(i) Deccan Healthcare has a diversified product portfolio with product basket consisting of more than 1,500 products used for various purposes such as hair care, skin care, heart care, immunity building, etc.
(ii) The company supplies products in various forms such as tablets, capsules, gel, liquids, ointments, powder, pastes, etc. It mainly develops and markets differentiated healthcare products specializing in nutraceutical and cosmeceutical products, which it commercializes through different revenue channels.
(iii) As on the date of the Draft Red Herring Prospectus, it has more than 140 distributors and around 5,000 marketing agents. To expand its reach, it has also entered into two distributorship agreements with foreign distributors situated in Kenya and Tanzania respectively.
(iv) In 2010, it set up its manufacturing facility at SIDCUL Pantnagar Rudrapur, Uttarakhand. The facility complies with GMP and WHO GMP for its health/diet supplements and ayurvedic products. It has also obtained FSSAI license for its products. The company is also an ISO 9001:2008 certified for Quality Management System for manufacturing and supply of Nutraceutical & Pharmaceutical Products. It Spread over 3,536 Sq. mts., the manufacturing facility is equipped with the requisite plant and machinery including Effluent Treatment Plant and other resources required for a manufacturing process.
(v) The Company sells products via Online mode and Offline Mode. 72% of the sales come from Offline and 28% comes from Online. For online they have an e-commerce platform. In FY18, their sales were close to 39 Cr, out of which 29 Cr comes from Offline and 10.50 Cr from Online. The company is targeting e-commerce revenues of Rs. 100 crore in 5 years from Rs. 10.50 crore in FY18.
Objects of the Deccan Health Care Limited IPO:
Objective of
Deccan Health Care Limited IPO
are:
1. Repayment/Prepayment of certain Secured Borrowings availed by the Company.
2. Purchase of Plant & Machinery and related civil work.
3. General Corporate Purposes.
Promoters of Deccan Health Care Limited Company are:
Mr. Minto Purshotam Gupta
Mr. Hitesh Patel
Financials of Deccan Health Care Limited IPO:
A> Growth of the Company
Year
Revenue
% Growth
PAT
% Growth
EPS
2016
1617
56.71%
354
89.26%
5.48
2017
2938
953
9.06
2018
3976
1268
9.75
The company has shown excellent Growth in the last 3 years in terms of Revenue, PAT and EPS.
B> Valuation of the Company (Post Issue)
EV/EBITDA
Mcap/Sales
P/E
P/B
P/E*P/B
10.20
3.95
10.3
2.6
26.63
The Valuation in terms of EV/EBITDA, Mcap/Sales and P/E*P/B looks stretched.
[ If EV/EBITDA>10, Mcap/Sales>2, and P/E*P/B>22.5, we may conclude the Valuations are stretched ].
C> Leverage Ratio(Based on FY18 Financials)
D/E
Interest Coverage Ratio
0.23
9.64
The Leverage Ratios in terms of D/E and Interest Coverage Ratio are quite comfortable.
D> Margins and Return Ratios
Year
OPM
NPM
ROE
ROCE
2016
39.33%
22%
42%
22%
2017
43.47%
32%
43%
18%
2018
38.80%
32%
35%
30%
The Company has shown excellent growth in OPM and NPM in the last 3 years. The Return Ratios of ROE and ROCE are also excellent.
Comparison With Peers:
Company
Mcap(Cr)
Revenue(Cr)
PAT(cr)
OPM
NPM
EPS
ROE
ROCE
Adj.P/E
Deccan
157.134
39.76
12.67
38%
31%
8.06(post issue)
34%
30.20%
13.03
Zydus wellness
5101
503
134
30%
26%
34
21.02%
22%
35.5
Note: The Financials of FY18 has been used for peer comparison.
Source: DRHP and Moneycontrol
Recommendation on Deccan Health Care Limited IPO:
Review and Recommendation of Deccan Health Care Limited IPO from our side is: 4/10[ The Company has shown excellent growth in the last 3 years. However, the asking Price at 100 looks stretched. The company has a lot of Outstanding Litigation and Criminal Cases against the promoter which does not augur well for the company. ]
Bid Details of Deccan Health Care Limited IPO as on
20 Dec 2018 | 05:00:00 PM
Category
No.of shares offered
No. of shares bid
2,000,400
4,909,200
2,000,400
1,830,000
211,200
211,200
4,212,000
6,950,400
QIBs
Yes
QIBs+HNIs Subscription
2.45X
Retail Subscription
0.91X
Total Subscription
1.68X
Discussion on Deccan Health Care Limited IPO:
This is stock to reward long term investors . History says bajaj healthcare. Tejnaksh healthcare even dhruv wellness etc. I would say hold on to your investment those alloted .The company has too less debt and reasonable valUation. Hope people allowed get listing gain too but definitely stock is for Long term investors.
Yes, I am wrong. Initially when DRHP was filed, the Quota % was 50%, 35%, and 15% but later on, due to the timid response from QIBs, the quota got changed to 50% in both the categories.
Sir, I do fundamental Analysis. I am not saying that Deccan might not give good returns but the risk is more in SME especially when timid buying interest is seen in some of the off late IPOs. You can take a risk in the name of Pantomath but do not forget it is a big issue of 42 Cr. Will Pantomath able to absorb the listing day supply pressure is a thing to watch out.
As per DRHP, there one of the promoters Mr Hitesh Patel average cost of acquisition of shares is only 11 paise. In this IPO, Hitesh Patel is selling 14,00,000 Shares which means out of 42 Cr , he will get close to 14 Cr.
As per DRHP, there are a lot of allegation/Criminal cases against the promoters.
A> In one of the cases between ” Meenakshi Gupta Vs State of Telangana”, the promoters were charged with misleading and defrauding the investors.
B> In one of the cases between ” Hitesh Patel Vs Sri Satyanaryan” the promoters were accused of collusion and illegally trading in the account of complainant and forgery among another offence.
C> In one of the Civil Matter between ” Hitesh Patel and others Vs SEBI” wherein order has been passed by SEBI for dealing in the script called Shreyas Industries in the fraudulent and manipulative manner by indulging in synchronized trades, thereby, creating artificial volumes and price which gave false and misleading trades in the scrip. The SEBI has imposed a penalty of 10,00,000 on Hitesh Patel and same has been challenged.
D> The case between ” Meenakshi Gupta Vs State Of West-Bengal” wherein she and her family members were accused of torturing and physical violence there daughter-in-law. The matter is currently pending.
E> As per Auditor Report, the company has not submitted TDS worth Rs. 25.13 Lakh for FY17-18.
It is a stock only for long term investors. Most of healthcare companies never give return on listing. Let’s see how it performs.however listing gain or much surge on listing is not expected.
It is a Fresh Issue of 22,12,000 and OFS of 20,00,000 by Promoters Mr. Hitesh Patel and Meenakshi Gupta.
As per DRHP , the company has issued close to 53,25,214 shares to Hitesh Patel at Rs. 0.11. So Mr. Hitesh Patel will earn close to 14 Cr from this IPO.
1st profitable E-Commerce Nutraceutical healthcare co in India in past 3 years. 2017-18, sales 39.76cr and Profit 12.68cr, EPS 9.75, IPO Prize 100 it’s 10.PE Multiple. 42Cr IPO.
Well known investors invested in pre IPO , Kent RO, Value worth, Amar Ambani etc… …VERY GOOD CO FOR INVESTMENT.
Deccan – Post allotment, shares will be listed on BSE SME. It is surprising to note that this company filed its two DRHPs with NSE SME for listing, but now when it is finally going public; it has opted for BSE SME listing (before recent update came).
This is stock to reward long term investors . History says bajaj healthcare. Tejnaksh healthcare even dhruv wellness etc. I would say hold on to your investment those alloted .The company has too less debt and reasonable valUation. Hope people allowed get listing gain too but definitely stock is for Long term investors.
Can we Apply in Retails Quota ?
You are wrong 50% for retailers and 50% for QIBs +HNIs
Yes, I am wrong. Initially when DRHP was filed, the Quota % was 50%, 35%, and 15% but later on, due to the timid response from QIBs, the quota got changed to 50% in both the categories.
Fundamentals are very poor of Mac Hotels and Dolfin Rubber but both IPO Giving Good Return so far And Can We buy in SKIFL Bse Ipo
Sir, I do fundamental Analysis. I am not saying that Deccan might not give good returns but the risk is more in SME especially when timid buying interest is seen in some of the off late IPOs. You can take a risk in the name of Pantomath but do not forget it is a big issue of 42 Cr. Will Pantomath able to absorb the listing day supply pressure is a thing to watch out.
The quota of Shares in Deccan Health Care LImited IPO
QIB= 50%
HNI= 35%
Retail= 15%
As per DRHP, there one of the promoters Mr Hitesh Patel average cost of acquisition of shares is only 11 paise. In this IPO, Hitesh Patel is selling 14,00,000 Shares which means out of 42 Cr , he will get close to 14 Cr.
As per DRHP, there are a lot of allegation/Criminal cases against the promoters.
A> In one of the cases between ” Meenakshi Gupta Vs State of Telangana”, the promoters were charged with misleading and defrauding the investors.
B> In one of the cases between ” Hitesh Patel Vs Sri Satyanaryan” the promoters were accused of collusion and illegally trading in the account of complainant and forgery among another offence.
C> In one of the Civil Matter between ” Hitesh Patel and others Vs SEBI” wherein order has been passed by SEBI for dealing in the script called Shreyas Industries in the fraudulent and manipulative manner by indulging in synchronized trades, thereby, creating artificial volumes and price which gave false and misleading trades in the scrip. The SEBI has imposed a penalty of 10,00,000 on Hitesh Patel and same has been challenged.
D> The case between ” Meenakshi Gupta Vs State Of West-Bengal” wherein she and her family members were accused of torturing and physical violence there daughter-in-law. The matter is currently pending.
E> As per Auditor Report, the company has not submitted TDS worth Rs. 25.13 Lakh for FY17-18.
Don’t forget Inovvative tyres and tubes Ltd which is very good company , Pantamath was lead manager now trading about 50% discount.
Product Book of the company :
http://www.deccanhealthcare.co.in/StayyoungProductBook/index.html#p=24
The Company has issued 5,68,966 preferential shares on Feb 2018 at Rs. 29 to the following:
A> Kent R.O= 5,00,000
B> Value worth Capital Management Private Limited = 25000
C> Chandra Prakash Manocha= 43966
It is a stock only for long term investors. Most of healthcare companies never give return on listing. Let’s see how it performs.however listing gain or much surge on listing is not expected.
Last three years Average EPS is 8.09.
So P/E based on this would be in the range of 11.74 and 12.36.
It is a Fresh Issue of 22,12,000 and OFS of 20,00,000 by Promoters Mr. Hitesh Patel and Meenakshi Gupta.
As per DRHP , the company has issued close to 53,25,214 shares to Hitesh Patel at Rs. 0.11. So Mr. Hitesh Patel will earn close to 14 Cr from this IPO.
1st profitable E-Commerce Nutraceutical healthcare co in India in past 3 years. 2017-18, sales 39.76cr and Profit 12.68cr, EPS 9.75, IPO Prize 100 it’s 10.PE Multiple. 42Cr IPO.
Well known investors invested in pre IPO , Kent RO, Value worth, Amar Ambani etc… …VERY GOOD CO FOR INVESTMENT.
Deccan – Post allotment, shares will be listed on BSE SME. It is surprising to note that this company filed its two DRHPs with NSE SME for listing, but now when it is finally going public; it has opted for BSE SME listing (before recent update came).
They got rejected by NSE twice and then they approached BSE.
Mahesh Gupta of Kent RO has taken strategic stake in the company…
Hence Deccan Health has been postponed for formalities.
Once shares are alotted, it will open with updated results.