This post on Apollo Micro Systems Limited IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, Grey Market Premium, Subscription etc on Apollo Micro Systems Limited IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Apollo Micro Systems Limited IPO or not.
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11/1/18 Grey Market Premium Rs. 150/-
Complete Anchor List
Anchor Investors (AIs) portion in the Public Issue of Apollo Micro Systems Limited Limited, for 16,96,050 equity shares have been subscribed at Rs. 275/- per equity share. National Westminster Bank Plc, Sundaram Mutual Fund, Jupiter South Asia are among the anchor investors.
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Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Apollo Micro Systems Limited IPO .
Angel Broking: “ In terms of valuations, the pre-issue P/E works out to 29x 1HFY2018 annualized earnings (at the upper end of the issue price band), which is lower compared to its peers like Astra Microwave (trading at 36.2x ts 1HFY2018 annualized earnings). Further, AMSL has strong financial record and return ratios compared to Astra Microwave. Hence, considering the above positive factors, growth in the defence industry and lower valuations we recommend SUBSCRIBE on the issue. “
Capital Market: ” Score 48/100, The diluted equity share capital of the company stands at Rs 20.67 crore of face value of Rs 10. EPS for FY 2017 works out at Rs 9. At higher price band of Rs 275, The P/E on FY 2017 diluted EPS works out to 30.6.
Nearest listed peers are Astra Microwave and Centum Electronics. For FY 2017, Astra Microwave reported net sales and PAT of Rs 425.08 crore and Rs 56.56 crore. This gives an EPS of around Rs 6.5. At current market price of around Rs 121, the stock trades at P/E of 18.6. For FY 2017, Centum Electronics reported net sales of around Rs 387.25 crore and PAT of Rs 30.82 crore. This gives an EPS of around Rs 24.2. At current market price of Rs 777, the scrip trades at P/E of around 32.”
Choice Broking:“ On valuation front, AMSL is demanding a P/E valuation of 32.9x as compared to peer average of 28.7x. We are of the view that the business is fairly priced, leaving limited space for further upside. Defense investment theme is long term in nature. Given the strong sector outlook, we believe that the stock would provide returns in medium to long term. However, the key concern linked to the sector is the highly stretched working capital cycle. Thus considering the above observations, we assign a “Subscribe with Caution” rating for the issue”
Nirmal Bang: “Over FY14- FY17 the revenues of AMSL have grown at a CAGR of 43% however, growth in EBIDTA and net profit were 59% and 52% respectively. EBIDTA margin improved from 13.9% to 19.2% from 2014 to 2017. Despite such high growth rates, AMSL debt equity ratio is around 1.2x in FY17.During the 1HFY18, AMSL reported revenues of Rs. 109.3Cr, EBIDTA of Rs. 19.3Cr and net profit of Rs. 7.1Cr. With Government of India spending nearly 1.6% of GDP on defence on a yearly basis and government focus on offset clause, AMSL will continue to gain orders and revenues from the same. AMSL has consistently improved its return ratios over a period of time despite with higher working capital. ROCE which was 16.5% in FY14 improved to 26.2% in FY17 and ROE has improved from 19.4% in FY14 to nearly 29% in FY17. On the valuation front, at the upper end of the price band of Rs275 (not considering the retail discount), AMSL is offered at P/E of 30.6x on a fully diluted basis based on FY17 earnings. We recommend subscribing to the issue with a long term horizon.”
Rudra Shares & Brokers : “Taking into consideration, the current market opportunities in defense and Government of India’s initiative, ‘Make in India’ aims to boost the nation’s domestic manufacturing sector as well as to create market by targeting exports, the issue seems to be fairly priced. We recommend to SUBSCRIBE the IPO”
SMC : “Rating 2.5/5 Considering the P/E valuation on the upper end of the price band of Rs. 275, the stock is priced at pre issue P/E of 29x on its projected annualised FY18 EPS of Rs. 9.48. Post issue, the stock is priced at a P/E of 39.97x on its EPS of Rs. 6.88. Looking at the P/B ratio at Rs.275 the stock is priced at P/B ratio of 5.41x on the pre issue book value of Rs.50.83. and on the post issue book value of Rs. 42.32 the P/B comes out to 6.82x”
SP Tulsiyan website: “Company’s historic growth rates have been very attractive. Although business eats up a lot of working capital resources, incoming funds should address that need. Also, leverage will become leaner in relative to the equity, making Apollo Micro Systems a good bet. Since sector prospects are very bright, one can apply in the issue with a long term view.“
SSJ Finance: “AMSL has reported a CAGR of 54.2% and 58.3% on revenue and net profit fronts respectively over FY2013-2017. On its upper band of price of Rs 275, the issue is priced at PE ratio of 27.1x of its H1FY2018 annualised EPS of Rs 10.2. We believe that the IPO is fairly priced leaving a room for upside. Hence, we recommend to Subscribe the IPO.”