VKJ Infradevelopers IPO – Avoid
One more Infra company has come to IPO in this week after Silverpoint Infra IPO. VKJ Infradevelopers has come up for public issue of 51 Lakh shares @ Rs 25 each aggregating for Rs 12.75 Crores. This BSE SME Company is 3 years old company. Should you invest in VKJ Infradevelopers IPO?
About VKJ Infradevelopers IPO
Delhi based VKJ Infradevelopers is one of the leading Indian company which is into trading in construction materials, land development, civil constructions, site development, land filling, fencing walls etc.
Issue details:
- IPO opens: 12-Aug-2013
- IPO closes: 14-Aug-2013
- Face value: Rs 10
- Issue price: Rs 25
- Minimum bid: 6,000 shares and in multiples of 6,000 shares thereon
- Minimum investment: Rs 125,000
- Lead managers: Inventure Merchant Banker Services Private Limited
- Listing: BSE SME
- Prospectus: http://www.bseindia.com/downloads/ipo/201378152013VKJ%20Infradevelopers%20Limited%20-%20Draft%20Prospectus.pdf
Also read: 10 Tips for IPO Investments
Purpose of the IPO:
The funds would be used for the following purposes.
- To meet the funds required for ongoing and forth coming projects.
- General corporate purposes.
Company financials
- Company revenues have grown from Rs 91 Lakhs in FY2011 to Rs 260 Lakhs in FY2013 (11 months ended Feb-2013).
- Coming to profits, company has posted 1.94% margins in FY2011 and -1.48% in FY2013 (11 months ended Feb-2013)
Reasons to invest in VKJ Infradevelopers Ltd
Nil
Reasons not to invest in VKJ Infradevelopers Ltd
Company is not doing any hi-tech infrastructure business. It is just doing trading of construction materials, site development etc.
Company profits for year ended Mar-2011 is Rs 1.76 Lakhs and for 11 months ended Feb-13 is Rs 3.86 Lakhs. Thought company revenues have grown to Rs 260 Lakhs for 11 months ended Feb-2013, it has generated just Rs 3.86 Lakhs for this period.
Recommendation / Investment strategy:
Average EPS for the last 3 years is Rs 4.36. EPS for 11 months ended is Rs 0.07 (Yes what you heard is right; it is just 7 Paisa per share). The minimum investment required is Rs 1.25 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 stay away from this IPO.
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Suresh
VKJ Infradevelopers IPO
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