Open and Close Date of Euro Multivision IPO
The Euro Multivision IPO opens on 22nd September and closes on 24th September 2009.
Euro IPO: Price Range
The price range of Euro Multivision is between Rs. 70 and 75.
IPO Grading by CARE: Euro Multivision
CARE has graded the IPO 3 out of 5 which means average fundamentals. The positives in the grading are the favorable dynamics in the new business, and the availability of SEZ status.
The negatives are delay in the implementation schedule of the Photo Voltaic (PV) project, high debt – equity ratio, small scale of existing operations, reducing margins in existing business and uncertain export market among others.
Business of Euro Multivision
Euro Multivision is the second largest Indian company in the business of manufacturing CDs and DVDs. The big player in this field that you might have heard about is Moser Baer.
The company commenced production in 2005 with five manufacturing facilities and an installed capacity of 720 lacs CDs and 72 lacs DVDs.
The company added 5 more lines in 2006 – 07, and increased their CD capacity to 1800 lacs. This is the existing business of the company, but it proposes to get into a new business of manufacturing solar cells for generation of electrical energy.
The company plans to build a photovoltaic solar cell manufacturing unit with a capacity of 40 MW per year at a total cost of Rs.1675 lacs in a SEZ at Gujarat.
The company has acquired land and also received SEZ status. Euro Multivision contracted with OTB Solar B.V. Netherlands to deliver the machinery and set it up for a total cost of 13.2 million euros. The machinery has been delivered and is at a Custom Bonded Warehouse in Gujarat. The company plans to export the entire production from this plant.
Financials of Euro Multivision
Euro Multivision has total revenues of Rs. 9035.84 lacs in 2008. This was up from 5893.13 lacs in 2007 and 4476.45 lacs in the year before that. The company commenced production in 2005, so there is not a lot of financial history to go by.
The net profit for 2008 was Rs. 901.74 lacs, 619.07 lacs for 2007 and a loss of 128.69 lacs, the year before that.
The EPS for the year 2008 – 09 was Rs. 1.22. Rs. 8.38 for 2007 – 08 and Rs 7.57 in 2006 – 07. At an EPS for Rs. 1.22, the P/E multiple at the higher range comes out to be 61.47.
Risks facing Euro Multivision
The company, its promoters and directors are facing several legal liabilities, and if these are decided against them, the company’s operation may be impacted significantly.
The company had a loss of Rs. 128.69 lacs in 2006, which was its first year of operation.
There has already been a delay in implementing the new project schedule, due to which costs have escalated and revenues delayed. Any more delays will affect the business negatively.
The company has had negative cash flows from investing activities in all of its preceding financial years.
They may utilize more than 25% of the IPO proceeds of the issue for general corporate purposes.
Euro Multivision is taking out this IPO to raise funds in order to get into new business segment of Photo Voltaic solar cells. This is a new business for the company, and it faces the risks associated with entering a new business segment.
These were some key aspects related to the Euro Multivision IPO that you should keep in mind while deciding whether you want to invest in the IPO or not. This is not a buy or sell recommendation, and is just a summary of its business.
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