Kushal Tradelink was Ahmedabad based company integrated in 2000; The Company claims to encompass a client base of over six hundred customers, making it a major player within the Paper and Paper Products market within Gujarat. Kushal Tradelink reportedly maneuver as an intermediary in the paper product supply chain whereby it purchases materials such as kraft paper, duplex board, etc. commencing individual paper mills and supplies the same to customers in the packaging section. According to the present document, KTL has 3 godowns located in different regions of Ahmedabad, Gujrat.
In addition stocking facilities, these godowns allegedly have certain processing facilities such as sheet-cutting, rewinding, bailing, reel to sheet making etc. Kushal Tradelink is now intends to increase its grip in Gujarat besides entering into other states. It put forward to set up a new office facility at Ambawadi in Gujarat as a part of its development plans. The Kushal Tradelink Limited group consists of Kushal Infrastructure and Ashapura Paper Mills.
The Promoters of Kushal Tradelink are Mr. Sandeep Agarwal and Mr. Mahendra Agarwal.
Objects of the Issue:
- Purchase and set up Corporate House at a cost of Rs 10.01 cr which includes land cost Rs 6.03 cr.
- Long-term working capital requirement of Rs. 15.75 Cr
- General corporate purposes of Rs. 1.09 Cr
- To Meet the Issue Expenses
ISSUE DEAILS:
- Issue Open: 14 August 2013 – 21 August 2013
- Issue Type: Fixed Price Issue IPO
- Issue Size: 7,928,000 Equity Shares of Rs. 10
- Issue Size: Rs. 27.75 Crore
- Face Value: Rs. 10 Per Equity Share
- Issue Price: Rs. 35 Per Equity Share
- Market Lot: 4000 Shares
- Market Quantity: 4000 Shares
- Listing At: SME platform of BSE
- Lead Managers: Aryaman Financial
- Market Maker: Aryaman Broking
- Registrar: Bigshare Services
COMPANY FINACIALS:
Kushal Tradelink Limited posted average Earnings per Share of Rs. 1.77 for last 3 fiscals. For the year 2012-13 Kushal Tradelink ltd. earned net profit of Rs. 4.09 crore on a turnover of Rs. 246.10 crore and if we trait this earnings on expanded equity of Rs. 23.73 crore post this issue it amounts to an Earnings Per Share of Rs. 1.72 and on this basis the asking price is at a P/E of 20+ and on the Net Asset Value of Rs. 13.23 as on 31.3.13, it is at a P/BV of 2.65 and thus is an classy offer. Its trading business has thin fringe which may lessen going forward as the direct supply from paper manufacturing will give strong competition. In April 2009 it issued bonus shares in the ratio of 11 for 1 and in August 2011 in the ratio of 8 for 10 and thus its equity rose to Rs. 15.80 crore before IPO. This will further rise to Rs. 23.73 post issue. Visit Profit Krishna.
CONCLUSION:
The fundamentals of Kushal Tradelinks are certainly doing not exude optimism. Despite the fact that the main object of the IPO is to situate up a corporate office, they have not hitherto identified the exact property or land proposed to be acquired from the Issue proceed. Planned things of the issue for which funds are being raised have not been assessing via any bank or financial institution. There could be conflicts of interest as closely held group entities too have similar line of business and merchant banker’s front; it has poor track record and credibility in the market. Since 2010-11, it has brought seven IPOs which have poor performance track record and these reasons investors should AVOID this issue.