IPO Update: Dynemic Products Ltd.

Average Issue : Apply for listing Gains
Dynemic products has entered the capital markets with a intial public offer of 44.21 Lac shares at a fixed price of Rs.35 per share (Rs. 25 premium on a face value of Rs.10) for expansion of its existing facilities. Investment Guru rates the issue as an average issue and recommends investors to apply only with a view to take advantage of the listing gains on account of ongoing IPO Boom.

Dynemic is into manufacturing of food colours (dyes & pigment) which has applications in food industry, beverages,drugs and alcohol. The company has a popular product named "tartrazine".

Major share of Revenues comes from export earnings.

For FY05 the company clocked sales of Rs. 27.75 crores and a net profit of Rs. 2 Crores. For first 5 months of FY06, the company has clocked a turnover of Rs. 11.45 crores and a net profit of Rs. 1.2 Crores.

At the offer price of Rs. 35 and the weighted average EPS of 3.5, the offer comes at a P/E multiple of 10.14 This looks reasonably given the P/E of its peer in the range of 6-37.

Return on net worth(weighted average ) comes to 20.59% and the post issue Net Asset value will be Rs. 21.86

Issue Opens : 18-Jan-2006
Issue Closes : 25-Jan-2006
Registrar: Big Share services Pvt. Ltd.