This post on Prataap Snacks Limited IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Prataap Snacks Limited IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Prataap Snacks Limited IPO or not.
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Prataap Snacks Limited IPO: Grey Market Premium etc.
21/09/17 Grey Market Premium Rs. 150-200 , Kostak (Application rate) – Rs. 300-400
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Complete Anchor List
Prataap Snacks Limited, 15,28,789 equity shares have been subscribed today by 15 AIs at Rs. 938/- per equity share. These include Goldman Sachs, HDFC MF, Sbi MF, ICICI MF, KOTAK MF,Birla Sunlife MF, DSP BlackRock MF, UTI MF, Sundaram MF, IDFC MF, BNP Paribas MF, Small cap World fund, Fidelity funds
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Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Prataap Snacks IPO .
Angel Broking: “At 202x of its FY17 earnings, the issue is richly valued at upper end of its price band i.e. 938. Ignoring its lower profitability in FY17 and valuating the issue on FY16 EPS still yields a high P/E of 73.0x. FMCG companies commanding such high P/Es have a very strong profitability and returns profile such as Britannia (which is not an exact peer due to size and product portfolio). Its peer in exactly same industry i.e. DFM Foods , also has good margins (10% in FY17) and handsome return profile (~20%). For Prataap to justify this high valuation, remarkable improvement in profitability is required which may come at the cost of lower growth. Considering this we rate Prataap Snacks as Neutral.”
Prabhudas Lilladher: “ PSL has shown 27.5% sales CAGR in the past five years in a large and growing category, which instill confidence in its ability to drive growth. However, volatility in margins and limited pricing power at Rs 5 price point (80% of sales) are the key risks for investment. At the current margin profile and earnings, he company is being offered at expensive valuations which leave little scope for appreciation in the near term.”
Capital Market: ” Score 45/100,At higher price band of Rs 938, the diluted equity share capital of the company works out to Rs 11.73 crore of face value of Rs 5. EPS for FY 2017 works out at Rs 4.2. The P/E on FY 2017 diluted EPS works out to 222.4 while on FY 2016 diluted EPS of Rs 11.7, P/E works out to 80.4. The company is present in fast growing and high potential Indian snacks market which has strong potential of growth. Increase sale of larger SKU’s, deeper penetration in existing market and further introduction of products in newer geographies will drive future earnings. “
Hem Securities: “Co is bringing the issue at price band of Rs 930-938/share on post issue FY17 eps of Rs 4.22 at p/e multiple more than 200.Although co has diverse product portfolio with pan India distribution net-work but looking after valuation, issue looks overpriced .Hence,we recommend “Long term Susbcribe” on issue .”
SMC : “Rating 2/5 Considering the P/E valuation on the upper end of the price band of Rs. 938, the stock is priced at preissue P/E of 202.15x on its FY17 EPS of Rs. 4.64. Post issue, the stock is priced at a P/E of 222.37 x on its EPS of Rs. 4.22. Looking at the P/B ratio at Rs. 938 the stock is priced at P/B ratio of 8.39x on the pre issue book value of Rs.111.79 and on the post issue book value of Rs. 221.84 the P/B comes out to 4.23x. On the lower end of the price band of Rs.930 the stock is priced at pre issue P/E of 200.43x on its FY17 EPS of Rs. 4.64.Post issue, the stock is priced at a P/E of 220.47x on its EPS of Rs. 4.22. Looking at the P/B ratio at Rs. 930, the stock is priced at P/B ratio of 8.32x on the pre issue book value of Rs. 111.79 and on the post issue book value of Rs. 221.84, the P/B comes out to 4.19x. “
SP Tulsiyan website: “While company’s topline growth is credible, not much can be said for its margins. For investors, it will be prudent to wait for actual quarterly numbers to unfold before justifying such premium multiples. In addition to this, somber mood of the primary markets in the recent past does not aid either. On inconsistent and wafer-thin margins coupled with aggressive issue pricing, the Prataap Snacks Limted IPO can be given a miss.”
Hem Securities: “t price band of Rs 250-257 ,co is bringing the issue at p/e multiple of around 29 on FY17 Eps. Although co’s business model looks quite attractive but looking after valuation , issue looks expensive at current level. Hence we recommend “Subscribe” on issue for long term.”