We at Jainam Wealth are “NEUTRAL” to the Sheela Foam Ltd IPO as we feel the upcoming 1-2 quarters can be impacted due to demonetization. On the fundamental ground it has ~20-23% market share of brand Sleepwell, pan-India sales & distribution network, improving Net profit margins from 2.75% in FY15 to 6.18% in FY16, robust financial with higher ROCE (%) is 38.78% in FY16 and 0.34x Total debt/Equity in FY16 but available at premium valuation of 34x P/E and 10.52x P/BV.
Price Band Rs.680 - 730. Issue open on 29th November and close to 01st December. Market Lot 20 Shares.
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