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Mar 12, 2013, 04.38 PM IST | Source: Moneycontrol.com

KFL exposes how utterly incompetent are our mkt regulators!

The 2005-registered Surat-based Kavita Fabrics (KFL) is making a fresh public issue of 12.75 lakh shares of Rs 10 each at a fixed price of Rs 40 a piece aggregating to Rs 5.10 cr. Of the issue, 2.07 lakh shares (Rs. 54 lakh) are reserved for subscription by 'Market Makers' to the issue.

VS Fernando

Financial Analyst & Columnist

Expertise : IPO

More about the Expert...

By VS Fernando

Quality of SME IPOs entertained by the country's oldest stock exchange, as compared to its rival NSE, leaves much to be desired. Is BSE-SME Platform becoming a 'gambling den' for the 'club class' fly-by-night operators? Kavita Fabrics exposes how utterly incompetent are our market regulators! 

The Offer
The 2005-registered Surat-based Kavita Fabrics (KFL) is making a fresh public issue of 12.75 lakh shares of Rs 10 each at a fixed price of Rs 40 a piece aggregating to Rs 5.10 cr. Of the issue, 2.07 lakh shares (Rs. 54 lakh) are reserved for subscription by 'Market Makers' to the issue.

Also Read:   SME: Kavita Fabrics' Rs 5.1cr-IPO opens for subscription

The lead-manager to the IPO, Intensive Fiscal Services, has underwritten to the extent of 83.76% (Rs 4.27 cr). An associate of the lead-manager, Intensive Softshare, and K.M. Jain Stock Brokers are acting as 'market makers' underwriting 15.29% (Rs 78 lakh) and 0.94% (Rs 4.80 lakh) respectively. Subscribers must apply for a minimum of 3000 shares (Rs 1.2 lakh) and multiples thereof. The shares are proposed to be listed on the SME-Platform of Bombay Stock Exchange (BSE).

OFFER AT A GLANCE

Issuer Name

Kavita Fabrics Ltd

Offer Amount

Rs 5.10 cr

Offer Quantity

12.75 lakh shares of Rs 10 each

IPO on Total Equity

36.7%

Post-IPO Free Float

64.1%

Post-IPO Promo Stake

35.9%

Post-IPO Capital

Rs 3.47 cr

Offer Price

Rs 40

Application Quantity

3,000 & Multiples of 3,000

Offer Opens

February 20, 2013

Offer Closes

February 22, 2013

Listing

SME Platform of BSE

Rating

Nil

Lead Manager

Intensive Fiscal

Registrar

Bigshare Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Object
Of the Rs 5.10 cr issue proceeds, Rs 3.5 cr is earmarked for long term working capital requirement, Rs 1.2 cr is allocated for 'general corporate expenses' and Rs 40 lakh is meant for issue expenses.

Manager's Track
KFL's IPO is lead-managed by Mumbai-based Intensive Fiscal Services who has managed just two public issues in last three years. While the last IPO managed by them, Prakash Constrowell, has yielded decent returns to investors, the earlier one viz. Inventure Growth has a dismal record. The scrip, issued at Rs 117 in July 2011, almost doubled to Rs 232 within two weeks of listing in August 2011. This was followed by a bumper 3:1 bonus issue! Post-bonus, once the lock-in period lapsed, the price started moving southwards. Today, it is available at below par that is more than 67% below the adjusted IPO price!

Intensive Fiscal-associated recent IPOs

ISSUER NAME

 

IPO

DATE

FV

Rs

IPO

PRICE

CURR.

PRICE

GAIN

%

Inventure Growth

20-Jul-11

10

29.25

9.47

-67.6

Prakash Constrowell

19-Sep-11

1

13.80

19.40

40.6

 

 

 

 

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