CKP Leisure Limited IPO Review

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CKP Leisure IPO

6.3

Company Background

6.5/10

Price Band

6.0/10

Company Financials

6.0/10

Industry Situation

7.5/10

Reliability

5.5/10

Pros

  • Positive P&Ls
  • Funding for Business Expansion

Cons

  • Early for a Public Issue
  • Limited Assets
IPO NameCKP Leisure Limited IPOCKP Leisure Limited
Opening Date21st February, 2018
Shares Issue Size38,48,00038,48,000
Face Value₹10
IPO Price Band₹30
Bid Lot4000
Total Bid Amount₹1,20,000
Listing AtNSE Emerge SME Platform
Retail Allocation50%
Estimated IPO Size₹11.544 Crore
Day#No. of Shares SubscribedShares Subscription %age
Day 1NANA
Day 2NANA
Day 3NANA

CKP Leisure Limited – Background

CKP Leisure limited IPO is coming from a business domain that does not really see much of public funding outings. CKP Leisure Limited (or previously known as Percept Media Work Private Limited) is a hospitality-based business and was incorporated recently on 23rd of July 2013 and has seen multiple changes in its brand name in these 5 years or so since its establishment.

Apart from the names mentioned above, it was also branded as Dionysus Club Private Limited for a couple of months in 2016.

Anyway, coming back to the business model CKP Leisure limited runs multiple hospitality and leisure properties such as night-clubs, discotheques, fine dining restaurants, banquet halls etc with a presence primarily in Mumbai.

The business currently runs a nightclub named ‘Club Sirkus’ at Hotel Sahara close to the Mumbai Domestic Airport. This 5,000 Square feet property has been positioned for a client base that earns pretty well and boasts reasonable disposable income. The club opens for few days a week and the entry starts at 10 pm late evening until the wee hours of the morning next day. In case you are looking to visit the club, there is a strict dress code that needs to be followed.

As far as the business model of CKP Leisure is concerned, it earns from various revenue streams including:

  • Entry Charge
  • Private parties
  • Table Sales
  • Sale of food and beverage
  • Sale of Liquor

Apart from owning Club Sirkus, CKP Leisure has made investments in businesses in the same domain. For instance, it made an investment in Athena Restaurant and Bar in 2015 and with that investment, it took over the business operations of a nightclub ‘Saizen’ and ‘Club Athena’. The names of these clubs were changed to “जा: pani” and ‘Club Alibii’ respectively.

CKP Leisure Limited is now looking to raise funds through an SME IPO worth ₹11.544 Crore with specific objectives in place (more on that later in the review). In the rest of the review, we will talk about some specific details related to this CKP Leisure Limited IPO before providing you with an objective recommendation.

The IPO is being managed by Aryaman Financial Services limited.

CKP Leisure Limited – Management

Before we look at some of the data points related to this CKP Leisure IPO, it is equally important to know the people behind the business where you might be investing your hard earned money. Let’s quickly check the professional backgrounds of the business promoters in this case:

Mr Prafulla Bhat, Promoter

A Chartered Account by education and profession, Mr Prafulla Bhat holds the position of Chairman and Non-Executive Director at CKP Leisure Limited. He started his professional career by setting up a mid-sized proprietorship firm named as Prafulla Bhat & Associates, which is still an active CA firm catering to around 200 clients.

His primary responsibility at CKP Leisure limited is to introduce efficient financial services models that bring effective revenue and cost-saving channels.

Mr Chanakya Dhanda, Promoter

A business graduate by education and an entrepreneur by profession, Mr Chanakya Dhanda is claimed to be an experienced professional across multiple industries including Hospitality, Electronics, Textile etc.

He also was involved in setting up a software services company Easy Mobile India Private Limited sometime back.

In a sense, there seems to be a synergy of experience and youth by looking at the profiles of the promoters of the company at least.

CKP Leisure Limited IPO Data Points

Let’s talk about some numbers here.

This CKP Leisure Limited IPO will be open for bidding starting 21st of February and will stay open until 23rd February, 2018. Thus, in case you are looking to invest in this IPO, you may choose to apply for IPO in any of these 3 days.

The face value of the SME IPO share is placed at ₹10 while the issue price at ₹30. The overall public issue comprises of 38,48,000 Equity Shares with a segregation of a Fresh issue of 12,48,000 Equity shares and Offer for Sale of 26,00,000 Equity Shares.

In case you choose to go ahead with this IPO application, the minimum bid will have to be of 4000 equity shares making the minimum bid price of ₹1,20,000.

You have the choice to apply more keeping the lot size at 4000 Equity shares each.

CKP Leisure Limited Financial Performance

Let’s look at the way business has grown in the recent past:

 

It can be clearly observed that the business, although started in 2013, has seen a sizable revenue and corresponding profit in the last 3 years or so.

Yes, numbers are consistent, but the overall duration where a business can prove itself on a consistent basis is too short to conclude objectively.

CKP Leisure Limited IPO Objective

The primary reason for this SME IPO issue is that the business is looking to set up and operate a banquet hall based out of Nashik, Maharashtra. This 14.5k square feet mall-based property was recently leased to CKP Leisure Limited and now, the business looks to run operations and cater a guest capacity of 500 at any given point in time.

Here are the detailed objectives of this IPO from CKP Leisure Limited (remember the fresh issue is worth ₹3.74 Crore):

  • Setting up the Nashik based banquet hall – ₹2.98 Crore
  • General Corporate Purposes – ₹0.53 Crore
  • Expenses related to this offer issuance – ₹0.24 Crore

Thus, it is pretty clear the funding is required for business expansion in other geographies apart from Mumbai.

Now, the thing with restaurants or hospitality based businesses is that there is, invariably, a luck factor involved. The restaurant, cafe shop, fast food store whatever you open will always have a buzz factor involved.

If you get it, your business kills!

If you don’t, your business is killed!

CKP Leisure Limited IPO Events

Let’s quickly look at some of the important dates that you must be aware of:

EventDate
IPO Open Date 21st February, 2018
IPO Close Date23rd February, 2018
Finalization of Basis of Allotment28th February, 2018
Initiation of Refund1st March, 2018
Credit of Shares to Demat Accounts5th March, 2018
Listing on Exchange6th March, 2018

 

To make it simple, it basically means that the IPO is open for bidding for 3 days from 21st Feb to 23rd Feb 2018.

You will know whether you were allocated any shares lot by 28th Feb. In case you were, shares will be credited to your demat account by 5th March. Otherwise, your bidding amount will be unblocked (in case you used ASBA for IPO) or you will get your money back to your trading account by 1st March itself.

The stock will start its trading journey in the stock market from 6th March 2018.

CKP Leisure Limited Contact Information

In case you are looking to get in touch with the business for specific details or any understanding, you can use the following contact details.

Address:

CKP Leisure Limited
Makwana Rd, Gamdevi,
Marol, Andheri East,
Mumbai, Maharashtra 400059
Phone: +91 22 65014100
Email: letsclub@sirkus.com

CKP Leisure Limited IPO – Our Recommendation

As mentioned in the financial performance section above, the business CKP Leisure Limited is still new and it will take some time before it can be called as a mature investing entity.

Furthermore, the objective of the IPO is to set up an entirely new banquet hall and that too in a city where the brand has not much of a visibility. Thus, not only there will be money needed for setting up operations, a lot of finance will be required to throw out the word on a consistent basis (in form of marketing and advertising).

With a PAT of around 1 Crore+ coming from its existing Mumbai based business, CKP Leisure does not have much of resources at disposal apart from the funding it gets through this SME IPO.

In other words, yes – it is a glamorized and premium business but probably its way to early for the business to raise a public funding. For now, our recommendation is to let this one go and keep your eye on other upcoming IPO opportunities.

In case you are looking to invest in this IPO, feel free to get a callback to understand the steps ahead:

Open Free Demat Account
Enter basic details here and a Callback will be arranged for You!

 


* The recommendation is just our viewpoint and you are advised to check with your financial advisory and/or stockbroker before investing any money in this IPO. A Digital Blogger bears no responsibility in such investments and the corresponding profits/losses.

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