Opal Luxury Time Products IPO
Pune based, Opal Luxury Time Products Ltd is coming up for public issue for Rs 13 Crores at a price band of Rs 130 to 135 (Rs 10 face value with a premium of Rs 120 to Rs 125 per share). Should we subscribe to Opal Luxury Time Products IPO?
About Opal Luxury Time Products
Opal Luxury Time Products is incorporated in 2007and is engaged in manufacturing and marketing of home decor products. Currently Opal design and manufacture wall and table clocks and market them under dual brands. One is the premium brand 'Opal' and other is budget brand 'Caliber'.
They offer 109 styles of clocks under their brand ‘OPAL’ those ranges from Rs 1,450 to Rs 27,500. They also have 31 styles of clocks under ‘Caliber’ brand with average MRP of Rs 370. Company is headquartered in Pune and currently has a manufacturing facility in the industrial area of Roorkee, Uttarakhand. They have recently started exporting both their brands, ‘Opal’ and ‘Caliber’ to the United States.
- IPO opens: 25-Mar-2013
- IPO closes: 28-Mar-2013
- Price band: Rs 130 to Rs 135 per share
- Face value: Rs 10
- Minimum bid: 1,000 shares and in multiples of 1,000 shares thereon.
- Minimum investment: Rs 130,000
- Leader managers: IDBI Capital Market services Ltd
- Registrar: Karvy Computer Share Private Ltd
- Listing: NSE SME
- Prospectus: http://www.nseindia.com/emerge/sme_OPAL_DRHP.pdf
- Crisil Research has assigned Opal Luxury fundamental grade as 4/5 (Superior) which is a plus point.
Purpose of the IPO: The funds would be used for the following purposes.
- Investments in Moulds, tools and equipment, and Indigenization of the designs for expansion of the existing manufacturing facility
- Enhancement of Company’s brand through advertising and other brand building activities
- General Corporate Purposes
Revenues of the company have grown from Rs 391 lakhs (FY 2007-08) to Rs 1730 lakhs (FY 2011-12). Though revenue have grown 2% only in FY 2011-12 compared to previous financial year, in the last 6 months ended Sep-12, the revenue growth is good. If we annualize the current year revenues, the growth in revenue for this year (FY 2012-13) would be around 11% compared to previous financial year (FY 2011-12).
Profits have grown from Rs 42.16 Lakhs (FY 2007-08) to Rs 288.72 Lakhs (FY 2011-12). The profit margin is 14.22% in FY 2011-12. The average earnings per share (EPS) for the last 3 fiscal years are Rs 27.85. However EPS for 6 months ending Sep-12 is Rs 10.37 which is low compared to average of previous 3 fiscal years which is a concern.
Recommendation / Investment strategy:
- Financial performance wise company is doing well. Crisil has assigned this IPO rating as 4/5 (Superior) which is a positive sign.
- Post the IPO, on a profit of Rs 1.37 Crores for 6 months ended Sep-12, the P/E ratio would be 16. There are no listed peers to compare this company's performance.
- Though it looks a higher price, one can do moderate investment in this IPO. Post listing on NSE SME, if it such stock is available at lower levels, one can accumulate for medium term investment.
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Opal Luxury Time Products IPO