Avoid' Tirupati Inks IPO, says HEM Securities

MUMBAI: HEM Securities has advised investors to stay away from the initial public offering of Tirupati Inks. The company has entered the capital market to raise Rs 51.50 crore by issuing shares of face value Rs 10 each in price band of Rs 41-43 per share.
The company is mainly engaged in the business of manufacturing of printing ink and trading in polyester films. It has two manufacturing facilities i.e. one at Kanpur & another at Jammu.

“The company is bringing the issue at price band of Rs 41-43 per share which will turn into p/e multiple of 29-30 at post issue FY10 eps of Rs 1.42. The company with low profit margins and huge debt burden does not seems to be an attractive investment destination at present levels. Hence we recommend investor to “Avoid” the issue,” the report said.

The Proceeds will be used for setting up facility for manufacturing of speciality Inks & Ink concentrates, capital expenditure on lab equipment for existing facilities, proposed acquisitions and augmenting working capital resources.

The issue closes Friday.