is aries agro limited IPO is good value for money?
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no one knows until we have some financial data.
IPO is pretty much betting, just look at their 10Q, their business function, is the sector good where they belong, do they have a good market demand in their products currently?
look at those factors then decide. the price will go much higher if it looks like a great investment.
Aries Agro Ltd, a fertiliser manufacturing company, is making a public offer of 45 lakh equity shares to raise Rs 169.05 crore. The price-band is fixed at Rs 120-130 per share.
The promoter group, owned by the Mirchandani’s will make an equity dilution from 76.97 per cent to 50.33 per cent in public offering to raise the required capital.
The proceeds of the IPO will be used for setting up four new manufacturing units in Ahemdabad, Lucknow, Medak (Andhra Pradesh), and in Maharashtra. Each plant would be set up at a cost of Rs 2-2.5 crore. The company already has four existing manufacturing units.
In order to reach out to the farmers in remote areas, the company plans to invest in acquiring 100 trucks for a mobile marketing operation.
Mobile marketing will reduce the cost for the farmer and yet receive credit service from the distributor, said Mr Rahul Mirchandani, Executive Director of the company.
West Asia foray
The company will also acquire 75 per cent stake with an investment of Rs 7.5 crore in Golden Harvest Middle East, a trading company incorporated in West Asia.
“Today the import of raw material attracts 35 per cent plus duty. Post the investment in Golden Harvest we seek to make the fertiliser there and import the finished goods, which will then attract only 5 percent duty,” said Mr Mirchandani. The rest of the proceeds will be used to meet working capital, corporate expenses, issue and listing expenses.
The paid-up capital of the company prior to the issue is Rs 8.50 crore and it will be Rs 13 crore post issue.
While the face value is Rs 10, the issue opens on December 14 and closes on December 19. SREI Capital Market Ltd is the book running lead managers.
Financials
Sales increased from 59 crore to 77 crore and profit increased from 6.6 crore to 8.6 crore over year from 2006 march to 2007 march
My suggestion would be …dont put money in the ipo coz it doesnt seem to be a promising one.. i mean im not sure about how much its gonna make…
rather than blocking your money unnecessarily..u can do something with that till it gets listed…u can buy on the opening day…if the ipo turns out to be good…
This is my personal opinion….
Hope his info helps…
Good luck,
Happy Investing…!!!!!!!!!!!!!!!!!!
On the following link, you can read about the company details and in the blog find out what other people have to say about the issue.
http://www.chittorgarh.com/newportal/IPO_detail.asp?a=146
It will help you in deciding whether to apply for the IPO or not.