BSE - SME IPO Onesource Techmedia

IPO Opens on 17th May & Closes on 21st May 2013; Offer price fixed at Rs. 14 per shares

The Chennai based company OneSource Tec media has come out with its initial public offering (IPO) of 20,00,000 equity shares of Rs 10/- each. The issue will open for subscription on May 17 and close on May 21, 2013. The company is mainly engaged in the business of distribution and trading of media contents in the form of audio and video cassettes, compact disks etc. It enter in to royalty agreements with various media houses which pave the way for marketing the contents of Hindi devotional, Bengali devotional, Bengali folk songs, Rajasthani Devotional, Rajasthani Folk, Bhojpuri Bhajan, Bhojpuri film, Animation movie - Jai Vigneswara, Tamil TV serials in India and abroad. It is also engaged in event management for corporate and small events. Guiness Corporate Advisors Pvt. Ltd. will be the lead manager and Purva Sharegistry (India) Private Limited will be the registrar to the issue. The equity shares offered through prospectus are proposed to be listed on the BSE SME Platform. The objects of the issue are to finance company business expansion plans and achieve the benefits of listing on the SME platform of BSE Ltd. The listing will enhance corporate image and brand name of the Company.

The other side of Onesource Techmedia

Company had issued bonus shares 2 for 1 to its promoters in nov. 2012

NAV as on 30-11-12 is Rs. 14.02 & offer price Rs. 14

Finanicial activities has been recorded negative & fundamentals are very poor

On the company performance front, it has clocked in an average EPS of Rs. 0.06 with inconsistency in performance. Its NAV as on 30.11.12 is Rs. 14.02. Thanks to issue of 47500 equity shares at Rs. 1000 per share in March 2011 that helped it announcing bonus in the ratio of 2 for 1 in November 2012. With this float, the total equity will rise to Rs. 6.49 crore and its earnings for the fiscal 2011-12 with an EPS of Rs. 0.07 on old equity will get further diluted and thus the asking price is much above 289 plus P/E and thus not worth considering.

BRLMS Performance : On merchant bankers front, it had so far mandate for 6 SME IPOs and all of them gave marginal gains on debut day, due to market making effort by it with thin volumes. Remarks: AVOID

 

 

Just Dial Limited

IPO Opens on 20th May & Closes on 22nd May

Price Band Fixed at Rs. 470 to 543 per Shares

The offer will see promoters and other investors shedding 17.49 million or 25.2 per cent of the paid up equity capital. Post issue the promoters will hold 33 per cent in the company and the issue does not involve the company issuing fresh shares, but selling existing ones. The city-based local search engine, backed by foreign investors like Sequoia Capital, Tiger Globe, and promoted by Mani family, will dilute their stakes trough offer for sale route, the promoter and managing director VSS Mani said. He also said the company has fixed a price band of Rs 470-543 per share, which carries a face value of Rs 10. The issue will remain open till May 22, adding it is offering a 10 per cent discount to retail investors who will also get the safety net option. When asked about the hefty premium, Mani said it is arrived at the i-bankers and indicates the strong fundamentals of the company, which had a cash balance of Rs 475 crore and a revenue of Rs 275 crore as of March 2012. The company plans to list on the BSE, NSE and MCX-SX. Citigroup and Morgan Stanley are the book-running lead managers to the issue.

 

Other side of Just Dial IPO

Promoters original share price zero, book value Rs57 and offer price Rs470 to 543

Before filling DRHP with SEBI, on April 10 the company issued bonus on ratio of 1:55

Between 2008 and 2012 the company top line growth

Stood at 52% and bottom line growth stood at 95% of CAGR

CRISIL rating of 5/5: 10% discount to retailers: Cash Reserve Rs500 crore

Against Googles P/E at 27 and Info Edges 37, Just Dials P/E is 60

P/BV is 81 and PE is very high, so the offer price can be considered too high

Promoters original share price is zero, while book value is at Rs57 and offer price has been fixed as Rs470 to 543.

The company issued bonus of 55 shares per share in April 2010 before filling DRHP with Sebi

The issue is Offer for Sale so the IPO proceedings will be given to savings shareholders and the company will not get any money.

The company has to face tough competition from its peers like Askme, Asklaila, Gefit and Sulekha.

The company had to pay Rs2 lakh penalty to RBI for violation of FEMA norms.

The retail investors have been allocated only 10% shares.

The company is shifting from phone to internet. However, small and midcap enterprises (SME) comprises majority of the companys income. However, majority of the customers are creating their own websites so the company income may dip.

Note :- Between 2008 and 2011, the company top line grew by 52% and bottom line grew by 95% on CAGR. It is not likely to repeat in future. In the first nine months of financial year 2012-13, the company registered net profit of Rs47.08 crore on income of Rs271.61 crore against net profit of Rs259.40 crore in 2012. However, the company net profit growth is consistent. The company clocked net profit growth of 150% in FY 2011, 49% in 49% and 75% in 2013. The company has cash reserve of Rs500 crore.

Recommendation: - The Company has declared cash discount of 10% for retail investors. However, it has cut down retail allocation from 35% to just 10%. CRISIL has given it strong fundamental rating of 5/5. The company has registered 36% sales growth and 21% net profit growth in first nine months of financial year 2013 compared to same period last year. It shows that company net profit is dipping and at offer price band the company market cap comes to Rs1820 crore. Taking into consideration, the company performance in first nine months of 2013, the annual profit growth of the company may be at Rs64 crore. Thus from estimated EPS of year 2013, the share is offered at PE of 60 from floor price to PE multiple of this issue and upper price band. There is no listed company in the sector. However, in the international market, Google Search Engine is being traded at P/E of 27 and in national market Info Edge is being traded at P/E of 37. Price to book value stands at 8.1. Thus the shares offer price is too aggressive and costly.

 

 

 

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