SKP Securities has come out with a report on Edelweiss Capital IPO. Based on a strong outlook for the Indian economy, and growing investment banking business, the firm has recommended subscribe to the issue.
Edelweiss Capital, a diversified financial services company, is entering the capital market with its initial public offering (IPO) of 8,386,147 equity shares of Rs 5 each for cash, at a price to be decided through a 100% book building process.
The issue will open on November 15, 2007, and will close on November 20, 2007. The price band has been fixed between Rs 725 and Rs 825 per equity share of face value Rs 5.
SKP Securities report on Edelweiss Capital IPO
Investment Highlights:
Edelweiss Capital (ECL) is a diversified financial services company in India, providing investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to corporate, institutional and high net worth individual clients.
Key strengths:
An integrated financial services platform: ECL’s integrated service platform allows it to leverage relationships across lines of businesses by providing multi-channel delivery systems to its client base, thereby increasing its ability to cross-sell various services.
Research driven approach: ECL have a strong research platform consisting of fundamental and alternative research, catering to institutional and high net worth individual investors. Fundamental research covers approximately 190 companies, which represent approximately 69% of the market capitalization of all companies listed on the BSE. ECL's strength lies in identifying emerging investment themes that will drive economic activity, investments, growth and profitability of companies and showcasing them to its clients.
The objects of the issue are:
Enhancement of margin maintenance with Exchanges,
Establishment of additional offices and acquisition of office infrastructure,
Enhancement of existing technological capacity,
Prepayment of loans
Financial Performance (Consolidated) Uses and Source of Funds
Concerns:
* ECL’s business is highly dependent on the capital market. About 58% of the company’s income comes from institutional broking and investment banking businesses, followed by 31% from treasury operations. Difficult market conditions can adversely affect the business of ECL.
* ECL is subject to extensive securities regulation and any failure to comply with these regulations may lead to imposition of penalties or sanctions.
Recommendation:
ECL is an established brand and has a strong network of investor relationships. Based on a strong outlook for the Indian economy, and growing investment banking business, we recommend Subscribe to the issue.
Courtesy: moneycontrol.com
Tuesday, November 13, 2007
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