Keynote Capitals has come out with report on Gokul Refoils and Solvent's IPO. It has recommended investors to subscribe the issue with a medium term view.

The issue has opened for subscription with its initial public offering (IPO) of 7.2 million equity shares of face value Rs 10 each. The issue will close on May 13, 2008. The price band has been fixed at Rs 175 to Rs 195 per equity share.

Keynote's report on Gokul Refoils and Solvent's IPO:

GRSL was incorporated in 1992 and converted into public limited company in 1994. It is promoted by Mr. Balvantsinh Rajput, Mr. Kanubhai Thakkar, Mrs. Bhikhiben Rajput and Mrs. Manjulaben Thakkar who have 2 decades of experience in this industry. Gokul Refoils and Solvent Ltd. (GRSL) is an Ahmedabad-based oilseed processing, edible oil refining and vanaspati manufacturing company. GRSL is into processing of Mustard seed as well as Soyabean seed and refined oil for various seeds which it procures from domestic as well as export markets. It caters to the northern region markets in India as well as international markets such as US, Europe, South Asia, etc. Going forward; it plans to introduce new seeds for processing. Top line and bottom line grew @ CAGR of 46.5% and 44.1% respectively during FY04-07.

Valuation:

The pricing of the IPO - at 9.2xFY08E and 6.8xFY09E - is largely in line with that of peers Ruchi Soya which trades at 11.9xFY08, GAEL at 9.0xFY08 and K S Oils at 9.2xFY08E. We recommend subscribing with a medium term view.

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