CARE assigns ‘IPO Grade 2’ to AVON Weighing Systems
CARE has assigned ‘CARE IPO Grade 2’ to the proposed initial public offer of AVON Weighing Systems Ltd, which indicates below average fundamentals.
By INDIATIMES NEWS NETWORK |
MUMBAI: CARE has assigned ���CARE IPO Grade 2��� to the proposed initial public offer of AVON Weighing Systems Ltd, which indicates below average fundamentals.
AVON Weighing Systems is planning an issue of 98,36,400 equity shares, of face value of Rs 10 each, amounting to Rs 9.84 crore.
The grading factors in good track record of the promoters in trading operations, long relationship with Tanita Corporation and A&D Company Ltd, stable profitability margins with growing operations and favourable prospects of the digital and mechanical weighing scales. However, the grading is constrained by AVON���s small size of operations, high contribution of export earnings, high working capital requirements resulting into high overall gearing, excessive reliance on Tanita Corporation for setting up new manufacturing plant and lack of promoter���s experience in manufacturing.
AVON is the authorized dealer and one of the distributors of weighing systems of A&D and Tanita Corporation, Japan. The products cater to wide range of industries such as - pharmaceuticals, chemicals, gems & jewellery, healthcare, retail.
Apart from trading, AVON also provides consultancy services, software development services, after sales services and assembly work, as per client���s requirement. Exports constitute majority portion of the total revenue of the company. However, AVON enjoys a natural hedge against currency fluctuations due to imports.
AVON proposes to enter into manufacturing of mechanical and digital weighing system, with technical help from Tanita. The company also proposes to open four new showrooms and additional office space in Mumbai. The total cost of the project is Rs 17.30 crore to be funded from the mix of promoters��� equity (Rs 4.36 crore), IPO (Rs 9.84 crore), long-term debt (Rs 2.60 crore) and internal accruals (Rs 0.50 crore).
AVON Weighing Systems is planning an issue of 98,36,400 equity shares, of face value of Rs 10 each, amounting to Rs 9.84 crore.
The grading factors in good track record of the promoters in trading operations, long relationship with Tanita Corporation and A&D Company Ltd, stable profitability margins with growing operations and favourable prospects of the digital and mechanical weighing scales. However, the grading is constrained by AVON���s small size of operations, high contribution of export earnings, high working capital requirements resulting into high overall gearing, excessive reliance on Tanita Corporation for setting up new manufacturing plant and lack of promoter���s experience in manufacturing.
AVON is the authorized dealer and one of the distributors of weighing systems of A&D and Tanita Corporation, Japan. The products cater to wide range of industries such as - pharmaceuticals, chemicals, gems & jewellery, healthcare, retail.
Apart from trading, AVON also provides consultancy services, software development services, after sales services and assembly work, as per client���s requirement. Exports constitute majority portion of the total revenue of the company. However, AVON enjoys a natural hedge against currency fluctuations due to imports.
AVON proposes to enter into manufacturing of mechanical and digital weighing system, with technical help from Tanita. The company also proposes to open four new showrooms and additional office space in Mumbai. The total cost of the project is Rs 17.30 crore to be funded from the mix of promoters��� equity (Rs 4.36 crore), IPO (Rs 9.84 crore), long-term debt (Rs 2.60 crore) and internal accruals (Rs 0.50 crore).
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