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Shankara Building Products Ltd IPO Analysis. Should You Invest ?

 

 

The Price Band for the Offer is fixed from Rs. 440 to Rs. 460 per Equity Share. The Offer will constitute at least 25% of the post Offer paid-up Equity Share capital of the Company.It is India’s leading organised retailers of home improvement and building products with highest number of stores, operating under the trade name Shankara BuildPro.With main focus on Urban and semi – urban markets the company was operating 100 Shankara BuildPro stores, spread across 10 states in India such as Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Odisha.

The company primarily offer steel-based products, such as structural steel, TMT bars, pipes and tubes and other allied steel products. Given the wide application of such building products, Shankara also caters to multiple sectors, including housing, general engineering, automotive, renewable energy, agriculture, construction and infrastructure.

The biggest advantage of this company has they have strong vendor network from over two decades. It has also unique value chain system with high end logistics infrastructure and supply chain management. Additionally strong background of financial stability and Customer relationship Management.  The company is renting most of the properties for its retail outlets. Its 81 of its retail stores were operated from leasehold premises. It means large portion of leasehold premises will incur tremendous amount if operating expense and the company in future would be renting out more property for it retail outlets which will adverse affect their revenues by a rise in rental housing market.

 

Issue Detail :-

 Issue Open: Mar 22, 2017 – Mar 24, 2017
 Issue Type: Book Built Issue IPO
 Face Value: Rs 10 Per Equity Share
 Issue Price: Rs. 440 – Rs. 460 Per Equity Share
 Minimum Order Quantity: 32 Shares
 Listing At : BSE, NSE
 Initiation of refunds: On or about Mar 31, 2017
 Credit of Equity Shares to demat accounts: On or about Apr 03,  2017
 Commencement of trading of the Equity Shares: On or about Apr  05, 2017

 

India is ranked as the seventh largest economy in the world with GDP growth of 7.1%, which is expected to grow to 7.9% in FY17. The per capita income is also increasing at a healthy rate of 7.3% over FY15-16. This trend is expected to continue as government is planning to implement 7th Pay Commission.Housing industry would be the top contributor in future of India’s GDP as it is likely to grow due to rapid urbanisation, government push for affordable housing and other infrastructure-related incentives.We can see growth in demand for players in housing industry due to huge allocations made by government for more massive financing and at lower interest rates. Many government schemes such as Pradhan Mantri Awaas Yogana and Smart Cities project will create enormous demand in this sector.

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