Hem Securities has come out with a report on Gokul Refoils and Solvent's IPO. It has recommended investors to subscribe the issue.

The issue will open for subscription on May 8, 2008 with its initial public offering (IPO) of 71,58,392 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.

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

Company is engaged in the business of oil refining, seed processing, and Solvent Extraction. Company has wide range of products, offering Mustard oil, Sunflower oil, Groundnut oil, Cottonseed oil, Palmolein oil, Vanaspati oil and Soyabean oil. At present Company has 680 TPD of seed processing, 600 TPD of Solvent Extraction, 1200 TPD of refining and 200 TPD of Vanaspati manufacturing capacities. It is also into commodity, derivatives trading. Apart from India, company’s products are exported to USA, European, South East Asian and other countries. Company’s units are located at Sidhpur (Gujarat), Anjar (Gandhidham) andNaviPardi (Surat).Company also has a co-generation power plant of 500 KWH at its Gandhidham unit. Company has two wholly owned subsidiaries Maurigo International Limited and Maurigo Pte Limited. Maurigo International limited, based in Mauritius, is engaged in commodity trade in Chicago Board of Trade (CBOT) and MDEX, KL, Malaysia. Maurigo Pte Limited, based in Singapore is engaged in the business of procuring raw materials and trading in Edible / non edible oils and de-oiled cake in Singapore.

Valuation:

The company at a price band of Rs 175-195 per share will have the p/e multiple of 7.16-7.98 at post issue eps of Rs 24.44 (Basis PAT annualized for 8 months ending Nov’07).The company being one of the leading players with over 15 years of experience in the edible oil industry has strong pan India distribution network. In addition to that the topline of company has grown at a CAGR of 49 % from FY04 to FY07 while the bottomline of the company has witnessed the CAGR of 20% from FY04 to FY07. We recommend the investor to “Subscribe” the issue for achieving listing gains.

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