Anmol India IPO Review

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Anmol India IPO

7.5

Company Background

7.5/10

Price Band

7.0/10

Financial Health

8.0/10

Industry Situation

7.5/10

IPO Proceeds Usage

7.5/10

Pros

  • Optimal Capital Usage
  • Huge Distribution Network
  • Strong Financials
  • Operationally Efficient

Cons

  • Insurance Coverage not Sufficient
  • Foreign Exchange Fluctuations risk

Anmol India Limited Basic Details

 

Anmol India Limited Background

The company was originally founded as “Anmol India Private Limited” on April 3, 1998. It belongs to the coal import and supply industry. When the company was founded, it started as brick kiln industry and coal traders.

Over the period of years, it has grown in terms of the number of industries (caters to 12 different industries) and also is engaged in trading of both coal and pet coke. Its major clients are small and medium scale manufacturers and all the clients of the company are located in 100 different places in India.

The primary product of the company is USA Coal. The company also produces Indonesian Coal and Petroleum Coke and the kinds of coal in which the company trades are steam coal, petroleum coal or petcoke, coking coal, etc. The warehouse of the company is located at Budhewal, Ludhiana in Punjab.

Anmol India is now coming up with an IPO in the next few days for its listing on BSE SME. In this detailed review, we will see whether you should be investing in this one of letting it go!

Anmol India IPO Data Points

Anmol India IPO will open on (undisclosed) and close for subscription on (undisclosed).

The Anmol India IPO size will be of 31 lakh Equity shares and the face value of each share will be ₹10. The fixed price has been set at ₹(undisclosed) per share. The offer price band includes a premium of ₹(undisclosed) and is (undisclosed) times the face value of the equity shares.

The Anmol India IPO size is expected to be up to ₹(undisclosed) lakhs.

Out of the (undisclosed) lakh equity shares, 1.56 lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be reserved for market makers and the rest 29.44 lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be issued to the public.

Out of these (undisclosed) lakh shares, (undisclosed) lakh equity shares, aggregating up to ₹(undisclosed) lakhs will be allocated to retail investors for up to ₹(undisclosed) lakh. The market lot size is of (undisclosed) equity shares and the shares will be listed on the SME exchange of the Bombay Stock Exchange (BSE).

Pursuant to a resolution passed on July 23, 2018, the fresh issue has been authorised by the Board of Directors of the company and pursuant to a special resolution of the shareholders at the Extraordinary General Meeting held on August 20, 2018, the offer has been approved by them.

Anmol India Limited Financial Performance

The revenues of the company have been showing a growing trend over the last five years.

 

They grew from ₹7697.24 lakhs in fiscal 2014 to ₹25427.64 lakhs in the period ended February 28, 2018. The profit after tax has been growing consistently over the last 5 years.

In the last financial period, PAT more than doubled as compared to the last fiscal to ₹246.32 lakhs from ₹108.86 lakhs. The growth rate of PAT has been consistently high over the last few years.

The return on net worth of the company for the period ended February 28, 2018 (not annualised), financial year ended March 31, 2017, financial year ended March 31, 2016, and fiscal year ended March 31, 2015, is 22.05%, 12.5%, 10.85% and 8.42% respectively.

Anmol India IPO Objectives

The main objectives of the Anmol India IPO are as follows:

  • For part funding of the working capital requirements of the company
  • For meeting expenses related to the general corporate operations.
  • For meeting the expenses related to the IPO

Other than the above-mentioned objectives, the company will also benefit in terms of enhanced corporate image, brand name and increased visibility through Anmol India IPO.

Anmol India IPO Events

Anmol India Limited filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on August 29, 2018, for the 100% Fixed Price IPO. The offer will open on (undisclosed) and close on (undisclosed).

The finalisation of basis of allotment is expected to happen by (undisclosed) and the initiation of refunds is expected to start by (undisclosed). The transfer of shares to demat accounts is expected to start on (undisclosed)and the expected listing date will be (undisclosed).

Anmol India IPO Recommendation

Now, let us come to the analysis part where we analyse different aspects of the business of the company including its strengths and risks.

One of the biggest strengths of the company is its ability to procure a large amount of stock at low margin money due to which the company is able to achieve big economies of scale which in turn helps it to give more discounts to the customers.

25% of the company’s sales are from retail and small-scale customers who are relatively less price sensitive due to which the company is able to thrive in bear markets as well.

The company has its presence through an app called “Anmol Coal” which is the only application for USA Coal in India due to which the visibility of the company has increased a lot and resulted in over 2000 inquiries in 2017.

The company can also relocate stock easily and its huge network of sales and distribution makes it possible for the company to always supply fresh stock to their customers.

Also, the company is able to meet urgent demands by their clients through reallocation of stocks and a huge number of orders and network and connectivity.

The company collects data consistently from suppliers in their industry due to which it can find the opportunity of buying “Distress Cargo” at discounted prices. It is a big advantage for the company.

The company also exhibits operational efficiencies in terms of zero waiting time, size of a unit order, easy arrangement of transportation, etc. The company has formed good relationships with their suppliers as well as competitors for better procurement.

The company has shown a good record of financial performance over the last few years. Profits after taxes have consistently grown and there is healthy cash on the balance sheet of the company. The highly experienced management team and skilled workforce are an added advantage for Anmol India Limited.

Now, let us discuss some of the important risk factors for the company.

The company is involved in certain legal proceedings and any adverse ruling in them may pose a risk to the overall profitability of the company.

The company’s registered office, branch office, warehouse, etc. are on lease and not owned. Any termination of the agreements may result in adverse effects to the company.

The company is exposed to risks of failure in obtaining the registration of their logo due to which the brand building efforts would not be able to bring desired results.

The insurance coverage is not sufficient to cover against some operating risks which poses a risk for the operations and profitability of the company.

The company has shown negative cash flows in the past and if it continues to be so, it may affect the future profitability of the company because cash is required for working capital requirements, expansion purposes, payment of dividends, etc.

The company is exposed to a risk of foreign exchange fluctuations.

If the company is unable to maintain optimal levels of inventory, it could affect the results and profitability of the operations. Dependence on a few suppliers, on third-party transportation providers for supply, etc. are another risks the company is exposed to.

After analysing various aspects of the company, it can be said that investors may choose to subscribe to the Anmol India IPO for long-term gains. For short-term profits, this IPO might not be able to make you happy!

In case you are looking to invest in the Anmol India IPO or general stock market investments, let us assist you in taking the next steps forward:

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Anmol India Management Information

Currently, there are 9 Directors on the Board of Anmol India Limited.

Mr Vijay Kumar is the promoter and Managing Director of the company. He is matric passed and possesses an experience of more than 3 decades in the coal-related industry. His key responsibility is of looking after day to day operations of the company. He also helps the company with growth strategies and expansion plans.

Anmol India IPO Advisors Information

Navigant Corporate Advisors Limited is acting as Book Running Lead Manager to the issue. Bigshare Services Private Limited is acting as the Registrar for the Anmol India Limited IPO.

Summary
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Anmol India IPO
Overall Rating
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