Scarnose International Limited IPO_Know all the details
Scarnose International Limited was incorporated in year 2011. Scarnose is involved in the business of manufacturing and trading of agricultural commodities (basically belonging to textile and cotton sector) and they have come up with an IPO. Know all the details!
About the Company:
The company is being in the textile and cotton sector from past 10 years and are one of the trusted suppliers of cotton products.
The Company had firmed orders and even tied up with many mills and factories wherein the Company sales cotton bales to them. The Company had started manufacturing readymade ladies wear kurtis, salwar kameez, suits, etc on job work basis and supply to the local vendors.
About an IPO:
◇ Date of opening: 14th June, 22
◇ Date of closing: 17th June, 22
◇ Issue price: ₹55 per share
◇ Lot size: 2000 shares
◇ Allotment date: 22nd June, 22
◇ Listing date: 27th June, 22
◇ The minimum investment required to be done is 1,10,000rs.
◇ Mr. Shah Vimalkumar Mishrilal and Mr. Hitesh Loonia are the company promoters.
Financials:
◇ Earnings per share: ₹13.68
◇ Price/Earnings (P/E) Ratio: 3.66
◇ Return on Net worth (RoNW): 11.81%
◇ Net Asset value (NAV): ₹15.12 per share
Pros and Cons:
Pros:
◇ The company has shown a very good growth in the last 3 years. The revenue has gone from 12 Crores in FY20 to 95 Crores in FY22. However, if you see the Cash Flow from Operations in the last 3 years, it is negative, so be careful there.
◇ Lately they have entered into manufacturing of clothes which in future might increase the margins.
Cons:
◇ Though the company has reported a growing pattern for its top and bottom lines, its low margin raises concerns.
◇ Based on petty earnings, its IPO is priced greedily.
◇ A low post-IPO equity capital base indicates longer gestation for migration to the main board.
◇ They have ROE of just 3%.
◇ Asking P/E of 50x. We don't know on what basis they are asking this much valuation.
Review:
◇ There is no harm in ignoring this pricy issue. However do your own research too.
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Happy Learning and Investing!!
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