Anisha Implex SME IPO-Should you invest?
After I took a view from readers whether to continue or stop SME IPO analysis, based on readers feedback, I am continuing my SME IPO’s analysis. New Delhi based Anisha Implex IPO would open today, 3rd March, 2014. The issue price is Rs 10. It generated Rs 32.70 Crores of revenue in the last financial year. Upto this extent, all is well. But what are the hidden facts about this company? Should you buy or stay away from Anisha Implex IPO? Read our analysis.
About Anisha Implex Ltd
Anisha Impex Limited is engaged in the business of trading of fabrics. The company is a multi-product fabric trading company which includes a range of fabrics for bedding, windows dressing, decorative, pillows and accents, table linen, kitchen linen and other home furnishing fabrics.
Issue details of Anisha Implex IPO
- IPO opens: 3-Mar-2014
- IPO closes: 5-Mar-2014
- Face value: Rs 10 per share
- Issue price: Rs 10 per share
- Minimum bid: 10,000 shares
- Maximum bid by retail investors: 20,000 shares
- Minimum investment: Rs 100,000
- Maximum investment by retail investors: Rs 200,000
- Listing: BSE SME
- Download Anisha Implex IPO Prospectus from SEBI website at this link
Purpose of the IPO: The funds would be used for the following purposes.
- Long term working capital
- Meeting public issue expenses
- The company has posted revenue of Rs 3306.15 Lakhs for the year ended Mar-2009 and Rs 3,270.32 Lakhs for the year ended Mar-2013. First 9 months of this financial it made a revenue of Rs 2,156.91 Lakhs.
- The company has posted a profit of Rs 74,000 for the year ended Mar-09 Vs Rs 11.23 Lakhs for the year ended Mar-2013. First 9 months it made a profit of Rs 7.39 Lakhs.
Reasons to invest Anisha Implex IPO
Reasons not to invest in an Anisha Implex IPO
- Profits are very thin. It earned Rs 11 Lakhs in the last financial year (FY 2012-13) on a huge turnover of Rs 32.70 Crores. 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.
Recommendation / Investment strategy:
- Average EPS for the last 3 years is Rs 5.57. At issue price of Rs 10, this translates to a P/E ratio of 1.8. Based on last financial year 2012-13 EPS of Rs 5.03, P/E ratio works out to be 1.99. Its competitors like Nirav Commercial P/E ratio is 158.7 and an Amrapali Industries P/E ratio is 0.9. Compared to competitors, the issue price looks ok.
- Due to stable revenues (not much growth in last 5 years) and thin margins, which are the major factors, my suggestion to investors is to stay away from such SME IPO.
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Anisha Implex IPO