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Shankara Building Products IPO: Opt the issue for medium to long term - IndiaNotes.com
Shankara Building Products IPO: Opt the issue for medium to long term
SMC | Published: 22 Mar, 2017  | Source : IndiaNotes.com


  • Total Issue (Shares)     : Offer for sale 6,521,740
  • Total Issue (Shares)    : Fresh Issue 978,261
  • Net Offer to the Public: 7,500,001
  • Issue Size (Rs. Cr.)    : 330-345
  • Price Band (Rs.)        : 440-460
  • Offer Date                 : 22-Mar-17
  • Close Date               : 24-Mar-17
  • Face Value              : 10
  • Lot Size                  : 32


Valuation


Considering the P/E valuation on the upper end of the price band of Rs. 460, the stock is priced at pre issue P/E of 18.16x on its FY17 EPS of Rs. 25.33. Post issue, the stock is priced at a P/E of 18.97x on its EPS of Rs. 24.24. Looking at the P/B ratio at Rs. 460 the stock is priced at P/B ratio of 3.03x on the pre issue book value of Rs.151.87 and on the post issue book value of Rs. 171.12 the P/B comes out to 2.69x.On the lower end of the price band of Rs.440 the stock is priced at pre issue P/E of 17.37x on its FY17 EPS of Rs. 25.33.Post issue, the stock is priced at a P/E of 18.15 on its EPS of Rs. 24.24. Looking at the P/B ratio at Rs. 440, the stock is priced at P/B ratio of 2.90x on the pre issue book value of Rs. 151.87 and on the post issue book value of Rs. 171.12 , the P/B comes out to 2.57x.


Outlook


Company’s retail operations are strategically suited to benefit from growth in housing demand, large market for home improvement, and increasing customer involvement in home solution decisions which have created a need for organized speciality home improvement and building product store. Investors may opt the issue for medium to long term.


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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.