(i) Sumit Woods Limited was incorporated on January 09, 1997 in Goa, Daman, and Diu at Panaji, Goa. Sumit Woods Limited engaged in the construction and development activity for the last 21 years and along with its group companies, they have constructed more than 50 residential and commercial projects in Mumbai,Thane, and Goa. They have handed over more than 4500 units since its incorporation.
(ii) They started off the business under a partnership firm namely, “M/s Sumit Constructions” to carry on the business of Civil contractors and executed projects for Modern Bread, Railway Officers, and Government Holiday Homes. Due to expansion and growth of construction activities in the market, in 1997, Mr. Mitaram Jangidand Mr. Subodh Nemlekar incorporated the company (Original Promoters) with the object of acquiring land, carrying out construction work, developing and organizing of immovable properties etc.
(iii) The Company’s first project was Kandivali Mitnayan Co-Op Housing Societywith a built-up area of 26000 Sqft. which was completed in the year 2004. The Company has thereafter completed 19 projects to date. During the period 2012-17, the main business activities were the redevelopment of Old Buildings, (CESS Building Redevelopment / MHADA Redevelopment), and residential projects in Mumbai and in the state of Goa.
(iv) Following are the details of the ongoing projects of Sumit Woods
Objective of Sumit Woods Limited IPO are:
(i) To meet the fund requirements for execution of our Ongoing and forthcoming Projects and other working capital requirements.
(ii) To repay/prepay the secured loans.
(iii) To provide funds to meet General Corporate Purpose.
(iv) To meet Public Issue Expenses.
Promoters of Sumit Woods Limited Company are:
1. Mr. Mitaram Jangid
2. Mr. Subodh Nemlekar
3. Mr. Bhushan Nemlekar
4. Mrs. Sharda M. Jangid
5. Mrs. Kavita B. Nemlekar
Description of the Business Process
The company follows a particular process for the development of real estate projects. They prepare the layout of the building in consultation with the architects, make an arrangement to get all the approvals required for the project, carry out all the activities required for the construction and development of the project and after the completion of the development process they sell off the project.
(a) Land Acquisition
1. Identification and Evaluation of Potential Location.
2. Regional Demographics.
3. Title Search Report.
4. Negotiation with the Landowners Planning.
(b) Design and Approval
1. Planning and Conceptualisation.
2. Preparation of the Plan.
3. Obtaining the statutory approvals.
(c) Project Execution
1. Identification of Contractors for Execution.
2. Project Supervision.
(d) Sales and Marketing
1. Through Company Executives
(i) Authorized Share Capital
(1,70,00,000 Equity shares at FV=10)
(ii) Issued, Subscribed,& Paid-up Share Capital Before Issue
(1,12,40,522 Equity Shares at FV=10)
(iii) Present Issue
( 40,53,000 Equity Shares at FV=10)
(iv) Reservation for Market Maker (2,19,000 Shares at FV=10)
(v) Reservation for QIB (1,91,7000 Equity Shares at FV=10)
(vi) Reservation for HNI (5,75,100 Equity Shares at FV=10)
(vii) Reservation for Retail (13,41,900 Equity Shares at FV=10)
(viii) Paid Up Share Capital after the issue
Financials of Sumit Woods Limited IPO:
1. Assets and Liabilities Key Parameters
2. Profit n Loss Key Parameters
3. Cash Flow Statement(all figures in lacs)
(i) Net Cash Generated from Operation
(ii) Net Cash Generated from Investment
(iii) Net Cash Generated from Financing Activity
(iv) Total[ (i)+(ii)+(iii) ]
(v) Cash and Cash Equivalents at the Beginning of the Year
(vi) Cash and Cash Equivalents at the end of the Year
Key Notes:a) The Revenue is growing at CAGR of 14.85% from FY14 to FY18.
b) The PAT is growing at CAGR of 30% from FY14 to FY18.
c) The Annualized EPS[ Post Issue] = 5.06d) P/E(post issue)= 8.88 [ Reasonably Priced].
e)P/B(post issue)= 0.98 [ Reasonably Priced]
f)D/E(post issue) =0.98(manageable)
g)Mcap/Sales(ideally <2)= 2 on FY18 sales(Reasonable).
i) The Company has manageable recieveable days of 90 in FY18 which as come down from 125 days last year. The Receivables/Sales stands at 25%.
Comparison With Peers:
Sumit Woods Limited
Ashiana Housing Ltd
Arihant Superstructures Limited
Source: MoneyControl and DRHP of Sumit Woods Limited
(i) The Financials as per FY18 is taken for the calculation.
(ii) The price of shares is taken as on 24.08.2018 for Arihant and Ashiana.
Recommendation on Sumit Woods Limited IPO:
Review and Recommendation of Sumit Woods Limited IPO from our side is:6/10
[ The Valuations in term of P/ E, P/B, and M.Cap/Sales looks quite reasonable. The Company has a decent track record in last 5 years]