Mitcon Consultancy IPO – You can invest

Mitcon Consultancy and Engineering Services IPOMitcon Consultancy IPO – You can invest

There are 3 more IPO’s lined-up this week. Pune based, Mitcon Consultancy and Engineering Services (MCES) IPO is going to hit the market today. MCES is going to list on NSE Emerge Index SME platform. Crisil has rated it as 4/5 IPO grade indicating superior fundamentals. In this article, I would help to analyze Mitcon Consultancy IPO and whether it would be good to invest or not?

About Mitcon Consultancy and Engineering Services IPO

Mitcon Consultancy is engaged in the business of providing consultancy in power generation viz. Wind, solar, small hydro, biomass, bagasse, coal and co-generation besides providing consultancy services in carbon credit, energy conservation, industrial infrastructure, environmental engineering, food processing, sugar, textiles, chemicals, market research etc.

Also read: Do you know that IPO investments has provided more than 50% returns in last 6 months.

Issue details of Mitcon Consultancy and Engineering Services IPO

  • IPO opens: 15-Oct-2013
  • IPO closes: 18-Oct-2013
  • Face value: Rs 10
  • Issue price: Rs 61
  • Minimum bid: 2,000 shares for retail investors and in multiples of 2,000 shares thereof
  • Minimum investment: Rs 122,000
  • Lead managers: IDBI Capital Market Services Ltd
  • Listing: NSE Emerge Index
  • Download Prospectus of Mitcon Consultancy IPO here

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

  • Acquisition of property for setting up new offices in Bangalore, Hyderabad, Chennai, New Delhi and Ahmedabad and environment testing laboratory in Bangalore and Ahmedabad;
  • Purchase of office equipment for new offices
  • Purchase of furniture and fixtures and carrying out interior designing for the new offices and the environment testing laboratory
  • Purchase of equipment for environment testing laboratory at Ahmedabad and Bangalore
  • General Corporate Purposes; and
  • To meet issue related expenses.

Company Financials

  • The company has posted revenue of Rs 4917.89 Lakhs for the year ended Mar-2011 and 4,819.58 Lakhs for the year ended Mar-2013.
  • The company has posted profits of Rs 1,090.02 Lakhs for the year ended Mar-2011 and 997.21 Lakhs for the year ended Mar-2013.

Mitcon Consultancy IPO - Financials

Reasons to invest Mitcon Consultancy and Engineering Services IPO

  • Crisil has given this IPO grade of 4/5 indicating superior fundamentals.
  • High margins of 20% for the year ended Mar-2013. All SME IPO’s which came earlier were earning 2% to 4% margins only.
  • Does business in diversified sectors.

Reasons not to invest in Mitcon Consultancy and Engineering Services IPO

  • No major growth in revenues in last 3 years.
  • Profits are in a declining trend. It posted 22% margins 3 years back and currently the margins are at 20.69%.
  • The IPO’s listed on NSE Emerge are yet to create confidence among investors.
  • The investment required is Rs 1.22 lakhs.

Also Read: Invest in income producing assets to have secured and beautiful life

Recommendation / Investment strategy:

Average EPS for the last 3 years is Rs 12.57. Post this issue, the EPS works out to Rs 8. At issue price of Rs 61, this translates to a P/E ratio of 7.5x. This looks expense for such SME IPO.

Crisil have rated it as 4/5 IPO grade indicating superior fundamentals.

Though there is no major growth in revenues in last 3 years, considering the strong Crisil rating about fundamentals and high margins one can subscribe to this IPO.  

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Suresh
Mitcon Consultancy and Engineering Services IPO

4 comments

  • muralidhar

    Dear Suresh,

    Can you  please enlighten w.r.t SBI Sr citizen scheme; whether it is on par with PO sr citizen savings schme.  The reason being, "online" activity possible with SBI while the same is absent with PO schemes.

    Thanks & regards

    murali

  • suneet

    Hi Suresh,

                 i cant find this IPO for subscription in ICICI direct. Is there any other way that i can invest online?

    Thanks

    Suneet

    • Suneet, Even I was wondering why these are not appearing in ICICIdirect.com. I would check them with customer care and would update. Parellely you can check and update in case you get the first hand info.

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