Monday, March 5, 2012

Olympic Cards IPO

Olympic Cards, a south based Paper / board based products manufacturer, is going to tap capital markets with Rs 25 crore IPO. The company is engaged in the business of manufacturing and trading wedding cards, greeting cards, envelopes, letter heads, business cards, calendars, notebooks, account books, etc. under the brand 'OLYMPIC'. The company also trades in business of printing inks. Wedding invitation cards business contributes 45% to total group sales.

The IPO opens on 9 March, 2012 and closes on 13 March, 2012. The company has fixed the issue price band at Rs 30-32 a share. Investors can bid for minimum 200 equity shares and in multiples of 200 shares thereafter.

The company intends to utilize the proceeds of the IPO for setting up of a new manufacturing unit near Chennai (with an outlay of Rs 17.755 crore) and establishing four own retail outlets (with cost of Rs 3.16 crore). Presently the company manufactures products from its factory in Chennai. As a part of the expansion plan, it proposes to set up a new factory at Kannigaiper, near Chennai. It has already purchased 5.65 acres of land for the purpose. Olympic Cards is presently operating through direct outlets located at various places across Tamil Nadu. It has 6 own retail outlets. It is currently operating through 5 franchisee outlets as well and intends to set up more franchisee outlets so that there is more equitable distribution of its outlets across the country.

As on March 31, 2011, company has debt of more than Rs 17 crore on its books. In FY11, it reported a net profit of Rs 2.19 crore on total income of Rs 45.72 crore.

Ashika Capital Limited is the book running lead manager to the issue. Cameo Corporate Services Limited is the registrar of the issue.

Recommendation:

CRISIL has assigned Grade 1 to the IPO indicating poor fundamentals of the IPO. We would not recommend investing in Olympic Cards IPO to investors.

Subscription:

Olympic Cards IPO got fully subscribed.

Allotment:

Click here to check Olympic Cards IPO Allotment status!

Listing:

Olympic Cards IPO got listed on 28th March, 2012. The stock fell 5%, to close at lower circuit of Rs 28.50 as against the issue price of Rs 30!