Dagger Forst Tools is entering the capital market on 27th August, 2007 with a public issue of 40.06 lakh equity shares of Rs.10 each at a premium of Rs.35 (total issue price Rs.45) aggregating Rs.18.03 crores.
The promoters are subscribing to 4 lakh equity shares while net offer to public is of 36.06 lakh equity shares. If the present market price is Rs.45, who would subscribe to it?
The performance of the company is nothing great to talk about. For FY07, it had net sales of Rs.35.69 crores (total income of Rs.37.14 crores), EBITDA of Rs.8.42 crores, PBT of Rs.2.76 crores and PAT of Rs.1.02 crores. This is after an extra-ordinary expense of Rs.84 lakhs. EPS was at Rs.2.19 while company declared a dividend of 8%.
The investor interest in this Yash Birla Group company is just not there. The company is engaged into making cutting tools. The sector has a good backing but certainly not for the company, due to its stagnating financial performance. The promoter's stake in the company is at 71% and some shares are still held in the name of Late Mr. Ashok Birla and his wife and daughter inspite of their demise, 17 years ago. This shows lapses on management front.
In nutshell, the issue does not have any feature that attracts.