Navigant Corporate Advisors IPO – Should you Invest?
Navigant Corporate Advisors IPO would open for subscription on 30th November, 2015. Navigant Corporate advisors is engaged in financial services in India. Its revenues grown by 10 times in last 3 years. It earned profits over 25% in the last financial year. What are positive factors of Navigant Corporate Advisors Ltd IPO? What are the hidden factors in Navigant Corporate Advisors IPO? Should you invest in such BSE SME IPO?
About Navigant Corporate Advisors Limited
Navigant Corporate Advisors is engaged in the business of financial services like: Advisory in IPO, Listing on Stock Exchanges, Mergers & Acquisitions, Debt Syndications, Takeovers, Valuation Reports, Cross Border Structures, Tax Management, Strategic & General Corporate Advice, Business Modeling, etc.
Issue details of Navigant Corporate Advisors IPO
- IPO opens: 30-Nov-2015
- IPO closes: 7-Dec-2015
- Face Value: Rs 10 per share
- Issue price: Rs 14 per share
- Minimum Shares: 10,000 shares and in multiples of 10,000 shares there-off
- Minimum amount: Rs 140,000
- Issue size: Rs 11.9 Crores
- Lead Managers: First Overseas Capital Ltd
- Listing: BSE SME
- Download Navigant Corporate Advisors Limited IPO Prospectus from SEBI Website at this link
Purpose of the IPO
Achieve the benefits of listing the Equity Shares on the Stock Exchanges, Enhance Visibility and brand name and provide liquidity to the existing shareholders, Creating a public trading market for the Equity shares of the company by listing them on BSE.
Company Financials (reinstated)
- Company generated revenue of Rs 8.31 Lakhs for the year ended Mar-13 and Rs 83.84 Lakhs for the year ended Mar-15. Company posted revenue of Rs 23.84 Lakhs for 3 months ended Jun-2015.
- Company posted a loss of Rs 1,000 for the year ended Mar-13 and a Profit of Rs 20.38 Lakhs for the year ended Mar-2015. It generated profit of Rs 7.60 Lakhs for 3 months ended Jun-15.
- Its EPS for FY 2015 is Rs 3.37 and last 3 years average EPS of Rs 1.93.
Reasons to invest Navigant Corporate Advisors IPO
- Good revenue growth in last 3 years. Its revenues increased by almost 10 times in last 3 years.
- It earned good profit of over 25% in last financial year. Earning such good profit in SME companies that came for IPO are very less.
Reasons not to invest in Navigant Corporate Advisors IPO
- Company posted loss in FY2013.
- They dependent on its management team for success whose loss could seriously impair the ability to continue to manage and expand business efficiently.
- Its operations are significantly located in the Mumbai region and failure to expand its operations may restrict its growth and adversely affect its business.
- Company inability to manage growth could disrupt its business and reduce its profitability.
- Major fraud, lapses of internal control or system failures could adversely impact the company’s business.
- They do not own the Registered Office of the Company.
- They have reported negative cash flows in the past.
- They have limited operating history and investors may not be able to analyse its past performances or future prospects.
- They have applied to Securities & Exchange Board of India for registration of the Company as Category I Merchant Bankers. Failure to obtain the registration may affect future prospectus and strategy of Company.
- Other risk factors (Internal and external) can be viewed in prospectus Page no. 10 onwards.
Recommendation / Investment strategy
- At a issue price of Rs 14 and EPS of FY2015 of Rs 3.37, P/E Ratio works out to be 4.1x. For last 3 years average EPS of Rs 1.93, P/E ratio works out to be 7.2x. Its competitors highest P/E Ratio is 242 and lowest is 2.2 and industry composite is 22.1. Hence, issue price seems to be reasonably priced.
- Navigant Corporate Advisors Limited revenues are growing fast in last 3 years. It generated good margins of over 25% in last financial year as well as in 3 months ended Jun-15. One should even consider risk factors indicated above. Considering various positive and negative factors, I would recommend investors to subscribe to this IPO.
Disclaimer: I do not have an interest in investing in this IPO. The idea of giving positive and negative factors to investors in this article is to create awareness and education about this IPO. One should NOT constitute this as investment advice to buy or not to buy. Please consult your investment advisor before you invest in such high risk investment options.
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Navigant Corporate Advisors IPO – Should you Invest