Shankara Building Products Ltd (SBPL) is one of the leading organized retailers of home improvement and building products in India based on number of stores, operating under the trade name Shankara BuildPro. As on December 31, 2016, they operated 103 Shankara BuildPro stores spread across 9 states and 1 union territory in India. SBPL caters to a large customer base across various end-user segments in urban and semi-urban markets through its multi-channel sales approach, processing facilities, supply chain and logistics capabilities. SBPL serve home owners, professional customers (such as architects and contractors), and small enterprises, through their retail stores. Additionally, in the semi urban markets, they also cater to specific agricultural requirements of individual customers and small enterprises.

Issue Details

 

 

 

Objects of the issue

 

 

 

 

 

 

2)Repayment or pre-payment of loans of their Company;and

3) General corporate purposes

Issue Size Rs. 345.00 Cr 
Face value  

Rs. 10 Per Equity Share

Issue Price  

Rs. 440- 460 Per Share

Bid Lot  

32 Shares

Listing at  

NSE, BSE

Issue Opens:  

Mar 22, 2017 – Mar 24, 2017

 

 

QIB

 

50% of Net Issue Offer

NIB  

15% of Net Issue Offer

 

Retail 35% of Net Issue Offer

sankara building products ipoShankara Building Products Ltd Strengths:

  • Providing their customers a unique experience by offering a comprehensive range of home improvement and building products.
  • Strong vendor network and relationship built over two decades;
  • Robust back-end infrastructure ensuring efficient supply chain management.

sankara building products ipo

Shankara Building Products Ltd Key Highlights:

  • The company provides number of building products under one roof such as, structural steel, cement, TMT bars, hollow b locks, pipes and tubes, roofing solutions, welding accessories, primers, plumbing, tiles, solar heater, sanitary ware, water tanks, plywood, kitchen sinks,lighting and other allied products.
  • SBPL has generated total income of Rs 2036.58 Cr with profit of Rs 41.32 Cr in FY16 vs generated total income of Rs 1979.66 Cr with profit of Rs 22.57 Cr in FY15. The total revenue and profit for period ended December 2016 was Rs 1709.88 Cr and 41.54 Cr respectively.

Shankara Building Products Ltd Risk Factors:

  • There are various proceedings involving their Company and certain of their Subsidiaries, which if determined against them or them, may have an adverse effect on SBPL’s business.
  • They have had instances of non-compliance in the past, including in relation to regulatory filings to be made with the RoC and the RBI under applicable law.

Outlook:

SBPL is the leading retailers of home improvement and building products in India, operating under the trade name Shankara BuildPro. They carry reputed third party brands such as Johnson, Sintex, Uttam Galva, Uttam Value, Futura, APL Apollo, Astral Pipes and Alstone and their own brands such as Century Roof, Ganga and Loha at their retail stores.

During the nine months period ended December 31, 2016 and Fiscal 2016, their revenue from retail sales was Rs 715.71 Cr and Rs 807.75 cr, respectively, which contributed 41.86% and 39.68% of their total sales as of December 31, 2016 and Fiscal 2016, respectively. The revenue from retail sales in Fiscal 2016 represented a CAGR of 28.67% as compared to their revenue from retail sales in Fiscal 2012, being Rs 294.72 Cr.

On the performance front,we expect company to report EPS of Rs 22.75 in FY17E. At the asking price the PE multiple works out to be 20 plus.Which looks issue is priced reasonably.There is no any listed player available that is in similar industry.

Hence, we recommend investors to subscribe the issue for medium to long term investment purpose.


DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


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