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Based in Cork, Ireland, Ardmore Shipping (NYSE:ASC) scheduled a $160 million IPO with a market capitalization of $288 million at a price point mid-range of $16, for Thursday, August 1, 2013.

Six other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

  • Manager, Joint Managers: Morgan Stanley; Jefferies; Clarkson Capital
  • Co-Managers: Fearnley Securities; Evercore; ABN AMRO (USA); DVB Capital

Summary

ASC provides oil tanker shipping services to major companies. ASC has never made any money and is engaged in a substantial expansion of its current 8 ships, to 24 ships by 2016.

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q1 '13

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Ardmore Shipping

$288

9.9

-180.0

1.1

1.1

56%

Glossary:

ASC has never made money, and is wholly dependent on the worldwide shipping market. There is no demonstrated track record of success.

Conclusion

Avoid the ASC IPO.

To put the above conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1 referenced below:

Business

ASC is incorporated in the Republic of the Marshall Islands. ASC ships petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies.

Fleet

The fleet consists of 12 vessels including eight in operation and four on order with deliveries expected to begin in January 2014. In addition, ASC has letters of intent for six vessels with deliveries expected to begin in November 2014 and options for an additional two vessels. ASC is currently in discussions for two newbuildings with deliveries expected to begin in November 2015, and intends to acquire two more secondhand vessels.

Management

ASC's wholly-owned subsidiary Ardmore Shipping Limited carries out management functions. ASL currently has a staff of 11 employees based in Cork, Ireland.

Use of proceeds

ASC expects to net $147 million from its IPO. Proceeds are allocated to fleet expansion.

Disclaimer: This ASC IPO report is based on a reading and analysis of ASC's F-1A filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Ardmore Shipping