Manaksia Limited

Price band: Rs 140-Rs 160
Issue opens: December 17, 2007
Issue closes: December 19, 2007.


Business

Manufacturing of
Metal products: (aluminium alloy ingots, rolled sheets/coils, galvanised steel sheets/coils colour coated metal sheets and sponge iron) : 72.5%

Packaging products: (ROPP caps, crown closures, plastic caps and metal containers) : 13.3%

Mosquito coils : 9% and engineering.
The percentage connote percentage contribution to turnover.

Manaksia operates from 15 manufacturing units in India and 3 units in Nigeria and Ghana.

Financials
FY 2006-2007
Income: Rs 834 crore
Net profit: Rs 92.06 crore


Here CAGR is a meaningless number because the company has done a lot of restructuring of its business.

Six months ended September 30, 2007:
Income: Rs 453 crore
Net profit: Rs 50.82 crore

Objective

Purchase equipment for aluminium and steel business
Prepay high cost term loans to the tune of Rs 60 crore
A big chunk of money is raised for some undecided purpose.

Outlook

Highly competitive business
Rising input costs
Presence in business segment where unorganised players are making price under cutting.
P/E of 10.57 to 12.08

For us this is a 'me too' counter. Investing in this wont fetch you anything great and not investing wont make you lose anything great.

Now let's understand few things well.
The company is already listed on Calcutta Stock Exchange. However it never planned to list on BSE or NSE to offer better trading platform for shareholders. Also note that the investment bankers are trying their level best to sell this public offer like an initial public offer. This is primarily due to the craze for IPOs among the investor, on which the investment banker wants to bank on.

But at the same time, the IPO grading is not done saying that this is not an IPO.
Corporate governance here may emerge as an issue. Better we avoid.

For those who understand momentum investing, there are some rumours that the company will come out with some announcement on the day of listing connoting some acquisition. The money raised for some undecided purpose will be used for this. However this is just for information purpose.