Nov 29, 2016 01:21 PM IST IST | Source: Moneycontrol.com

Subscribe to Sheela Foam IPO: HEM Securities

HEM Securities has come out with its report on Sheela Foam IPO. The research firm has recommended to "Subscribe " the IPO in its research report as on November 28 , 2016.

Hem securities in its research report on Sheela Foam  IPO.

Co is a leading manufacturer of mattresses in India marketed under its flagship brand “Sleepwell”. In addition, co manufacture other foam-based home comfort products targeted primarily at Indian retail consumers, as well as technical grades of polyurethane foam (“PU Foam”) for end use in a wide range of industries. As part of its international footprint, co manufacture PU Foam in Australia through its wholly owned subsidiary, Joyce Foam Pty Ltd. According to CRISIL, based on revenues, Sleepwell branded mattresses constituted a share of around 20-23% of the organised Indian mattress market as of 2015-2016. Furthermore, co is among the leading manufacturers of flexible PU Foam in India (Source: CRISIL Report).

Valuation

At price band of Rs 680-730,p/e multiple will turn out to be 25-27 on post issue annualized H1FY17 eps of Rs 27.03/share of company. Although co's fundamentals looks strong, but looking after present investment sentiment ,issue is strictly "Subscribe" only for people with high risk appetite & long term perspective .

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