Monday, March 20, 2017

SHANKARA BUILDING PRODUCTS IPO


Bangalore based Shankara Building Products IPO  opens for subscription from 22nd March to 24th March. 
The issue price band is Rs.440-460 (FV10). 
Bidding can be done in multiples of 32 shares. 
Listing on both BSE & NSE.
The issue objective is to primarily offer of sale by one of the promoters, Fairwinds Private Equity (formerly known as Reliance Equity Advisors, it is advisory arm of RELIANCE ADA GROUP)  and to repayment of loans.
Fairwinds is offering for sale its 25% stake and fresh issue constitutes of Rs.50 crores.






COMPANY DETAILS : 
Under the tradename SHAKARA BUILDPRO, the company caters to Home Improvement and Building products with its over 103 stores across India, mostly in South India as of now.
It offers Steel, TMT bars, Tiles, Cement, Flooring, Plumbing Materials, etc in its showrooms.

The focus is on Middle and Upper Middle Class.


THE GOOD, THE BAD AND THE UGLY!!










Good Points : 
1. The company was named among the TOP 200 BEST UNLISTED companies in India by Business Standard.
2. The company has pretty decent numbers consistently and has posted a profit of Rs.65 crores for March 2016.
3. The company has no direct competitor
4. Prescence across Value chain.
5. Has good variety of Building products including 3rd party brands like SINTEX, APL APOLLO.
6. EPS has shown a growing trend....
2014.......2015.......2016.......2017(9m)

13.13.......10.32.......18.9........19




Not so Good Points: 
1. The company will not get any benefit from the Offer of Sale by its PE investor FAIRWINDS.
2. The PAT growth rate is 7.94% compared to Revenue growth of 8.38% which indicates fall in margins and increased competition.
3. Even the company's promoter & MD Sukumar Srinivas is offering more than 8 lakh shares through this issue!!


WHAT OTHERS SAY : 


DSIJ (Dalal Street Investment Journal) says "Considering slower growth rate and higher valuation, we recommend AVOID".

MYINVESTMENTIDEAS  says " The profit percentage is gradually decreasing from 2% in 2012-13 to 0.6% in 2016 March. Considering that the Price Issue PE works out to 97.6, the issue looks highly priced.

APPLYIPO.COM says "Grey Market Premium started around Rs.95 per equity share and is now showing upward movement and is now quoting between Rs.155-160".

CHITTORGARH.COM has given the IPO a rating of 4 out of 5.

DILIP DAVDA says "Price apprears reasonable. Investors may consider investment for Medium to Long Term"

CHANAKYA ni pothi considers this company as " D-MART of Construction sector"



DISCLAIMER : 


I do not have any interest in this IPO. 
I am giving the good and not so good featurs only to create awareness. 
All the information published here is from various sources and cant be relied as 100% accurate. 
Request you to consult your Financial Advisor before considering an investment in this IPO. 
I may or may not invest in this IPO. 



Also visit http:/http://goodinsuranceadvisor.blogspot.in/

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