IPO Analysis:Bang Overseas Opens On Jan 28th

28 Jan

Posted by Shyam as IPO Watch

Well its time to watch another IPO on its way to hit the markets.This time around its from Bang Overseas Ltd,one of the leading manufacturers and exporters of mens wear.The company was set up in 1992 and they have been dealing mainly in mens wear since then.The issues has just started today on Jan 28th and will be closed on Jan 31st,2008.

Its coming with 35 lakh equity shares of R 10 each and the price band has been decided at Rs200-207.The proceeds from the IPO are planned to be utilized for setting retail outlets across India,setting up of a new manufacturing facility,ware housing and logistic facility, brand building etc.They have 12 outlets across India at this point of time.

It basically has two business segments -textile trading and garment manufacturing.It provides fabric under the brand name ‘Bodywaves’ to several companies like Arvind mills,Pantaloon,Provogue and Mudra.In the year 2002 it launched the ready to wear men’s garment under the brand ‘Thomas Scott’. Nowit plans to open 88 outlets across India.

The company however has a good financial track record with 70% CAGR in revenues in the last 4 years.And the net profit has grown more than 140% on a compounded basis reflecting similarity with industry competitors like Bombay Rayon .At the higher end of the price band the company will rake in Rs207 crores and at the lower end Rs 200 crores.

This issue considering the state of the markets are advised only to the long term investors .And CARE has given this issue a grade of 2 on a scale of 5 that means below average fundamentals.So only investors with 1-2 years horizon must take a chance with this issue.