Silverpoint Infratech Ltd IPO
Do you want to make money from market? Float a small company and go for IPO. If you do not believe me, read on. Silverpoint Infratech has come up with an IPO for Rs 12 Crore. This company is making a revenue of Rs 230 Crores (11 months ended Feb-2013), but profit of less than Rs 50 Lakhs. I do not understand how SEBI is allowing such companies to come to public for IPO. Why you should avoid Silverpoint Infratech IPO?
About Silverpoint Infra Ltd
West Bengal based Silverpoint Infratech is not doing any hi-tech infrastructure. It is currently engaged in providing land development, construction services, civil and structural constructions and infrastructure sector projects. Shivmangal communication Private Limited and Saffron Vinmay Private Ltd sell 80 Lakh of their share holdings in the company to general public @ Rs 15 each. Means, the offer proceedings would go to these shareholders and company would not get any benefit from this issue.
Also read: IPO Performance from Jan-13 to Jun-13
- IPO opens: 12-Aug-2013
- IPO closes: 14-Aug-2013
- Face value: Rs 10
- Issue price: Rs 15
- Minimum bid: 8,000 shares and in multiples of 8,000 shares thereon
- Maximum shares for Retail investors: 8,000 shares
- Minimum investment: Rs 120,000
- Lead managers: Inventure Merchant Banker
- Listing: BSE SME
- Prospectus: http://www.moneycontrol.com/news_html_files/pdffiles/aug2013/Silverpoint_Infratech.pdf
Purpose of the IPO: The funds would be used for the following purposes.
- Benefits of getting listed on stock exchanges
- Carry out the sale of 80 lakh shares selling by shareholders.
- Company revenues have grown from Rs 8.47 Crores in FY2008 to Rs 230.75 Crores in FY2013 (11 months ended Feb-2013).
- Coming to profits, company has posted 0.46% margins in FY2008 and 0.21% in FY2013 (11 months ended Feb-2013)
Reasons to invest in Silverpoint Infratech IPO
Reasons not to invest in Silverpoint Infratech IPO
- Company is not doing any hi-tech infrastructure business. It is just doing land development and small construction projects.
- If you earn Rs 100 and save Rs 5, it is ok. But if you earn Rs 10,000 and still earn Rs 5, then you should ask yourself your objectives of earning money. There is no purpose in earning money if you cannot save. This company has moved its revenues to Rs 230 Crores in the last 5 years, but the profit is less than Rs 50 Lakhs. Means investors would not benefit anything whether it earns Rs 8 Crores or Rs 230 Crores.
You may also like: IPO Performance in 2012 – How investors made money of 50% profits?
Recommendation / Investment strategy: Average EPS for the last 3 years is Rs 0.17. The minimum investment required is Rs 1.2 lakhs. The SME IPO’s listed are trading with very low volume and the liquidity has been a problem. There is nothing positive to invest in this IPO. Considering all these negative points, my suggestion to investors is to be little cautious before going for such IPO.
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Silverpoint Infratech Ltd IPO
Hi suresh,, I am actually planning to Invest good amount into shares.Can you suggest me best share options which will give me good returns in short term..
Vamsi, As of now my analysis is restricted to all investment options minus stocks. Soon, we would introduce this feature also.
Dear Suresh Ji,
i have been read your every post, all posts are very nice for that i want to say thank you to you.
and request you, if you suggest some shares these days for buy for a short term ( 3 to 6 months) then it will be very better for me.
Thanks and Regards,
Vidhaydhar, I had plans to start analysing some of the stocks and would start doing in next 2-3 weeks.
With such poor fundamentals it is a wonder how SEBI allows these companies to launch IPO's ? is there no criteria as such ? Does Silverpoint meet these criteria ?
Cailisto, Even I was wondering how SEBI allows such companies. However what I know is they go by standard definitions and not sure why such low profitable companies are not stopped from their end.
That's a good review. As you said if there is no profit for a huge amount what is invested, how can an investor will get benifit after investing lakhs…
Thanks Kishore for your feedback.