PG Electroplast IPO at Rs 210 sizzles on listing yesterday and hits upper circuit at Rs 493 today !….don’t get seduced by this Item Girl !….If in,get out before the Dance ends !…don’t be so enamoured as to consider marriage !
I’m really worried that the same old IPO Game is allowed to play out on our Stock Exchanges again and again and again !
Just yesterday PG Electroplast made an impressive listing debut and today hit and closed at upper circuit at Rs 493.95 on BSE with near 7.4 million shares being transacted…IPO was for 5.74 million shares
The Nature and Quantum of Bulk Deals confirmed my suspicion that this was an orchestrated IPO from Start and has yet to Finish!
The Company’s fundas do not hold up this sort of Market Price Acrobatics !
- PGEL was promoted by Promod Gupta in 2002 to manufacture plastic injection moulding.It later began Electronic Manufacturing Services for Original Equipment Manufacturers
- The Facilities are at four places in three States…two at Greater Noida in UP and one each at Roorkee in Uttrakhand and Ahmednagar in Maharashtra
- Post IPO Equity of FV Rs 10 Share is Rs 16.41 crs with 65% held by Promoters
- FY 11 PAT is Rs 17.90 crs giving an EPS of Rs 10.90 on Post Issue Equity
- P/E at IPO Pricing of Rs 210 is 19…while at Rs 493.95 it zooms to 45!
- The Company will find it difficult to grow and probably even sustain profitability as it has lost ISI certification + repeat orders for 14″ CTV from the Electronic Corporation of Tamil Nadu are not forthcoming.CTVs contributed 77% of FY 11 Sales of Rs 424 crs
- Over half of Sales are to related Parties and Debtors form over half of Sales
- IPO Proceeds of Rs 121 crs are earmarked for Phase II expansion at two units of Rs 14 crs and Rs 37 crs each and repaying loans of Rs 24 crs and Rs 15 crs for Long Term Working Cap + others
- Product Expansion Plans include manufacture of Components for refrigerators,washing machines and microwaves,automotive components,Water Purifiers and LCD TVs
- A Subsidiary Diamond Mattress Company Pvt Ltd manufactures and sells coir foam products and matteress
The IPO Allotments were Firm in all categories
|Sr. No.||Category||No. of Applications Received||No. of Equity Shares||No. of times subscribed|
|A||Retail Individual Bidders||4,188||32,25,510||1.6041|
|B||Non Institutional Bidders||28||15,72,990||1.8253|
|C||Qualified Institutional Bidders||6||28,22,550||0.9826|
My Experience tells me that PGEL will not hold up unless held up !
For me it’s a Price v/s Value Argument….and an orchestrated Informed or Insider Play
Exchanges and Regulators need to have a closer look at what’s happened here