Accuracy Shipping Limited IPO Review, Should you Invest?

Accuracy Shipping Limited IPO, to be listed on NSE Emerge SME platform, has planned to raise INR 35.76 crore, which represents approximately 28% of the post issue paid up capital.

Pantomath Capital Advisors Pvt. Ltd. will manage the issue, and Link Intime India Pvt. Ltd. is the registrar to the issue. The company in May 2018, had undertaken pre-IPO placement of 6.8 lakh equity shares and raised INR 5.7 crore

Accuracy Shipping Limited (ASL), Gujarat based third party logistics solutions provider. Apart of to using hired fleets, the company has a fleet of more than 150 vehicles to meet inland transportation requirements.

The company is currently offering services through business partners in over more than 35 countries mainly from South Africa, Egypt, Turkey, Italy, Colombo, etc.

Accuracy Shipping Limited IPO Details

• Issue Open: Jun 11, 2018 – Jun 14, 2018
• Issue Type: Book Built Issue IPO
• Issue Size: 4,936,000 Equity Shares of Rs 10 aggregating up to Rs 35.76 Cr
• Face Value: Rs 10 Per Equity Share
• Issue Price: Rs 81 – Rs 84 Per Equity Share
• Market Lot: 1600 Shares
• Minimum Order Quantity: 1600 Shares
• Listing At: NSE SME
• Commencement of trading of the Equity Shares on the Stock Exchange: On or about Jun 22, 2018

Purpose of the issue

The objects of the IPO are:

• Part repayment/prepayment of some secured borrowings availed by the company as the loan payment required is INR 7.5 crore
• For the purchase of goods transportation vehicle which requires INR 5.17 crore
• Funding the working capital requirements of the Company, which is INR 15 crore
• For the general corporate purposes
• The Offer for Sale: The Company will not receive any proceeds from the Offer for Sale.

Should you invest in Accuracy Shipping IPO?

ASL’s turnover from FY 15 to 9 month FY 18 has grown at CAGR of 30%, from INR 161 crore in FY 15 to INR 266 crore in 9M FY 18. The company posted the net profit of INR 6.8 crore.

At INR 84 per share, the P/E stands at 14x. However, even the financials improved from few years, the company’s scale of operations is low.

Moreover, the company operates in a highly competitive sector, which is not currently performing well.  Additionally, the company considers Tiger Logistics, Allcargo Logistics, Sical Logistics and Total Transport Syst as its listed peers that are trading at a P/E of around 18, 16, 29 and 10 respectively (as on 05.06.18). These companies are not comparable with ASL in a strict manner.

The investors should avoid the Accuracy Shipping IPO and should wait for its listing. As on 15:45 hours on the opening day the issue has been subscribed by 0.08 times only.

 

Disclaimer: The content is provided for informational purposes only and it is not intended to be, and does not, constitute financial advice or any other advice. You should not rely on any content to make an investment decision.