Latest in the BSE SME issues You Decor Ltd of Ahmedabad is listing their initial public offering and the issue will be listed at BSE SME exchange. This post will analyze the Yug Decor Ltd IPO Review and we will see whether investors have some earning opportunity if they invest in this issue.
Issue Date: May 18, 2017 – May 23, 2017
Offer Price: Rs. 26 per equity share
Minimum Application: 4000 equity shares
1) Working capital requirements.
2) General corporate expenses.
3) Issue expenses.
Yug Decor Ltd is owned by Shri Santosh Kumar Saraswat and Shri Chandresh Saraswat. The major shareholders are all from the same family at present. The company started its operation in 2003 and they are a manufacturer of different kind of adhesives like synthetic binders, syhthetic rubber adhesives, natural rubber adhesives and footwear adhesives under the brand name YUG-COL.
They also owns another brand name YUG-COAT where they manufactures surface coating distempers, cement primers, emulsions, wood finishes, red-oxides and wood primers.
It is clearly seen that the company has hige gap between the turnover and net profit which reveals that in-spite og good topline the company is not able to effectively manage its bottomline.
If we consider the latest earnings the price earning ratio of the company is hovering around 71 while the peer companies like CHD Chemicals Limited OR Yash Chemex Limited are quoting at a average PE ratio of 25. This makes the issue highly over-priced over its peer companies.
Yug Decor Ltd IPO Review: two factors are going against this issue. Its high price with respect to the peers and its inability to manage the bottomline. In general SME issues carry increased risk as they are traded in lot while this issue is riskier considering the aggressive pricing and high PE ratio. We recommend to avoid this IPO for safe investors.