The Gujarat based Euro Multivision Limited, proposes to issue 88 lakh equity shares in the price band of Rs70 -75. The object of the issue is to part finance the Photovoltaic Solar cell manufacturing unit. The issue is slated to open on Sep-22 and closes on September 24.
PROMOTERS: Promoted by Nenshi Shah and associates who are into manufacture of ceramic tiles under the brand name ‘EURO’. There are number of cases pending against the promoter/group in respect of IT/Customs litigations amounting to Rs 38.37 crores.
PROJECT/ PRODUCT: The Company proposes to set-up P V cell unit, which is a new segment for the promoters. The appraisal of the project has been done SBI in Dec 2007.It is almost two years from the date of the appraisal. Originally the trail production was to commence from Oct -2008.There is delay in project execution. The company is yet to obtain some statutory approvals from the appropriate authorities.
The project has been appraised by SBI which has extended term loan of Rs80.00 crore. However, the bank is not managing the Public issue and the bank is not even bankers to the issue.
FINANCIALS: The net profit margin from the exisisting activity – Compact Disc Recordables and Digital Versatile Disc Recordable has taken a severe beating in the year 2009 compared to the previous year. Raw materials consumption which was around 50% of sales in 2008 has gone beyond 60% in 2009. The group’s listed company - Euro Ceramics Limited whose book value is more than Rs 100.00 is languishing at less than half its book value in the stock exchanges.
IPO GRADING: The rating agency CARE has assigned Grade 3 indicating average fundamentals.
CONCLUSION: The promoters have no experience in the chosen line. There is delay in implementing the project. Financials are not sound. Promoters’ contribution to share capital is at par. The issue is very aggressively priced. Avoid subscription.
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