Banka Bioloo IPO

Trash company in trash business. Surprising that companies of all sorts are coming to markets for funds. That too at such high prices! Avoid!!

I’m not against trash business but take a look at the P/E ratio. There is no way you can make money at this price. Atleast one LC guaranteed.

I agree with Paresh. There’s tremendous opportunity for bio-toilets that treat human waste onsite. Similarly, Railways are increasing their focus on cleanliness and sanitation. Having heard about Banka BioLoo, their railway segment revenue has grown multi-fold. In my view, it’s a good opportunity for mid to long term.

I’ll not be surprised if some of these SME IPOs including this Banka are withdrawn due to poor demand. If one looks closer, the numbers are not reliable too. Social service is one thing and running a business is another.

This could be another Ashoka Metcast!

At this point of mine…Im unable to figure out who has more trash….banka or Aryaman

Hey Namita Banka

I am quite optimistic and appreciative about the way you have grown your business to this level. Don’t get irked by any such comments. I have been an avid and regular observer plus analyser of stocks in India. As per my understanding, your company has immensely good potential owing to rational pricing of your products. There is a very wise saying by world’s most accomplished, renowned and richest Investor [i hope you have heard his name] called Warren Buffett. He has advised budding and aspiring stock investors to invest in the stocks you believe [after you thoroughly study them; though risks still remain for retail investors because they do not have all the required information for due-diligence and analyses] and remain invested in them by sticking to such sound investments for long-term regardless of disturbing noises in the stock markets like volatile fluctuations, rumours, grapevine, speculative news, etc. This is from an investor’s perspective. But you too [as the issuing company promoter-shareholder-management] can take a cue and learning from this by ignoring such comments as disturbing noises. So, do not worry because as per my experience, study, analyses, understanding and intuition, your business surely will be up-scaling to good heights; just remain focused and committed with perseverance to this particular line of business. I sincerely believe in Purpose-Concept-Integrity-Sincerity-Commitment Investing. In fact, it is very good to see an Indian female take up to Entrepreneurship with such good purpose supported by such novel product concept. This what i call as my way of investing in equity stocks.

Three pieces of advise for you pertaining to this business or for that matter any business:
1. Make sure that you manage your working capital very efficiently by confining your net working capital cycle to lower levels like maybe around just 25 days-30 days [not more than that].. Focus on this aspect very well and diligently [Manage your business debtors receivables average collection period within just 50 days of effecting sales i.e. date of raising your bill on the customer [you can ensure this by getting discounting of your customers’ accepted sales bills of exchange with some good bank i.e by availing Bill Discounting Credit Facility from the bank @ some cheap Interest Rate/Discount Rate of around 10% per annum. you must do this to ensure efficient working capital management]; Maintain and Manage average Inventory-Holding Period Levels to maximum 15 days-20 days and try obtaining average credit period of atleast about 65 days to 70 days from your suppliers [try bargaining on this by tactful negotiations with your suppliers], if possible. If not, try getting it upto maybe 40 days. Try on this.. see how it goes
2. Infuse some additional amount of long-term funds into working capital operations by way of Equity Capital and make sure you build it to the level to reach atleast 35% of your business’ Total Current Assets [excluding Cash-Bank balances] i.e. your average Net Working Capital amount should be maintained at atleast 35% of Total Current Assets at all times. Don’ let this go below this level by regular quarterly monitoring this parameter. In case of paucity of funds for Equity Capital, try garnering required long-term funds [shortfall/deficit] at favourable terms and conditions from Private Equity Firms who are willing to [who have firm faith and long-term commitment to this purpose and concept of business] buy equity stake in your business @ maybe around INR 80/- per share [i.e. @ PE multiple of 20 times approximately] with investment time horizon of atleast next three-four years and not more than next six years. Usually Private Equity investors look for investment time horizon of two years to five years and this can be decided through extensive negotiations wherein you reach a consensus upon Exit Clause for the Private Equity investor. If you want, i can try getting you connected to few of them in my network that i have limited acquaintances with. Reach me at [email protected]; [email protected]. At the end of this period of investment by PE investor, they will exit your business by selling equity stake at a premium of maybe around four times the original cost of investment. This equity stake can be sold as Offer for Sale [OFS] portion by the PE investor during an IPO [you can postpone your IPO till then but for now please put this IPO plan on hold till another next four years] or maybe sold off to some other Strategic Investor [like another PE Investor Firm-Company-Institutional Investor; or maybe an Angel Investor]
3. Do not go for any of bank borrowings at this point in time; abstain from it for next few years till the time you grow and upscale the business to higher levels of around INR 65 crore of annual sales

All of the aforesaid suggestions must be diligently implemented for your business and each of them will play key role in the successful sustained growth of your business in future.

All the very best !! In case, if you still decide to stick to your IPO plans at present, I still shall try investing in the stock of your company’s IPO to the extent possible within my limited means because i foresee a healthy growth future in your business [In fact, i am a salaried person doing a job [belonging to a middle-class family; am an avid and passionate analyser of Stocks and Stock Market and Economy as a whole].

Regards
Niraj Ganatra

Dear Namita Banka , If its really you, kudos to you for coming out and dicussing on this platform. To be honest the numbers put forth look above average, its just that you have chosen a wrong LM and thats going to hurt badly. If this was with anyone besides Aryaman who I am wondering why is still not blacklisted I would have definitely opted to invest in this IPO. For now this looks like a sinking ship….but I would love to be proved wrong..