Unishire 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.
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
- 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.
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.
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.
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Unishire Urban Infra IPO