AKM Lace & Embrotex Limited (AKM) was incorporated in 2009. The company is primarily a manufacturing and trading firm engaged in the business of various kinds of lace & embrotex goods, fabrics, clothing, apparel for personal and industrial use. AKM is coming up with its new issue. AKM Lace And Embrotex Ltd IPO review will delve into draft prospectus and present a review for investors.
About the Issue – The AKM Lace And Embrotex Ltd IPO review finds the following details of the IPO from the draft prospectus.
- Issue opens on – 20 September 2017
- Issue closes on – 22 September 2017
- Issue type – Fixed price issue IPO
- Issue price – Rs 25 per equity share
- Face value – Rs 10 per equity share
- Lot size – A minimum of 6000 equity shares and in multiples thereof
- Issue size – 1,902,000 nos. of equity shares aggregating up to Rs 4.76 crores
- Listing exchange – BSE SME
- Issue objectives – The net proceeds from this IPO will be used to – a) fulfill working capital requirements, b) meet issue related expenses and c) meet general corporate expenses.
About the Company – AKM follows two sales models. One is sales of traded goods like grey cloth, cotton fabric and the likes. The other model focuses on sales of manufactured items comprising of various kinds of lace based knitted fabric. The lions share of revenue is earned from traded goods.
Company Financials –
The AKM lace financial records show that except fiscal 17, the net profit is too small. But there has been a surprising leap in the top and bottom line in the current fiscal. Also, the issue is aggressively priced. If the current earning is attributed to fully diluted equity post this IPO, the P/E is 53.
Conclusion – Considering the financial data and pricing of the IPO, AKM Lace And Embrotex Ltd IPO review finds the IPO may not give expected the return on investment. Hence we prefer to not to recommend this IPO for investment.
Disclaimer – Views expressed in this review is an educated guess made on the basis of available data from open source expressed for the purpose of knowledge sharing. By no means, it should be taken as an investment advice or recommendation. Investor/ trader should invest money at their own risk.
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Categories: IPO Review