Neelkanth Realtors Limited

Red Herring Prospectus dated December 30, 2024

Summary

Neelkanth Realtors Limited is making an initial public offer. The document does not yet state the price.

All the amounts stated for the objects go to funding development cost of Neelkanth Plaza Project (Funding Development Expenses). The amounts for repayment and/or pre-payment, in full or part, of NCDs issued by the company and general corporate purposes are not yet stated.

The review found 7 points to read closely and 19 worth checking.

Read closely

1. Criminal proceedings against the company, its directors or individual promoters
2. Physical capital expenditure rests on quotations with no orders placed
3. Profits are not converting into operating cash
4. Profit jumped in the year before the IPO
5. Long or lengthening receivable days
6. High debt to equity
7. Licences and approvals pending, expired or not renewed

How the capital was built

• The last priced issue of shares was on 31 Mar 2012: 24,500 shares to promoters and others at ₹100 each (₹0.12 in today's shares); it came about 13 years before this prospectus.

Conclusion

Of the 7 points to read closely, 1 concerns the promoters, management and their dealings (criminal proceedings against the company, its directors or individual promoters), 1 concerns how the IPO money will be spent, 4 concern the financial statements and 1 concerns the business, the valuation or the quality of disclosure. These could not be scored automatically and need reading: group entities in the same business; promoters sold or transferred shares shortly before the IPO; material pre-IPO allotments to non-promoters. These wait for the price and the final share count: shares issued shortly before the IPO at a deep discount to the issue price; low promoter holding after the issue; issue price is a large multiple of promoters' cost.