Dangee Dums IPO

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Dangee Dums IPO Overview
(i) 
The company is based out of Ahmedabad, Gujarat and spearheaded by Mr. Nikul Jagdishchandra Patel, who holds a degree of Bachelor of Engineering in civil from Gujarat University, being a foodie, he came up with the idea of starting a business related to chocolates. In June 2011, Mr. Mrudang Drashan Jambusaria expressed his desire to quit the business and Mr. Nikul Jagdishchandra Patel took over the entire operations as he had confidence in the product and the market for such product.

(ii) The first challenge was to choose a brand name. Promoters wanted a name which was not related to any product, geography, culture or region. ―The basic idea was to choose such a name that could be carried forward to any country.Thus the idea to use the brand name ―”Dangee Dums” which did not have any meaning, was born. Dangee Dums offers a premium quality product at a premium price for premium people.

(iii) The Dangee Dums started with the business by launching cakes for a minimum price tag of Rs. 1200 for one kg cake when other cake retailers were selling at Rs. 500 to Rs. 600 per kg and they restricted themselves to sell minimum one kg cake and not the smaller variants. This led to operating losses which continued for 6-8 months. However, with an aim to promote cakes, they introduced the concept of ―designer cake in 2011, which was the first of its kind in Ahmadabad. This was a successful attempt which pushed company sales. To improve sales further the company took permission from the local government authorities to open the outlet till late at night up to 1 AM which has resulted in improved sales as people often like desserts after dinner.

(iv) The Company which started with 2 outlets in 2011 now operates its business in 81 outlets spread across the city of Ahmedabad, Gandhinagar, Vadodra, Anand, and Surat.

(v) Dangee Dums manufactures the following products
(i) Cakes and Pastries
(ii) Designer Cake
(iii) Chocolates
(iv) Cupcakes and Ice creams

(vi) The Investor presentation prepared by Monarch Networth Capital Limited is available at Dangee Dums Investor Presentation 

 

Dangee Dums IPO Stock Quote & Charts

210.50

+0.24%

  • Open: 210.50
  • High - Low: 210.50 - 210.50
  • Previous Close: 210.00
  • Total Traded Volume: 3200
  • Updated On: 12-Nov-2018

Objects of the Dangee Dums IPO:

Objective of Dangee Dums Limited IPO are: 1. Repayment of Existing Secured Loans 2. Purchase of Fixed Assets 3. General Corporate Expense 4. Issue Expenses

Dangee Dums IPO Details:

Open Date: Aug 20 2018
Close Date: Aug 24 2018
Total Shares: 2,712,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price IPO
Issue Size: 20.07 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 74 Per Equity Share
Listing At: NSE Emerge
Listing Date: Sep 03 2018

Promoters And Management:

Promoters of Dangee Dums Limited Company are: (i) Mr. Nikul Jagdishchandra Patel, aged 34 years, is Chairman and Managing Director and also the Promoter of the Company. He holds a degree of Bachelor of Engineering in Civil from Gujarat University. He has more than 7 years of experience in the industry in which the company is presently engaged. He is responsible for the expansion and overall management of the business of our Company (ii) Mrs. Foram Nikulbhai Patel aged 33 years is Non-Executive Director of our Company and was originally appointed as Additional Non-Executive Director on June 30, 2017, and later appointed as Non-Executive Director vide Extra-Ordinary General Meeting held on August 01, 2017. She holds a degree of Bachelor of Engineering in Civil from Gujarat University and is having 13 years of experience of general administration and management. (iii)Mr. Ravi Hemantkumar Patel, aged 37 years, is the Executive Director of our Company. He holds a degree of Bachelor of Engineering in Computer Science from Florida Atlantic University. He was appointed as Executive Director on the Board on May 24th, 2011, further designated as Whole-time Director of the Company on September 01, 2017 for a period of 5 years. He is entrusted with the responsibility to look after the HRD and Production of our Company. He is a young and dynamic person and has more than 6 years of experience in the industry in which the company is presently engaged.

Company Business:

Let Us Understand the Business Model of the Company (i) The Company manufactures Cakes, Pastries, Ice-cream under its own Brand name ―" DaNGEE DuMS", sell and distribute them with the help of their own outlets. The Company currently do not have any Franchisee model running. (ii)  Apart from manufacturing they also sell bakery products like Cookies, Nachos and Beverages like soda on the trading terms under the brands of the respective manufacturers.

Capital Structure:

(i) Authorized Share Capital 1,10,00,000  Equity shares at FV@10) 11 Cr
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (75,53,000 Equity Shares at FV@10) 7.535 Cr
(iii) Present Issue (   27,12,000 Equity Shares at FV@10) 2.712 Cr
(iv) Reservation for Market Maker (1,36,000 Equity Shares at FV@10) 13.6 Lacs
(v) Reservation for QIB& HNI (12,87,000 Equity Shares at FV@10) 50%
(vi) Reservation for Retail  (12,87,000 Equity Shares at FV@10) 50%
(vii) Paid Up Share Capital after the issue 10.247 Cr
Sr.no Name of the promoter No. of shares Average cost of Acquisition
1 Mr. Nikul Jagdishchandra Patel 21,280 74
2 Mrs. Foram Nikul Patel 52,97,835 23.24
3 Mr. Ravi Hemantkumar Patel 17,16,385 22.82

Financials of Dangee Dums IPO:

1. Assets and Liabilities Key Parameters
Year Asset(lacs) Liabilities(lacs) Net Worth(lacs) Book Value D/E [<2] RONW ROCE Receiveable days
FY14 309.28 599.76 -290 -2905 -2.06 NA NA 6
FY15 845.44 1,423.95 -579 -5785 -2.46 NA NA 5
FY16 1,552.92 2,337.40 -784 -150 -2.98 NA NA 2
FY17 2,716.77 3,410.73 -694 -133 -4.91 NA NA 14
FY18 4,367.24 3,211.32 1,156 15 2.78 13% 15% 41
Post Issue 3162.88 31 1.02 5%
2. Profit n Loss Key Parameters
Year Revenue(lacs) PAT(lacs) EBITDA Margins Profit Margins Outstanding Shares(lacs) EPS
FY14 295 -128 NA -43% 0.10 -1276.00
FY15 598 -288 NA -48% 0.10 -2880.40
FY16 1153 -513 NA -45% 5.22 -98.31
FY17 1996 91 24% 5% 5.22 17.34
FY18 3658 155 28% 4% 75.53 2.05
Post Issue 102.65 1.51
 
3. Cash Flow Statement(all figures in lacs)
Particulars FY18 FY17 FY16 FY15 FY14
(i) Net Cash Generated from Operation -211 185 308 -559 -112
(ii) Net Cash Generated from Investment -853 -1,151 -878 -155 -69
(iii) Net Cash Generated from Financing Activity 1,226 771 812 721 183
(iv) Total[ (i)+(ii)+(iii) ] 162.32 -195.42 240.98 7.11 1.89
(v) Cash and Cash Equivalents at the Beginning of the Year 59 254 13 6 4
(vi) Cash and Cash Equivalents at the end of the Year 221.32 59.00 254.42 13.44 6.33
Key Notes: a) The Revenue is growing at CAGR of 87.65% from FY14 to FY18. [Greeen Flag]! b) The Company was in losses till 2016 but from 2017 onwards the company has shown a PAT of 91 Lacs and 1.55 Cr in FY17 and FY18 respectively. c) The Annualized EPS(post Issue) for FY17-18 is 1.51 d) P/E(post issue)= 49 [ aggressively priced] e) P/B(post issue)= 2.38 f) The company has a debt of 26 Cr on books[ Red Flag!] g) Mcap/Sales(ideally <2)= 2.07 on FY18 sales( higher). h) The Company has shown excellent EBITDA Margins of 24% and 28% in FY17 and FY18 respectively but due to high-interest on debt, the Net Profit Margin has gone down miserably to 5% and 4% in FY17 and FY18 thereby denting the bottom-line.[Red Flag!] i) The Company is not continuously generating positive cash flows from operations in last 5 years- Red Flag!]

Comparison With Peers:

Since there are no listed peers available with the same line of business, no peer comparison has been done.

Recommendation on Dangee Dums IPO:

Review and Recommendation of Dangee Dums Limited IPO from IZ team is: 4/10 [The Company has shown excellent revenue growth but the bottom-line not following the same trend is a sign of worry. The Debt on books is high. The Valuation is very steep at P/E of 50 and Mcap/Sales of 2.07] 1-5: Fair 5-7: Good 7-10: Excellent.

Lead Manager of Dangee Dums IPO:

  1. Monarch Networth Capital Limited

Registrar of Dangee Dums IPO:

  1. Bigshare Services Private Limited

Company Address:

Dangee Dums Limited 4/A, Ketan Society, Nr. Sardar Patel Colony, Naranpura, Ahmedabad - 380 014, Gujarat, India. Phone No: 079-27681878 E-mail: cs@dangeedums.com Website: www.dangeedums.com

25th Sep 2018 - 27th Sep 2018 => Aavas Financiers IPO

Bid Details of Dangee Dums IPO as on
24-Aug-2018 18:30:00 IST

Category No.of shares offered No. of shares bid
1,288,000 134,096,000
1,288,000 30,720,000
136,000 136,000
2,712,000 164,952,000
QIBs Yes
QIBs+HNIs Subscription 104.11X
Retail Subscription 23.85X
Total Subscription 63.98X

Discussion on Dangee Dums IPO:

    Dangee Dums allotment available out and is available inside investorzone app.

    DANGEE DUMS SME IPO
    Subject to 16000/-
    10-12 pri
    Today last day

    Funding cost at 8 percent comes at Rs 12
    So GMP must increase

    Bumper subscription. Good to see such subscription figures in SME after a long time. The allottes will get hefty listing gains.

    Risk Savvy Investor can apply in Dangee Dums for listing gain.

      Hi can u share me details of broker who offering subject to price in Ahmedabad. I want to sell my application.

    Whoa!! Surprised Surprised!! Hard to imagine issue sailed through on the very first day. Is this something we can’t see which is visible to these investors?? Let’s see how the story unfolds in the next couple of days.

    QIB+HNI: 1.89X
    Retail: 0.11X
    Total: 0.95X
    looks quite fishy as on very 1 hr theQIb+ HNI portion subscribed 1.89x to trap retailers. Just wait for the end of day figure to get any meaningful insight.

    Another issue where in lead manager did not price it well . Recently Monarch issues salebhai has been cancelled. Despite that it has come up with new sme at such valuation.

      The pricing in SME lately is the issue which is very worrisome for investors. Why can’t management understand that give and take philosophy do work in share market as well. If the company left something for the investors, they will also reward them with a good subscription number. However, with the greed of Promoters and Lead Managers, the interest in the SME market is going down day by day. Few lacs here and there won’t make LM or Promoters rich or poor but will surely raise investors confidence in SME market. I think Dangee Dum is a good company at price somewhere between 25-30.

    March 2018
    PAT= 1.5 Cr
    No.of Outstanding Shares before IPO=75.35 Lacs
    No.of outstanding Shares after IPO= 75.35+27.12 =1.0247 cr
    EPS= 1.46
    P/E= 74/1.46= 50.68
    Conclusion- Very Expensive Valuation.

    As on March 2018
    Long-term Debt= 21 Cr
    Short-Term Debt= 5 Cr
    Total Debt=26 Cr
    Equity=11 Cr
    So D/E= 2.36( Very High).
    Conclusion- The Company has high debt on books.

    Risk Associated with Business

    (i) The biggest risk with the company is they don’t have a franchise model running in their business. So if they have to open any new outlet lot of cap-ex and manpower will be required.

    (ii) The Business is concentrated only in one State. If any quality issues arise the impact will be huge being operational in the single state.

    Good part I like about the company is they have done Right issue in July 2017 at Rs. 74 and IPO is issued exactly at the same price. In last one year, no equity dilution has happened otherwise generally, we see SMEs do lot of Bonus Issue and Spilt to favour themselves.