krishna Prasadam IPO Analysis

New Delhi based Shri Krishna Prasadam SME IPO has hit the market this week. Company issues the shares at par of Rs 10 per share without any premium. Company makes good revenue growth of 70% and 50% in previous two financial years. All looks pretty good. What should be your take on this IPO. Can you bet on the Shri Krishna Prasadam IPO? Does this IPO of Shri Krishna Prasadam gives at least listing gains?

About Shri Krishna Prasadam

Initially Shri Krishna Prasadam was engaged in the business of manufacturing, exporting and supplying of gemstones, stone jewelry, rudraksha beads, shivlings, shri yantras, sphatik ganesh, rudraksha pendant, rudraksha mala, etc. in India. However, in view of the market scenario and increase in the custom duty payable on Gold, the board of directors decided to alter the object clause of the company in order to allow it to operate in areas such as real estate, consultancy services and agricultural activities.

Also Read: Loha Ispat Limited IPO closes on 20-Mar-14, should you invest?

Issue details of Shri Krishna Prasadam  IPO

  • IPO opens: 11-Mar-2014
  • IPO closes: 14-Mar-2014
  • Face value: Rs 10 per share
  • Issue price: Rs 10 per share
  • Minimum bid: 10,000 shares
  • Minimum investment: Rs 100,000
  • Maximum investment by retail investors: Rs 200,000
  • Listing: BSE SME
  • Download Shri Krishna Prasadam IPOProspectus from SEBI website at this link

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

  • To raise funds for additional long-term working capital for the business of trading of agricultural product
  • Meeting public issue expenses

Company Financials

The company has posted revenue of Rs 8.44 Lakhs for the year ended Mar-2009 and Rs 25.70 Lakhs for the year ended Mar-2013. First 11 months of this financial it year made a revenue of Rs 169 Lakhs.

The company has posted a profit of Rs 19,491 for the year ended Mar-09 Vs Rs 10,986 for the year ended Mar-2013. First 11 months of this financial year it made a profit of Rs 3.43 Lakhs.

Shri Krishna Prasadam Financials; New Delhi based Shri Krishna Prasadam SME IPO has hit the market this week

Reasons to invest Shri Krishna Prasadam IPO

  • Good revenue growth in last two years. Revenues increased from Rs 25.70 Lakhs from last year to Rs 169 Lakhs in 10 months of this financial year.

Reasons not to invest in an Shri Krishna Prasadam IPO

  • Profits are very thin. It earned Rs 10,986 in the last financial year (FY 2012-13) on a turnover of Rs 25.70 Lakhs. These can be easily wiped out with a small increase in costs.
  • SME IPO’s are trading in low volumes. Liquidity could be an issue.

Also read: Do you know how NRI's can invest in MF's in India?

Recommendation / Investment strategy:

  • Average EPS for the last 3 years is Rs 0.15 At issue price of Rs 10, this translates to a P/E ratio of 65. Based on last financial year 2012-13 EPS of Rs 0.01, P/E ratio works out to be 1,000. Even 10 months EPS for FY 2013-14 EPS shows 0.29 which translates the P/E ratio of 34. Its competitors like Eco Friendly Foods P/E ratio is 260.81 and Lakshmi Energy and Foods P/E ratio is 2 with average in this segment of 10.4. Since company cannot issue shares below this issue price of Rs 10, investors might get tempted to buy at this rate. However, at a P/E ratio of 1,000 based on last financial year data looks very expensive.
  • Though company revenues are growing, considering thin margins and high issue price, my suggestion to investors is to stay away from such SME IPO.

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Shri Krishna Prasadam IPO


  • Mohit

    Hi Suresh,

    Is it possible to get the financial details of any SME which is not listed on BSE/NSE via any mechanism?? Actually, I want to know the financial status of my uncle's company via an indirect manner. Please give me suggestion on the same.

    Truly speaking, I will be really thankful, if you can sought some mechanism as my uncle & other directors brag a lot related to the financials of his company & I feel that they are incurring loss instead of making huge sum of money.

    • Hi Mohit, As per my knowledge there is no database to get the financials of unlisted companies in India. I tried googling for some time, but could not get any clue on this.

    • Akash

      Yes, there is.Balance Sheet and Profit & Loss can be easily gathered from MCA

      • Thanks Akash. That was a nice tip.

        • Mohit

          @Akash: What is the procedure to access balance sheet of the company?? Currenlty, I am able to access only master data of the company but how to access the balance sheet?

          @Suresh: Thanks for searching info. related to the same on Google.

          • Akash

            You have to Pay MCA fees for that. then u can acess data and download forms.

          • Mohit

            Thanks Akash! I went thru the website of MCA & got all information regarding the same. One last question, if I pay the fee to MCA & download the info. related to the financials of the company, will my uncle come to know about the same thru MCA that someone had requested for the financials of his company?? If yes, what information will he get regarding who had accessed the data. Will MCA share the Name of the person to him or what was the name on Credit Card/Net Banking Account or any other indirect details from where he can find out the person who had accessed the data??

            It's a lot important for me to hide my identity while accessing the data of his company & at no cost, the same should be revealed to him.

          • Akash

            No, I do this all the time.

          • Mohit

            Thanks Akash for the valuable information.

          • Akash

            Welcome. Glad to Help You.

  • Ravi

    Nice review. liked it.

  • Sri

    Thanks for the recommendations.

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