Gammon Infra, a subsidiary of Gammon India, is coming out with an initial public offering on March 10, 2008 at a price band of Rs 167-200 per share. The issue will close for subscription on March 13, reports CNBC-TV18
Source: Moneycontrol.com
Friday, February 29, 2008
Thursday, February 28, 2008
Manjushree Extrusions ends with 7.7% premium
Manjushree Extrusions has surged to an intraday high of Rs 66 before closing the day with a gain of Rs 7.7 or 17.11% at Rs 52.70 as against offer price of Rs 45. It traded with volumes of 3,15,92,603 shares. It has touched a low of Rs 47 though opened at Rs 48 on the BSE.
Vimal Kedia, Managing Director of Manjushree Extrusions says 70% of expansion already done and full growth is expected for the coming financial year.
Speaking to CNBC-TV18 Kedia said, “We foresee our topline to grow by 50% and the bottomline by 100%. We should be achieving Rs 130 crore of turnover during next year.”
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
Vimal Kedia, Managing Director of Manjushree Extrusions says 70% of expansion already done and full growth is expected for the coming financial year.
Speaking to CNBC-TV18 Kedia said, “We foresee our topline to grow by 50% and the bottomline by 100%. We should be achieving Rs 130 crore of turnover during next year.”
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
Manjushree Extrusions debuts with 6.67% premium
Manjushree Extrusions has listed with 6.67% premium at Rs 48 as against its issue price of Rs 45. The stock went up to a high of Rs 66 in early trade on the back of buying support though it touched a low of Rs 47.
It was trading at Rs 62.70, up by 39.33% or Rs 17.70, with volumes of 17,04,101 shares on the BSE, at 9:58 am.
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
It was trading at Rs 62.70, up by 39.33% or Rs 17.70, with volumes of 17,04,101 shares on the BSE, at 9:58 am.
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
Wednesday, February 27, 2008
Manjushree Extrusions to list on Feb 28
Manjushree Extrusions will list on the BSE with its equity shares on February 28, 2008. The offer price is at Rs 45 per share.
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
It is already listed on Ahmedabad, Calcutta, and Guwahati Stock Exchanges.
The company intended to utilise the funds to part finance its expansion cum diversification project at a cost of Rs 53.70 crore, which is presently under implementation. A term loan of Rs 18 crore has been sanctioned by SBI for the project.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
The company had come out with its follow on public offer of 51,26,100 equity shares of Rs 10 each for cash at a premium of Rs 35 per share and collected nearly Rs 23.07 crore.
It is already listed on Ahmedabad, Calcutta, and Guwahati Stock Exchanges.
The company intended to utilise the funds to part finance its expansion cum diversification project at a cost of Rs 53.70 crore, which is presently under implementation. A term loan of Rs 18 crore has been sanctioned by SBI for the project.
Manjushree provides packaging solutions through manufacture of speciality plastic packaging products for multinational companies with whom the company enjoys a preferred supplier status, in FMCG, pharma, food processing and agrochemical sectors through an ongoing process of research oriented design and development.
Source: Moneycontrol.com
Tuesday, February 26, 2008
Latest IPO Grey Market Premium Dt: 26th Feb. 2008
| Company | Open/Close | Offer Price | Premium | Kostak Rates |
|---|---|---|---|---|
| Rural Electrification | 19 Feb - 22 Feb | 90 to 105 | 25 to 27 | ------- |
| V-Guard Industries Limited | 18 Feb - 21 Feb | 80 to 85 | 12 to 15 | ------- |
| GSS America | 11 Feb - 15 Feb | 400 to 440 | Discount | ------- |
| Manjushree | 31 Jan - 06 Feb | 45 | 6 to 7 | ------- |
Monday, February 25, 2008
L&T Infotech listing deferred to 2009
Indian engineering firm Larsen & Toubro Monday said it has rescheduled the initial public offering of unit L&T Infotech to 2009, reports CNBC-TV18 quoting NW18.
"We are not in a hurry and we will not get the required valuation in the present market conditions. So we have postponed it," Chairman and Managing Director A M Naik told reporters on the sidelines of a company event.
The IPO was originally scheduled for late this year, 2008.
Naik said also that the likely slowdown in the global economy isn't worrying the company's infotech division. "We are growing faster than any other mid-sized software company," he said.
Source: Moneycontrol.com
"We are not in a hurry and we will not get the required valuation in the present market conditions. So we have postponed it," Chairman and Managing Director A M Naik told reporters on the sidelines of a company event.
The IPO was originally scheduled for late this year, 2008.
Naik said also that the likely slowdown in the global economy isn't worrying the company's infotech division. "We are growing faster than any other mid-sized software company," he said.
Source: Moneycontrol.com
Reliance Power crosses IPO price of Rs 450
Reliance Power, which made history in Indian capital market by raising more than Rs 11,000 crore from initial public offer in January, crossed its issue price of Rs 450 today as it slipped below issue price since listing day and did not recover.
The stock has touched an intraday high of Rs 451 and an intraday low of Rs 421.40.
At 2:21 pm the share was quoting at Rs 448, up Rs 31.15, or 7.47%, with volumes of 1,23,22,550 shares. On Friday, the share closed down 1.21% or Rs 5.10 at Rs 416.85.
Promoter of Reliance Power, Anil Dhirubhai Ambani has announced bonus in the ratio of 3:5 (three shares for five shares held) yesterday in the conference. Record date will be announced soon. Now the person who got allotment at Rs 430, will get new price of Rs 269 per share. This news has started benefiting the stock in terms of recovery as it crossed Rs 400 mark on February 18 and today touched Rs 450, issue price.
The share had listed, on the BSE, at Rs 547.80 and touched a high of Rs 599.90 on February 11, 2008. But negative sentiment in markets and long gestation period of projects, both these factors impacted the stock on listing day and on subsequent days. It had touched a low of Rs 389 on listng day and 52-week low of Rs 332.50.
Reliance Power had entered capital market with a public issue of 26 crore equity shares of Rs 10 each (22.8 crore shares for public and 3.2 crore shares for promoters) at a price band of Rs 405-450. The company raised Rs 11,700 crore from this issue, which will be used for upcoming power projects.
Source: Moneycontrol.com
The stock has touched an intraday high of Rs 451 and an intraday low of Rs 421.40.
At 2:21 pm the share was quoting at Rs 448, up Rs 31.15, or 7.47%, with volumes of 1,23,22,550 shares. On Friday, the share closed down 1.21% or Rs 5.10 at Rs 416.85.
Promoter of Reliance Power, Anil Dhirubhai Ambani has announced bonus in the ratio of 3:5 (three shares for five shares held) yesterday in the conference. Record date will be announced soon. Now the person who got allotment at Rs 430, will get new price of Rs 269 per share. This news has started benefiting the stock in terms of recovery as it crossed Rs 400 mark on February 18 and today touched Rs 450, issue price.
The share had listed, on the BSE, at Rs 547.80 and touched a high of Rs 599.90 on February 11, 2008. But negative sentiment in markets and long gestation period of projects, both these factors impacted the stock on listing day and on subsequent days. It had touched a low of Rs 389 on listng day and 52-week low of Rs 332.50.
Reliance Power had entered capital market with a public issue of 26 crore equity shares of Rs 10 each (22.8 crore shares for public and 3.2 crore shares for promoters) at a price band of Rs 405-450. The company raised Rs 11,700 crore from this issue, which will be used for upcoming power projects.
Source: Moneycontrol.com
Tulsi Extrusions jumps 69% over offer price
Tulsi Extrusions, a manufacturer of PVC pipes, has surged to a new high of Rs 143.45 before closing the day at Rs 139.50, up by Rs 54.5 or 64.12% over its offer price of Rs 85. It traded with volumes of 3,62,33,746 shares on the BSE.
The stock opened at Rs 93.45, which is its intraday low and remained above Rs 100 through the day.
The BSE and NSE volume is nearly six times its total issue size of 1,24,95,100 shares.
In an interview with CNBC-TV18, Pradip Mundhra, Managing Director said, the company would achieve sales of Rs 138 crore in 2009 and the PAT will be around Rs 15 crore.
On the NSE, the stock closed at Rs 140.85, up 65.71% or Rs 55.85, with volumes of 3,67,91,341 shares. It has opened at Rs 99 and touched a high of Rs 144.50. The turnover for the day at Rs 477 crore.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
Source: Moneycontrol.com
The stock opened at Rs 93.45, which is its intraday low and remained above Rs 100 through the day.
The BSE and NSE volume is nearly six times its total issue size of 1,24,95,100 shares.
In an interview with CNBC-TV18, Pradip Mundhra, Managing Director said, the company would achieve sales of Rs 138 crore in 2009 and the PAT will be around Rs 15 crore.
On the NSE, the stock closed at Rs 140.85, up 65.71% or Rs 55.85, with volumes of 3,67,91,341 shares. It has opened at Rs 99 and touched a high of Rs 144.50. The turnover for the day at Rs 477 crore.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
Source: Moneycontrol.com
IRB Infrastructure closes above issue price
IRB Infrastructure has closed the day at Rs 189.65, which is just above its issue price of Rs 185, up 2.51% or Rs 4.65, with volumes of 2,25,21,617 shares. It touched a high/low of Rs 200 and Rs 168 during the day. The turnover was at Rs 416 crore on the NSE.
In an interview with CNBC-TV18, VD Mhaiskar, CMD of IRB Infrastructre and Developers, said he sees FY09 sales at Rs 1,300 crore and PAT at Rs 310 crore. He sees FY08 sales at Rs 750 crore and PAT at Rs 110 crore. Their current order book at Rs 6,000 crore.
On the BSE, the stock opened at Rs 170.05, and touched a high/low of Rs 209 and Rs 167.30, respectively. It surged 2.19% to close at Rs 189.05, with volumes of 1,60,78,796 shares.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
Source: Moneycontrol.com
In an interview with CNBC-TV18, VD Mhaiskar, CMD of IRB Infrastructre and Developers, said he sees FY09 sales at Rs 1,300 crore and PAT at Rs 310 crore. He sees FY08 sales at Rs 750 crore and PAT at Rs 110 crore. Their current order book at Rs 6,000 crore.
On the BSE, the stock opened at Rs 170.05, and touched a high/low of Rs 209 and Rs 167.30, respectively. It surged 2.19% to close at Rs 189.05, with volumes of 1,60,78,796 shares.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
Source: Moneycontrol.com
Sunday, February 24, 2008
Reliance Power Ltd sets 3-for-5 bonus share
Reliance Power Ltd on Sunday set a 3-for-5 bonus share issue in an attempt to cheer shareholders after a miserable debut following a record $3 billion initial public offer.
Shareholders other than the founders will receive three bonus shares for every five held, effectively reducing the cost of the shares to Rs 269 for retail shareholders compared to a discounted IPO price of Rs 430.
For institutions, the bonus issue would cut the price to Rs 281 a share compared to an IPO price of 450 rupees.
Chairman Anil Ambani on Sunday said he was also giving up 2.6 percent of his shareholding in Reliance Power to Reliance Energy Ltd, which owns about 45 per cent in Reliance Power, so its ownership structure remains intact.
A proposed IPO for another group company was on track subject to market conditions, he said.
"We've seen very turbulent conditions in the global and Indian capital Markets," he said at a news conference.
"The Reliance Power IPO closed at a time when the market was close to an all-time high. But clearly, since then there has been turbulence in the Markets," he said.
"After considering these adverse changes, we have decided on a bonus issue to protect the interests of long-term investors."
The Reliance Power offer was fully subscribed within a minute of its opening and had attracted bids worth $190 billion from over 4 million investors in January, just days before stock Markets worldwide went into a tailspin.
India's benchmark 30-share BSE index is down 18 per cent from a record high of 21,206.77 hit on Jan. 10.
Shares in Reliance Power dived 17 per cent on their trading debut on Feb. 11.
News that the company would consider bonus shares or other measures had lifted sentiment last week. But at Friday's close they were still more than 7 per cent below the IPO price.
The slump in Reliance Power, a unit of the Anil Dhirubhai Ambani group, had irked investors who complained they were lured to invest by promises from the firm, which has no operating power plants and is unlikely to report strong profits for five years.
The company has reminded investors that there were risks attached to equity investments, and has said its shares were hit by weak market sentiment. It also blamed unidentified rivals.
The turbulent market has recently forced three firms to shelve their IPOs, including a $1.6.
Source: Financial Express
Shareholders other than the founders will receive three bonus shares for every five held, effectively reducing the cost of the shares to Rs 269 for retail shareholders compared to a discounted IPO price of Rs 430.
For institutions, the bonus issue would cut the price to Rs 281 a share compared to an IPO price of 450 rupees.
Chairman Anil Ambani on Sunday said he was also giving up 2.6 percent of his shareholding in Reliance Power to Reliance Energy Ltd, which owns about 45 per cent in Reliance Power, so its ownership structure remains intact.
A proposed IPO for another group company was on track subject to market conditions, he said.
"We've seen very turbulent conditions in the global and Indian capital Markets," he said at a news conference.
"The Reliance Power IPO closed at a time when the market was close to an all-time high. But clearly, since then there has been turbulence in the Markets," he said.
"After considering these adverse changes, we have decided on a bonus issue to protect the interests of long-term investors."
The Reliance Power offer was fully subscribed within a minute of its opening and had attracted bids worth $190 billion from over 4 million investors in January, just days before stock Markets worldwide went into a tailspin.
India's benchmark 30-share BSE index is down 18 per cent from a record high of 21,206.77 hit on Jan. 10.
Shares in Reliance Power dived 17 per cent on their trading debut on Feb. 11.
News that the company would consider bonus shares or other measures had lifted sentiment last week. But at Friday's close they were still more than 7 per cent below the IPO price.
The slump in Reliance Power, a unit of the Anil Dhirubhai Ambani group, had irked investors who complained they were lured to invest by promises from the firm, which has no operating power plants and is unlikely to report strong profits for five years.
The company has reminded investors that there were risks attached to equity investments, and has said its shares were hit by weak market sentiment. It also blamed unidentified rivals.
The turbulent market has recently forced three firms to shelve their IPOs, including a $1.6.
Source: Financial Express
Friday, February 22, 2008
IPO Grey Market Premium Rates Dt: 22 Feb 2008
| Company | Open/Close | Offer Price | Premium | Kostak Rates |
|---|---|---|---|---|
| Rural Electrification | 19 Feb - 22 Feb | 90 to 105 | 20 to 21 | 1800 to 2000 |
| V-Guard Industries Limited | 18 Feb - 21 Feb | 80 to 85 | 14 to 16 | ------- |
| GSS America | 11 Feb - 15 Feb | 400 to 440 | Discount | ------- |
| Manjushree | 31 Jan - 06 Feb | 45 | 5 to 7 | ------- |
| Tulsi Extrusions Limited | 01 Feb - 05 Feb | 80 to 85 | 10 to 11 | ------- |
| IRB Infrastructure Developers Limited | 31 Jan - 05 Feb | 185 to 220 | 12 to 16 | ------- |
REC IPO subscribed 27.3 times
The IPO of the state-run Rural Electrification Corporation (REC) got subscribed 27.30 times with an overwhelming bidding for 426.2 crore equity shares till 5 pm. The issue closes today for subscription. Bids for 24.08 crore equity shares have received at the cut off price.
The investor confidence in the IPO can be gauged from the response that it has generated across the board. The QIB portion was subscribed by 6.51 times, retail by 0.79 times and HNI 0.75 times till yesterday. Even the employee quota was subscribed 0.71 times on the penultimate day of the IPO.
REC entered the capital markets with a public issue of 156,120,000 Equity Shares of Rs. 10 each through 100% book building process with a price band of Rs 90-Rs 105.
The Issue shall constitute approximately 18.18% of the fully diluted post-issue capital of REC. The Issue closes on February 22, 2008. IL & FS Investsmart Securities Limited, ICICI Securities Limited and SBI Capital Markets Limited are the Book Running Lead Managers for the Issue. The Equity Shares are proposed to be listed on the NSE and the BSE.
The Company proposes to utilize the net proceeds from the fresh issue to augment its capital base to improve its borrowing capacity in order to support the future growth in its assets.
REC is one of the leading public financial institutions in Indian power infrastructure, engaged in the financing and promotion of transmission, distribution and generation projects throughout India.
The government's Eleventh Plan (2008-2012) anticipates a substantial increase in the country's power capacity. The Ministry of Power's data shows that India's power generation system, as on March 31, 2007, had a total installed capacity of 132,330 MW and an additional 78,577MW are required to meet the projected demand during the plan period. Thus, the overall fund requirement by 2012 for the sector has been estimated at a whopping Rs 10,316,000 million.
Source: Moneycontrol.com
The investor confidence in the IPO can be gauged from the response that it has generated across the board. The QIB portion was subscribed by 6.51 times, retail by 0.79 times and HNI 0.75 times till yesterday. Even the employee quota was subscribed 0.71 times on the penultimate day of the IPO.
REC entered the capital markets with a public issue of 156,120,000 Equity Shares of Rs. 10 each through 100% book building process with a price band of Rs 90-Rs 105.
The Issue shall constitute approximately 18.18% of the fully diluted post-issue capital of REC. The Issue closes on February 22, 2008. IL & FS Investsmart Securities Limited, ICICI Securities Limited and SBI Capital Markets Limited are the Book Running Lead Managers for the Issue. The Equity Shares are proposed to be listed on the NSE and the BSE.
The Company proposes to utilize the net proceeds from the fresh issue to augment its capital base to improve its borrowing capacity in order to support the future growth in its assets.
REC is one of the leading public financial institutions in Indian power infrastructure, engaged in the financing and promotion of transmission, distribution and generation projects throughout India.
The government's Eleventh Plan (2008-2012) anticipates a substantial increase in the country's power capacity. The Ministry of Power's data shows that India's power generation system, as on March 31, 2007, had a total installed capacity of 132,330 MW and an additional 78,577MW are required to meet the projected demand during the plan period. Thus, the overall fund requirement by 2012 for the sector has been estimated at a whopping Rs 10,316,000 million.
Source: Moneycontrol.com
What experts say about IRB Infra, Tulsi Extru listings?
Market has not yet stabilised with good momentum, volume is still half of what we were seeing before this weakness. Primary market is also slowly showing some signs of recovery but not with great enthusiasm. The stocks, which have been listing, are not getting good response from investors post listing.
On Monday, there are two listings, IRB Infrastructure Developers and Tulsi Extrusions. Experts believe that both the issues are expected to list around its issue price.
R S Iyer of K R Choksey Securities says, "IRB Infrastructure is expected to list at around its issue price of Rs 185. Investors should sell the stock with gain of 10% at least. Otherwise, they can hold the stock for better price in near term."
"Tulsi Extrusions is expected to list at around its issue price of Rs 85. Investors should sell the stock with gain of 10% at least. Otherwise, they can hold the stock for better price in near term", he said.
According to Investment Advisor, S P Tulsian, "IRB Infra is likely to list at Rs 180 as against its issue price of Rs 185. One can sell the stock on listing.
"Tulsi Extrusions is likely to go above Rs 85 and even Rs 100 during the day", he said.
IRB Infrastructure Developers
The stock will start trading in F&O market and the permitted lot size of 1100.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
Tulsi Extrusions
Tulsi Extrusions is into manufacturing of PVC pipes and fittings for the irrigation, industrial, infrastructure and housing sector.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
Source: Moneycontrol.com
On Monday, there are two listings, IRB Infrastructure Developers and Tulsi Extrusions. Experts believe that both the issues are expected to list around its issue price.
R S Iyer of K R Choksey Securities says, "IRB Infrastructure is expected to list at around its issue price of Rs 185. Investors should sell the stock with gain of 10% at least. Otherwise, they can hold the stock for better price in near term."
"Tulsi Extrusions is expected to list at around its issue price of Rs 85. Investors should sell the stock with gain of 10% at least. Otherwise, they can hold the stock for better price in near term", he said.
According to Investment Advisor, S P Tulsian, "IRB Infra is likely to list at Rs 180 as against its issue price of Rs 185. One can sell the stock on listing.
"Tulsi Extrusions is likely to go above Rs 85 and even Rs 100 during the day", he said.
IRB Infrastructure Developers
The stock will start trading in F&O market and the permitted lot size of 1100.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
Tulsi Extrusions
Tulsi Extrusions is into manufacturing of PVC pipes and fittings for the irrigation, industrial, infrastructure and housing sector.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
Source: Moneycontrol.com
Future Ventures files IPO papers with Sebi
Future Group company, Future Ventures has filed DRHP for IPO with the market regulator, Sebi. The company will issue 373.6 crore shares of Rs 10 face value through 100% book built issue.
It is planning to raise Rs 3736 crore. Net issue to the public will be of 266.07 crore equity shares and reservation of upto 25 crore equity shares for eligible shareholders of Pantaloon Retail (India).
The net issue would constitute 66.52% of the post issue paid up capital of the Company.
Source: Moneycontrol.com
It is planning to raise Rs 3736 crore. Net issue to the public will be of 266.07 crore equity shares and reservation of upto 25 crore equity shares for eligible shareholders of Pantaloon Retail (India).
The net issue would constitute 66.52% of the post issue paid up capital of the Company.
Source: Moneycontrol.com
Thursday, February 21, 2008
V-Guard Industries IPO subscribed 2.7 times
V-Guard Industries has received good response for its initial public offer (IPO) of 80,00,000 equity shares of Rs 10 each, subscribed 2.65 times, till 4 pm as per data available on the NSE. Public issue received bids for 2.12 crore equity shares as against shares on offer.
The issue received a response from QIBs with oversubscription of 1.65 times followed by non-institutional portions with 1.76 times subscription, till yesterday.
The price band is between Rs 80-85 per equity share. The net issue to the public comprises of 76,00,000 equity shares and 4,00,000 equity shares have been reserved for the employees.
The capital raised from the issue will be deployed to set up Cable manufacturing facilities in Coimbatore and Uttaranchal, Enameling Plant at Coimbatore, Development and Pilot Productions Plants for water Heaters, Fans and Pumps at Himachal Pradesh and Coimbatore, Service and Distribution Centers at Bangalore, Hubli and Vijaywada.
Anand Rathi Securities Limited is the book running lead manager to the IPO and Intime Spectrum Registry Limited is the registrar to the issue.
The shares will be listed on Bombay Stock Exchange and National Stock Exchange of India.
V-Guard Industries is engaged in the manufacturing and marketing of Electronic Voltage Stabilizers, Monobloc, Jet, Submersible, Compressor pumps and Electric Motors, Insulated Electrical Cables (House Wiring, Industrial), Electric Storage & Instant Water Heaters, Solar Water Heaters, UPS, Electric Fans and is also in generation of Power in a small way.
Source: Moneycontrol.com
The issue received a response from QIBs with oversubscription of 1.65 times followed by non-institutional portions with 1.76 times subscription, till yesterday.
The price band is between Rs 80-85 per equity share. The net issue to the public comprises of 76,00,000 equity shares and 4,00,000 equity shares have been reserved for the employees.
The capital raised from the issue will be deployed to set up Cable manufacturing facilities in Coimbatore and Uttaranchal, Enameling Plant at Coimbatore, Development and Pilot Productions Plants for water Heaters, Fans and Pumps at Himachal Pradesh and Coimbatore, Service and Distribution Centers at Bangalore, Hubli and Vijaywada.
Anand Rathi Securities Limited is the book running lead manager to the IPO and Intime Spectrum Registry Limited is the registrar to the issue.
The shares will be listed on Bombay Stock Exchange and National Stock Exchange of India.
V-Guard Industries is engaged in the manufacturing and marketing of Electronic Voltage Stabilizers, Monobloc, Jet, Submersible, Compressor pumps and Electric Motors, Insulated Electrical Cables (House Wiring, Industrial), Electric Storage & Instant Water Heaters, Solar Water Heaters, UPS, Electric Fans and is also in generation of Power in a small way.
Source: Moneycontrol.com
IRB Infrastructure, Tulsi Extrusions to list on Feb 25
IRB Infrastructure Developers and Tulsi Extrusions will list on the bourses with equity shares on February 25, 2008. They have been fixed the issue price at Rs 185 and Rs 85 per equity share, respectively.
IRB Infrastructure Developers
The stock will start trading in F&O market and the permitted lot size of 1100.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
The company's IPO was subscribed over 4.3 times. The QIB portion was subscribed 6.4 times and HNI 1.6 times. The retail and employee portions were too nearly fully subscribed at 0.99 and 0.94 times. Deutsche Equities India Private Ltd is the Sole Global Coordinator and BRLM for the Issue and Kotak Mahindra Capital Co. Ltd is the Co-BRLM for the issue.
The issue constituted 15.36% of the fully diluted post Issue paid-up capital of the Company. The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.
IRB Infrastructure Developers Limited is the holding company of the IRB Group. IRB Infrastructure Developers is currently involved in 12 BOT projects in the roads and highways sector.
In fiscal 2007, the consolidated total income of the company was Rs 325.08 crore and it earned consolidated net profit, as restated, of Rs 29.96 crore. In the five months ended August 31, 2007, consolidated total income was Rs 285.26 crore and it earned consolidated net profit, as restated, of Rs 36.38 crore in this period.
Tulsi Extrusions
Tulsi Extrusions, PVC pipes and fittings manufacturer for the irrigation, industrial, infrastructure and housing sector, has been fixed offer price of Rs 85 per share.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
It got subscribed 2.08 times. QIBs portion subscribed 1.54 times, HNIs 3.11 times and Retail category 2.46 times.
The proceeds from the proposed IPO will be used to expand their manufacturing facilities at Jalgaon, to meet their long-term working capital requirements, purchasing of branch offices, provision of contingencies, general corporate purposes and to meet the issue expenses.
The issue is lead managed by Almondz Global Securities Ltd and the registrar to the issue is Intime Spectrum Registry Ltd.
Source: Moneycontrol.com
IRB Infrastructure Developers
The stock will start trading in F&O market and the permitted lot size of 1100.
IRB Infrastructure had entered the capital markets on January 31, 2008 with a public issue of 5,10,57,666 equity shares of Rs 10 each through 100% book building process and with a price band of Rs 185 to Rs 220.
The company's IPO was subscribed over 4.3 times. The QIB portion was subscribed 6.4 times and HNI 1.6 times. The retail and employee portions were too nearly fully subscribed at 0.99 and 0.94 times. Deutsche Equities India Private Ltd is the Sole Global Coordinator and BRLM for the Issue and Kotak Mahindra Capital Co. Ltd is the Co-BRLM for the issue.
The issue constituted 15.36% of the fully diluted post Issue paid-up capital of the Company. The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange.
IRB Infrastructure Developers Limited is the holding company of the IRB Group. IRB Infrastructure Developers is currently involved in 12 BOT projects in the roads and highways sector.
In fiscal 2007, the consolidated total income of the company was Rs 325.08 crore and it earned consolidated net profit, as restated, of Rs 29.96 crore. In the five months ended August 31, 2007, consolidated total income was Rs 285.26 crore and it earned consolidated net profit, as restated, of Rs 36.38 crore in this period.
Tulsi Extrusions
Tulsi Extrusions, PVC pipes and fittings manufacturer for the irrigation, industrial, infrastructure and housing sector, has been fixed offer price of Rs 85 per share.
The company had come out with public issue issue of 57,00,000 equity shares of Rs 10 each during February 1 and February 5, 2008. The price band for the issue was between Rs 80 and Rs 85.
It got subscribed 2.08 times. QIBs portion subscribed 1.54 times, HNIs 3.11 times and Retail category 2.46 times.
The proceeds from the proposed IPO will be used to expand their manufacturing facilities at Jalgaon, to meet their long-term working capital requirements, purchasing of branch offices, provision of contingencies, general corporate purposes and to meet the issue expenses.
The issue is lead managed by Almondz Global Securities Ltd and the registrar to the issue is Intime Spectrum Registry Ltd.
Source: Moneycontrol.com
Wednesday, February 20, 2008
Bang Overseas slips 15% below issue price
Bang Overseas, a provider of fashion fabrics and ready-to-wear requirements in apparel, textile and retail segment, has plunged nearly by 19% at Rs 168.55 in an intraday trade before closing the day at Rs 174.10, down by 15.89% or Rs 32.90 as against its issue price of Rs 207. The stock has managed to open on a positive note in morning trade at Rs 250 and touched a high of Rs 269.90 but selling pressure across the markets hammered the stock a lot during the day.
It traded with volumes of 1,38,77,098 shares and the turnover was at Rs 272 crore on the NSE.
In an exclusive interview with CNBC-TV18, Brijgopal Bang, MD, Bang Overseas said that they will do Rs 300 crore in sales with a PAT of Rs 30 crore in FY09. He added that they will increase their retail stores by 100. According to him, textile and garments accounts by 50% each to revenues and that in FY09, garments will contribute by 65%.
They also said that the per day production capacity is set to increase to 40,000 pieces by the end of the year. He added that their exports are mainly to European markets and that they are growing by 50-80%.
On the BSE, the stock has opened at Rs 207; touched a high/low of Rs 260 and Rs 166.50, respectively. It closed at Rs 171.80, with volumes of 1,66,44,840 shares.
It had entered capital market with a public issue of 35 lakh shares at a price band of Rs 200-207 per share. The issue got subscribed 1.24 times.
Source: Moneycontrol.com
It traded with volumes of 1,38,77,098 shares and the turnover was at Rs 272 crore on the NSE.
In an exclusive interview with CNBC-TV18, Brijgopal Bang, MD, Bang Overseas said that they will do Rs 300 crore in sales with a PAT of Rs 30 crore in FY09. He added that they will increase their retail stores by 100. According to him, textile and garments accounts by 50% each to revenues and that in FY09, garments will contribute by 65%.
They also said that the per day production capacity is set to increase to 40,000 pieces by the end of the year. He added that their exports are mainly to European markets and that they are growing by 50-80%.
On the BSE, the stock has opened at Rs 207; touched a high/low of Rs 260 and Rs 166.50, respectively. It closed at Rs 171.80, with volumes of 1,66,44,840 shares.
It had entered capital market with a public issue of 35 lakh shares at a price band of Rs 200-207 per share. The issue got subscribed 1.24 times.
Source: Moneycontrol.com
Shriram EPC ends 4.5% below issue price
Shriram EPC has closed the day at Rs 286.50, with a modest loss of Rs 13.50 or 4.5% over its offer price of Rs 300 after hitting an intraday high and low of Rs 377 and Rs 251, respectively on the NSE. The turnover stood at Rs 296 crore and the stock traded with volumes of 95,92,674 shares. The stock was opened at Rs 320.
T Shivaraman, MD & CEO, Shriram EPC said that their sales for FY09 are pegged at Rs 1500 crore with a PAT of Rs 60 crore. He added that the company will grow by 100% in this year as well.
Speaking to CNBC-TV18, Shivaraman said that their order book currently stands at Rs 2200 crore and added that they are being selective on orders to maintain margins.
The stock settled at Rs 293.60, with volumes of 1,04,22,196 shares. It has hit a high/low of Rs 374.70 and Rs 281.05.
Shriram EPC had come out with public issue of 50 lakh shares at a price band of Rs 290-330 per share. It got subscribed 3.91 times.
Source: Moneycontrol.com
T Shivaraman, MD & CEO, Shriram EPC said that their sales for FY09 are pegged at Rs 1500 crore with a PAT of Rs 60 crore. He added that the company will grow by 100% in this year as well.
Speaking to CNBC-TV18, Shivaraman said that their order book currently stands at Rs 2200 crore and added that they are being selective on orders to maintain margins.
The stock settled at Rs 293.60, with volumes of 1,04,22,196 shares. It has hit a high/low of Rs 374.70 and Rs 281.05.
Shriram EPC had come out with public issue of 50 lakh shares at a price band of Rs 290-330 per share. It got subscribed 3.91 times.
Source: Moneycontrol.com
Apply for REC with medium term view
Keynore Capitals has come out with research report on Rural Electrification Corporation, REC IPO. It has recommended a subscribe to the issue with a medium term view.
REC has opened for subscription with a public issue of 15.6 crore equity shares of Rs 10 each at a price band of Rs 90-105 and the issue will close on February 22, 2008.
Keynore Capitals report on Rural Electrification Corporation IPO
* REC is a leading power sector focused, public financial institution and NBFC. It finances power projects in power generation, transmission and distribution, throughout India. It has been designated as the nodal agency by the Government of India (GOI) for Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY).
* Loan disbursements grew at a CAGR of 78.3% during FY04-07.
* The transmission and distribution (T&D) sector accounted for 85% of disbursements. Public sector lending formed 97% of overall lending in FY07. NIM stood at 3.8% in H1-FY08. REC’s role as an instrument of government policy results in low cost of borrowings.
* The 11th Plan envisages power demand of 78,577MW, with funds requirement of Rs 10,316 billion. This will translate into huge need of funds for investment in the power sector. Being the leading and exclusive provider of power finance in the country, REC expects to fund approx. 20% of the aggregate funds requirement.
* Comparison with closest peer PFC reveals the following
- Both exclusively fund the power sector
- NPAs for REC is 1.9% which is higher vis-Ã -vis 0.06% for PFC
- Debt-equity ratio of 7.3x, vis-Ã -vis 3.4x for PFC. (maximum permissible 12x)
- Average cost of funds for REC is 6.5% vis-Ã -vis 7.3% for PFC
* We believe there is scope for value creation / unlocking going forward, through recently set up, wholly-owned subsidiaries in transmission and distribution, which would undertake more profitable businesses.
* REC Power Distribution Co. Ltd., which provides consultancy services, recently won a Rs12.5Cr order from Punjab State Electricity Board (PSEB) for consultancy work. As per media reports, REC is also likely to acquire a 5% stake in Indian Energy Exchange, which is proposed to launched soon.
* The IPO is reasonably priced at p/b of 1.7xFY08E, 1.4xFY09E and 1.1xFY10E vis-Ã -vis PFC (p/b of 2.3xFY08E, 2.0xFY09E and 1.1xFY10E). It is attractively priced at p/e of 9.8xFY08E, 7.5xFY09E and 6.1xFY10E compared to its peers PFC and leading lending institution IDFC. We recommend subscribing with a medium term view.
Investment Concerns
* Any change in the Government and / or political instability could affect economic conditions in the country and the sector too.
* India’s inability to achieve the targets of capacity addition would lead to reduced financing opportunities. During the 10th plan, capacity added was 21,110 MW, which was just 51.7% of the targeted 41,110 MW.
* Being a power financing institution, any negative trends in the power sector could adversely affect its business operations.
* Any volatility in interest rates will have adverse impact on business operations.
* If there is withdrawal of the benefit of Sec. 54EC of the Income Tax Act, it would increase the cost of funds leading to a hit on NIM.
* Top 10 borrowers accounted for 52.7% of total outstanding loans. Any negative trends or financial difficulties particularly among large borrowers could increase the level of NPAs.
* It has reported negative cash flows from operations since FY03.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Source: Moneycontrol.com
REC has opened for subscription with a public issue of 15.6 crore equity shares of Rs 10 each at a price band of Rs 90-105 and the issue will close on February 22, 2008.
Keynore Capitals report on Rural Electrification Corporation IPO
* REC is a leading power sector focused, public financial institution and NBFC. It finances power projects in power generation, transmission and distribution, throughout India. It has been designated as the nodal agency by the Government of India (GOI) for Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY).
* Loan disbursements grew at a CAGR of 78.3% during FY04-07.
* The transmission and distribution (T&D) sector accounted for 85% of disbursements. Public sector lending formed 97% of overall lending in FY07. NIM stood at 3.8% in H1-FY08. REC’s role as an instrument of government policy results in low cost of borrowings.
* The 11th Plan envisages power demand of 78,577MW, with funds requirement of Rs 10,316 billion. This will translate into huge need of funds for investment in the power sector. Being the leading and exclusive provider of power finance in the country, REC expects to fund approx. 20% of the aggregate funds requirement.
* Comparison with closest peer PFC reveals the following
- Both exclusively fund the power sector
- NPAs for REC is 1.9% which is higher vis-Ã -vis 0.06% for PFC
- Debt-equity ratio of 7.3x, vis-Ã -vis 3.4x for PFC. (maximum permissible 12x)
- Average cost of funds for REC is 6.5% vis-Ã -vis 7.3% for PFC
* We believe there is scope for value creation / unlocking going forward, through recently set up, wholly-owned subsidiaries in transmission and distribution, which would undertake more profitable businesses.
* REC Power Distribution Co. Ltd., which provides consultancy services, recently won a Rs12.5Cr order from Punjab State Electricity Board (PSEB) for consultancy work. As per media reports, REC is also likely to acquire a 5% stake in Indian Energy Exchange, which is proposed to launched soon.
* The IPO is reasonably priced at p/b of 1.7xFY08E, 1.4xFY09E and 1.1xFY10E vis-Ã -vis PFC (p/b of 2.3xFY08E, 2.0xFY09E and 1.1xFY10E). It is attractively priced at p/e of 9.8xFY08E, 7.5xFY09E and 6.1xFY10E compared to its peers PFC and leading lending institution IDFC. We recommend subscribing with a medium term view.
Investment Concerns
* Any change in the Government and / or political instability could affect economic conditions in the country and the sector too.
* India’s inability to achieve the targets of capacity addition would lead to reduced financing opportunities. During the 10th plan, capacity added was 21,110 MW, which was just 51.7% of the targeted 41,110 MW.
* Being a power financing institution, any negative trends in the power sector could adversely affect its business operations.
* Any volatility in interest rates will have adverse impact on business operations.
* If there is withdrawal of the benefit of Sec. 54EC of the Income Tax Act, it would increase the cost of funds leading to a hit on NIM.
* Top 10 borrowers accounted for 52.7% of total outstanding loans. Any negative trends or financial difficulties particularly among large borrowers could increase the level of NPAs.
* It has reported negative cash flows from operations since FY03.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Source: Moneycontrol.com
Reliance Power Clarification
Reliance Power Ltd has given clarification to BSE regarding issue of Bonus Shares as follows:
1. As per the Terms of Issue, where Shareholders chose Payment Method 1, the balance amount was due on allotment and a notice for the same has been sent to the Shareholders to make the balance payment on or before February 26, 2008, i.e. before the proposed bonus issue. Thus, by issuing notice to Members requiring them to make the balance payment on the partly paid shares (whereupon the call becomes due) all Equity Shares have been made fully paid-up by the Company.
Accordingly, the Company is in compliance with chapter 15.1.5 of the SEBI (DIP) Guidelines, 2000.
In relation to shares, where the said call money remain in arrear after the stipulated date, the Company, will keep the bonus shares in abeyance and the same shall be given to the respective holders upon receipt of call money.
2. The proposed Bonus Issue will be made by the Company in accordance with the applicable provisions of the Articles of Association and the Listing Agreement and subject to the approval of Shareholders. The Promoters of the Company have indicated to waive their entitlement for the said bonus shares in accordance with law and in the broader interest of protecting and enhancing value for over 4 million institutional and retail investors of the Company. Accordingly no bonus shares will be issued and allotted to the Promoters.
Bonus Shares will be issued as above to all Members (excluding Promoters) who are identified as Shareholders of the Company on the Record Date, which shall be fixed by the Company in consultation with the Stock Exchanges and in compliance with provisions of the Listing Agreement.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
1. As per the Terms of Issue, where Shareholders chose Payment Method 1, the balance amount was due on allotment and a notice for the same has been sent to the Shareholders to make the balance payment on or before February 26, 2008, i.e. before the proposed bonus issue. Thus, by issuing notice to Members requiring them to make the balance payment on the partly paid shares (whereupon the call becomes due) all Equity Shares have been made fully paid-up by the Company.
Accordingly, the Company is in compliance with chapter 15.1.5 of the SEBI (DIP) Guidelines, 2000.
In relation to shares, where the said call money remain in arrear after the stipulated date, the Company, will keep the bonus shares in abeyance and the same shall be given to the respective holders upon receipt of call money.
2. The proposed Bonus Issue will be made by the Company in accordance with the applicable provisions of the Articles of Association and the Listing Agreement and subject to the approval of Shareholders. The Promoters of the Company have indicated to waive their entitlement for the said bonus shares in accordance with law and in the broader interest of protecting and enhancing value for over 4 million institutional and retail investors of the Company. Accordingly no bonus shares will be issued and allotted to the Promoters.
Bonus Shares will be issued as above to all Members (excluding Promoters) who are identified as Shareholders of the Company on the Record Date, which shall be fixed by the Company in consultation with the Stock Exchanges and in compliance with provisions of the Listing Agreement.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
Tuesday, February 19, 2008
Avoid V-Guard Industries IPO
Arihant Capital Markets has come out with report on V-Guard Industries IPO. They have recommended to ignore the issue.
V-Guard Industries has opened for subscription with its initial public offer (IPO) of 80,00,000 equity shares of Rs 10 each for cash at a premium, at a price band of Rs 80-85 per equity share.
Arihant Capital Markets report on V-Guard Industries IPO
Investment Positive
Strong Presence and Dealer Network
VGIL has been present in the industry for the last 3 decades which has helped it in understanding changing needs and demands of its customers. The V-Guard brand enjoys strong recall and credibility, especially in south India. The company has been able to establish a strong dealer network countrywide. The sales of the company are through the distribution network that has been developed over a period of last thirty years. Presently the company has around 108 distributors and more than 7000 dealers across the nation. Further, the company also provides after sales services at distributors end with total 107 service centers.
Strategic sourcing
VGIL follows a manufacturing model wherein products are sourced from SSI units/small manufactures across south India. The company contracts with third parties for the manufacture of voltage stabilizers, pumps, UPS, electric water heaters and electric fans which are manufactured according to the specifications given by the company. VGIL has diversified competencies in this area by maintaining good and cordial relations with the suppliers.
Concerns
Competition
VGIL operates in a competitive environment. Their competition varies for each product and region.
Concentration in Southern India
VGIL is predominantly a regional player, with over 90% of the revenue (in FY 2007) coming from southern states and Goa. Kerala, Andhra Pradesh, Karnataka and Tamil Nadu contribute a very significant percentage of VGIL’s revenues.
Valuations
The issue is priced at 16x FY07 earnings on post issue capital at floor price and at 17x at cap price. VGIL’s competition varies for each product and region.
Recommendation
VGIL is presently into manufacturing and marketing of Electronic Voltage Stabilizers, Cables, Pumps, Water heaters, UPS, Fans etc. With a well-established position in south India, V-Guard Industries has only recently ventured into Maharashtra, Haryana, Madhya Pradesh, Orissa, Himachal Pradesh, Chhattisgarh, Uttar Pradesh, Gujarat, Punjab and Rajasthan on a very small scale. Based on the valuations of 16x and 17x at a price band of 80 and 85 respectively the issue looks to be priced expensively as compared to its peers. Keeping in mind the present geographical concentration, cheaper valuations of competitors and high dependence on trading income we recommend our investors to avoid the issue.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Source: Moneycontrol.com
V-Guard Industries has opened for subscription with its initial public offer (IPO) of 80,00,000 equity shares of Rs 10 each for cash at a premium, at a price band of Rs 80-85 per equity share.
Arihant Capital Markets report on V-Guard Industries IPO
Investment Positive
Strong Presence and Dealer Network
VGIL has been present in the industry for the last 3 decades which has helped it in understanding changing needs and demands of its customers. The V-Guard brand enjoys strong recall and credibility, especially in south India. The company has been able to establish a strong dealer network countrywide. The sales of the company are through the distribution network that has been developed over a period of last thirty years. Presently the company has around 108 distributors and more than 7000 dealers across the nation. Further, the company also provides after sales services at distributors end with total 107 service centers.
Strategic sourcing
VGIL follows a manufacturing model wherein products are sourced from SSI units/small manufactures across south India. The company contracts with third parties for the manufacture of voltage stabilizers, pumps, UPS, electric water heaters and electric fans which are manufactured according to the specifications given by the company. VGIL has diversified competencies in this area by maintaining good and cordial relations with the suppliers.
Concerns
Competition
VGIL operates in a competitive environment. Their competition varies for each product and region.
Concentration in Southern India
VGIL is predominantly a regional player, with over 90% of the revenue (in FY 2007) coming from southern states and Goa. Kerala, Andhra Pradesh, Karnataka and Tamil Nadu contribute a very significant percentage of VGIL’s revenues.
Valuations
The issue is priced at 16x FY07 earnings on post issue capital at floor price and at 17x at cap price. VGIL’s competition varies for each product and region.
Recommendation
VGIL is presently into manufacturing and marketing of Electronic Voltage Stabilizers, Cables, Pumps, Water heaters, UPS, Fans etc. With a well-established position in south India, V-Guard Industries has only recently ventured into Maharashtra, Haryana, Madhya Pradesh, Orissa, Himachal Pradesh, Chhattisgarh, Uttar Pradesh, Gujarat, Punjab and Rajasthan on a very small scale. Based on the valuations of 16x and 17x at a price band of 80 and 85 respectively the issue looks to be priced expensively as compared to its peers. Keeping in mind the present geographical concentration, cheaper valuations of competitors and high dependence on trading income we recommend our investors to avoid the issue.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Source: Moneycontrol.com
OnMobile Global ends with 19% premium
OnMobile Global, a provider of telecommunications value added software products and services in India, has surged to a high of Rs 579.90 before closing the day at Rs 521.90, up 18.61% over its offer price of Rs 440 per share. The stock opened at Rs 440 and hit a low of Rs 421 in morning trade. It traded with volumes of 1,97,15,324 shares on the BSE.
In an interview with CNBC-TV18, Arvind Rao, CEO & MD, Onmobile Global said they see 60-65% topline growth over the next three years and that they will maintain margins at current or higher levels for the next three years.
Rao also said that their ring back services are generating ARPUs of 9-12% for providers and that they are seeing decent traction on ARPUs. He added that the company is looking at two more overseas acquisitions in the next 12-18 months.
On the NSE, the stock went up by 17.76% or Rs 78.15, to settle at Rs 518.15, with volumes of 2,58,95,949 shares. It touched a high/low of Rs 579 and Rs 411, respectively. The turnover was at Rs 1,366 crore.
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
Source: Moneycontrol.com
In an interview with CNBC-TV18, Arvind Rao, CEO & MD, Onmobile Global said they see 60-65% topline growth over the next three years and that they will maintain margins at current or higher levels for the next three years.
Rao also said that their ring back services are generating ARPUs of 9-12% for providers and that they are seeing decent traction on ARPUs. He added that the company is looking at two more overseas acquisitions in the next 12-18 months.
On the NSE, the stock went up by 17.76% or Rs 78.15, to settle at Rs 518.15, with volumes of 2,58,95,949 shares. It touched a high/low of Rs 579 and Rs 411, respectively. The turnover was at Rs 1,366 crore.
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
Source: Moneycontrol.com
REC, an issue worth subscribing
Rajesh Jain, Director & CEO at Pranav Securities believes that REC has been offered at a good price. It is excellent pedigree and leaves some upside on the table for investors. It is certainly an issue worth subscribing to, he said.
Jain told CNBC-TV18, “Rural Electrification Corporation, REC is a nice issue. In fact it could undo a lot of the damage that may have happened because of the lower than expected listing of Reliance Power. I personally think REC is on to a great business.
He further added, “There is just one question mark on whether it would continue to have the benefit of cheap money coming in from the tax waver on capital gain bonds. Once you take that bit of a rider out of the issue, it has been offered at a good price. It is excellent pedigree and it leaves enough on the table for investors. It should soon find itself in the same league as an IDFC or a Power Grid, so it is certainly an issue worth subscribing to.”
Source: Moneycontrol.com
Jain told CNBC-TV18, “Rural Electrification Corporation, REC is a nice issue. In fact it could undo a lot of the damage that may have happened because of the lower than expected listing of Reliance Power. I personally think REC is on to a great business.
He further added, “There is just one question mark on whether it would continue to have the benefit of cheap money coming in from the tax waver on capital gain bonds. Once you take that bit of a rider out of the issue, it has been offered at a good price. It is excellent pedigree and it leaves enough on the table for investors. It should soon find itself in the same league as an IDFC or a Power Grid, so it is certainly an issue worth subscribing to.”
Source: Moneycontrol.com
Monday, February 18, 2008
OnMobile Global to list on Tuesday
OnMobile Global, a leading provider of telecommunications value added software products and services in India, will list on the bourses with its equity shares on Tuesday, February 19, 2008. The issue price has been fixed at Rs 440 per share.
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
The objects of the issue are to purchase equipment for the company’s offices at Bangalore, Mumbai and Delhi and various customer sites, to meet working capital requirements, repayment of loan and to fund expenditures for general corporate purposes.
The book running lead managers to the issue are Deutsche Equities India Private Limited and ICICI Securities Limited.
It has a broad range of applications that are delivered by its carrier customers to their end-user subscribers. These products include ringback tones, voice portals, ringtone downloads, subscription manager, contests, music messaging, on-device client software, mobile radio, dynamic voicemail, voice short messaging service and missed call alerts which enable subscribers to personalise their mobile phones and thereby enhance user experience.
Source: Moneycontrol.com
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
The objects of the issue are to purchase equipment for the company’s offices at Bangalore, Mumbai and Delhi and various customer sites, to meet working capital requirements, repayment of loan and to fund expenditures for general corporate purposes.
The book running lead managers to the issue are Deutsche Equities India Private Limited and ICICI Securities Limited.
It has a broad range of applications that are delivered by its carrier customers to their end-user subscribers. These products include ringback tones, voice portals, ringtone downloads, subscription manager, contests, music messaging, on-device client software, mobile radio, dynamic voicemail, voice short messaging service and missed call alerts which enable subscribers to personalise their mobile phones and thereby enhance user experience.
Source: Moneycontrol.com
Subscribe to REC IPO
Angel Broking has come out with research report on Rural Electrification Corporation (REC) IPO. They have recommended subscribing to the issue. REC, one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.
Angel Broking report on Rural Electrification Corporation IPO
Substantial funds requirement for Indian Power sector
Rural Electrification Corporation is a leading public financial institution exclusively focused on extending finance to the Indian Power Sector, which, going by the government’s stated intentions, is slated for tremendous growth during the Eleventh Five-year Plan (2007-2012). It is estimated that Rs 10.3 lakh crore of capital would be required to set up the power infrastructure targeted to be added by 2012. Within the available funding sources, the government envisages REC’s share at Rs 59,150 crore at least.
Accordingly, we expect REC to deliver a CAGR growth of 25% in Advances over FY2008-10E. Importantly, REC’s mandate has evolved over the years and it now finances all segments of the Power sector throughout the country. REC’s changing sanction mix corroborates this viz., the private sector borrowers and generation projects comprise an increasing share of sanctions, in line with the present dynamics of the Power sector.
Clear-cut, Profitable business model
REC’s primary source of revenue is interest Income from Power sector lending. Low-cost ‘54EC Bonds’ comprise 45% of its borrowings. REC is expected to deliver NIMs of 3.2-3.4% over FY2008-10E. Given its lean organisational structure, inherently low credit risk and Tax benefit u/s 36(1)(viii), RoAs should sustain at 2% levels.
REC’s leverage cannot exceed 8-9x to maintain AAA credit rating (critical for cost competitiveness). Accordingly, it is expected to deliver RoE of around 16% by FY2010E, which should increase to around 18% at optimum leverage (post FY2010E).
Tax benefits and treatment of deferred tax liability (DTL)
REC is eligible for tax benefit u/s 36(1) (viii) of IT Act, 1961 by creating a special reserve of upto 20% of profits. The company has created DTL in respect of this tax benefit – however, we believe the tax liability is unlikely to crystallize and consider it appropriate to treat the DTL so created (and to be created) as part of equity. Accordingly, we have increased book value by Rs 9.5 (and have assumed the effective Tax rate for FY2008-10E to be 27% for the same reason).
Outlook and Valuation
In the past few months, the Power Sector (on which REC is an indirect play) has seen valuations reaching frothy levels, only to come off recently. Against this backdrop, we believe the REC Issue comes at a reasonable price based on fundamental value, considering the high visibility of credit demand in the Power Finance sector, REC’s strong positioning in the same and its reasonably strong financial performance.
At the upper end of the price band of Rs 105, the stock is available at 1.3x FY2009E Adjusted Book Value of Rs 80.7 and 1.2x FY2010E Adjusted Book Value of Rs 90.5. The valuations compare favorably with its closest peer, PFC, which is trading at 1.8x FY2009E Adjusted Book Value of Rs 104 and 1.6x FY2010E Adjusted Book Value of Rs 117 at the CMP of Rs 185. We believe REC can command upto 1.5x 1-year Forward Adjusted Book Value, implying reasonable upside even at the upper end of the price band. Hence, we recommend subscribe to the issue.
Concerns
Credit offtake falling short of estimates
In the past, the government has often fallen short of targeted capacity addition in its Five-year Plans. The Ninth Plan had targeted a capacity addition of 40,245MW, of which only 47.8% was actually added during the Plan. Similarly, in the Tenth Plan, only 51.5% of the targeted capacity addition of 41,110MW was actually achieved.
The Eleventh Plan has an ambitious targeted capacity addition of 78,577MW, of which 13.7% (10,760MW) is expected to be in the Private sector. Various factors such as delays in environmental clearance, land acquisition, financial closure (on the Equity or Debt front) may result in shortfall in targeted capacity addition, as a result of which loan disbursements for REC may fall short of estimates.
Nonetheless, the environment is more enabling during the Eleventh Plan, driven by Power Sector reforms including enabling regulations such as the Electricity Act, which provide a framework for the private sector to expand viably and for the SEBs to be restructured and corporatised.
Moreover, greater competition from banks or development of deeper bond markets could result in a deteriorating NIM-credit growth trade-off for REC. This may be exacerbated by improving financial profile of Power Sector entities, with greater share of capacity addition moving to the private sector.
Withdrawal of Tax benefits
Withdrawal of capital gains exemption u/s 54EC Income Tax Act will result in REC’s cost of funds gradually increasing by around 100bp as the existing Bonds mature. However, REC does pass on part of the benefit to borrowers by charging concessional rate of interest, which we expect will be discontinued if the section is withdrawn.
Withdrawal of tax exemption u/s 36 (1) (viii) of the Income Tax Act will result in REC’s effective tax rate going up by 6-7%, potentially bringing down sustainable RoEs from about 18% to about 16.5%.
Increase in borrowing / credit (NPA) costs
Competitive pressures may force REC’s spreads below projected levels. Due to the concentrated nature of its Asset Book, major systemic problems in the Power Sector may increase its NPA levels and drastically impact its profits.
Source: Moneycontrol.com
Angel Broking report on Rural Electrification Corporation IPO
Substantial funds requirement for Indian Power sector
Rural Electrification Corporation is a leading public financial institution exclusively focused on extending finance to the Indian Power Sector, which, going by the government’s stated intentions, is slated for tremendous growth during the Eleventh Five-year Plan (2007-2012). It is estimated that Rs 10.3 lakh crore of capital would be required to set up the power infrastructure targeted to be added by 2012. Within the available funding sources, the government envisages REC’s share at Rs 59,150 crore at least.
Accordingly, we expect REC to deliver a CAGR growth of 25% in Advances over FY2008-10E. Importantly, REC’s mandate has evolved over the years and it now finances all segments of the Power sector throughout the country. REC’s changing sanction mix corroborates this viz., the private sector borrowers and generation projects comprise an increasing share of sanctions, in line with the present dynamics of the Power sector.
Clear-cut, Profitable business model
REC’s primary source of revenue is interest Income from Power sector lending. Low-cost ‘54EC Bonds’ comprise 45% of its borrowings. REC is expected to deliver NIMs of 3.2-3.4% over FY2008-10E. Given its lean organisational structure, inherently low credit risk and Tax benefit u/s 36(1)(viii), RoAs should sustain at 2% levels.
REC’s leverage cannot exceed 8-9x to maintain AAA credit rating (critical for cost competitiveness). Accordingly, it is expected to deliver RoE of around 16% by FY2010E, which should increase to around 18% at optimum leverage (post FY2010E).
Tax benefits and treatment of deferred tax liability (DTL)
REC is eligible for tax benefit u/s 36(1) (viii) of IT Act, 1961 by creating a special reserve of upto 20% of profits. The company has created DTL in respect of this tax benefit – however, we believe the tax liability is unlikely to crystallize and consider it appropriate to treat the DTL so created (and to be created) as part of equity. Accordingly, we have increased book value by Rs 9.5 (and have assumed the effective Tax rate for FY2008-10E to be 27% for the same reason).
Outlook and Valuation
In the past few months, the Power Sector (on which REC is an indirect play) has seen valuations reaching frothy levels, only to come off recently. Against this backdrop, we believe the REC Issue comes at a reasonable price based on fundamental value, considering the high visibility of credit demand in the Power Finance sector, REC’s strong positioning in the same and its reasonably strong financial performance.
At the upper end of the price band of Rs 105, the stock is available at 1.3x FY2009E Adjusted Book Value of Rs 80.7 and 1.2x FY2010E Adjusted Book Value of Rs 90.5. The valuations compare favorably with its closest peer, PFC, which is trading at 1.8x FY2009E Adjusted Book Value of Rs 104 and 1.6x FY2010E Adjusted Book Value of Rs 117 at the CMP of Rs 185. We believe REC can command upto 1.5x 1-year Forward Adjusted Book Value, implying reasonable upside even at the upper end of the price band. Hence, we recommend subscribe to the issue.
Concerns
Credit offtake falling short of estimates
In the past, the government has often fallen short of targeted capacity addition in its Five-year Plans. The Ninth Plan had targeted a capacity addition of 40,245MW, of which only 47.8% was actually added during the Plan. Similarly, in the Tenth Plan, only 51.5% of the targeted capacity addition of 41,110MW was actually achieved.
The Eleventh Plan has an ambitious targeted capacity addition of 78,577MW, of which 13.7% (10,760MW) is expected to be in the Private sector. Various factors such as delays in environmental clearance, land acquisition, financial closure (on the Equity or Debt front) may result in shortfall in targeted capacity addition, as a result of which loan disbursements for REC may fall short of estimates.
Nonetheless, the environment is more enabling during the Eleventh Plan, driven by Power Sector reforms including enabling regulations such as the Electricity Act, which provide a framework for the private sector to expand viably and for the SEBs to be restructured and corporatised.
Moreover, greater competition from banks or development of deeper bond markets could result in a deteriorating NIM-credit growth trade-off for REC. This may be exacerbated by improving financial profile of Power Sector entities, with greater share of capacity addition moving to the private sector.
Withdrawal of Tax benefits
Withdrawal of capital gains exemption u/s 54EC Income Tax Act will result in REC’s cost of funds gradually increasing by around 100bp as the existing Bonds mature. However, REC does pass on part of the benefit to borrowers by charging concessional rate of interest, which we expect will be discontinued if the section is withdrawn.
Withdrawal of tax exemption u/s 36 (1) (viii) of the Income Tax Act will result in REC’s effective tax rate going up by 6-7%, potentially bringing down sustainable RoEs from about 18% to about 16.5%.
Increase in borrowing / credit (NPA) costs
Competitive pressures may force REC’s spreads below projected levels. Due to the concentrated nature of its Asset Book, major systemic problems in the Power Sector may increase its NPA levels and drastically impact its profits.
Source: Moneycontrol.com
Subscribe to REC IPO
Angel Broking has come out with research report on Rural Electrification Corporation (REC) IPO. They have recommended subscribing to the issue. REC, one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.
Angel Broking report on Rural Electrification Corporation IPO
Substantial funds requirement for Indian Power sector
Rural Electrification Corporation is a leading public financial institution exclusively focused on extending finance to the Indian Power Sector, which, going by the government’s stated intentions, is slated for tremendous growth during the Eleventh Five-year Plan (2007-2012). It is estimated that Rs 10.3 lakh crore of capital would be required to set up the power infrastructure targeted to be added by 2012. Within the available funding sources, the government envisages REC’s share at Rs 59,150 crore at least.
Accordingly, we expect REC to deliver a CAGR growth of 25% in Advances over FY2008-10E. Importantly, REC’s mandate has evolved over the years and it now finances all segments of the Power sector throughout the country. REC’s changing sanction mix corroborates this viz., the private sector borrowers and generation projects comprise an increasing share of sanctions, in line with the present dynamics of the Power sector.
Clear-cut, Profitable business model
REC’s primary source of revenue is interest Income from Power sector lending. Low-cost ‘54EC Bonds’ comprise 45% of its borrowings. REC is expected to deliver NIMs of 3.2-3.4% over FY2008-10E. Given its lean organisational structure, inherently low credit risk and Tax benefit u/s 36(1)(viii), RoAs should sustain at 2% levels.
REC’s leverage cannot exceed 8-9x to maintain AAA credit rating (critical for cost competitiveness). Accordingly, it is expected to deliver RoE of around 16% by FY2010E, which should increase to around 18% at optimum leverage (post FY2010E).
Tax benefits and treatment of deferred tax liability (DTL)
REC is eligible for tax benefit u/s 36(1) (viii) of IT Act, 1961 by creating a special reserve of upto 20% of profits. The company has created DTL in respect of this tax benefit – however, we believe the tax liability is unlikely to crystallize and consider it appropriate to treat the DTL so created (and to be created) as part of equity. Accordingly, we have increased book value by Rs 9.5 (and have assumed the effective Tax rate for FY2008-10E to be 27% for the same reason).
Outlook and Valuation
In the past few months, the Power Sector (on which REC is an indirect play) has seen valuations reaching frothy levels, only to come off recently. Against this backdrop, we believe the REC Issue comes at a reasonable price based on fundamental value, considering the high visibility of credit demand in the Power Finance sector, REC’s strong positioning in the same and its reasonably strong financial performance.
At the upper end of the price band of Rs 105, the stock is available at 1.3x FY2009E Adjusted Book Value of Rs 80.7 and 1.2x FY2010E Adjusted Book Value of Rs 90.5. The valuations compare favorably with its closest peer, PFC, which is trading at 1.8x FY2009E Adjusted Book Value of Rs 104 and 1.6x FY2010E Adjusted Book Value of Rs 117 at the CMP of Rs 185. We believe REC can command upto 1.5x 1-year Forward Adjusted Book Value, implying reasonable upside even at the upper end of the price band. Hence, we recommend subscribe to the issue.
Concerns
Credit offtake falling short of estimates
In the past, the government has often fallen short of targeted capacity addition in its Five-year Plans. The Ninth Plan had targeted a capacity addition of 40,245MW, of which only 47.8% was actually added during the Plan. Similarly, in the Tenth Plan, only 51.5% of the targeted capacity addition of 41,110MW was actually achieved.
The Eleventh Plan has an ambitious targeted capacity addition of 78,577MW, of which 13.7% (10,760MW) is expected to be in the Private sector. Various factors such as delays in environmental clearance, land acquisition, financial closure (on the Equity or Debt front) may result in shortfall in targeted capacity addition, as a result of which loan disbursements for REC may fall short of estimates.
Nonetheless, the environment is more enabling during the Eleventh Plan, driven by Power Sector reforms including enabling regulations such as the Electricity Act, which provide a framework for the private sector to expand viably and for the SEBs to be restructured and corporatised.
Moreover, greater competition from banks or development of deeper bond markets could result in a deteriorating NIM-credit growth trade-off for REC. This may be exacerbated by improving financial profile of Power Sector entities, with greater share of capacity addition moving to the private sector.
Withdrawal of Tax benefits
Withdrawal of capital gains exemption u/s 54EC Income Tax Act will result in REC’s cost of funds gradually increasing by around 100bp as the existing Bonds mature. However, REC does pass on part of the benefit to borrowers by charging concessional rate of interest, which we expect will be discontinued if the section is withdrawn.
Withdrawal of tax exemption u/s 36 (1) (viii) of the Income Tax Act will result in REC’s effective tax rate going up by 6-7%, potentially bringing down sustainable RoEs from about 18% to about 16.5%.
Increase in borrowing / credit (NPA) costs
Competitive pressures may force REC’s spreads below projected levels. Due to the concentrated nature of its Asset Book, major systemic problems in the Power Sector may increase its NPA levels and drastically impact its profits.
Source: Moneycontrol.com
Angel Broking report on Rural Electrification Corporation IPO
Substantial funds requirement for Indian Power sector
Rural Electrification Corporation is a leading public financial institution exclusively focused on extending finance to the Indian Power Sector, which, going by the government’s stated intentions, is slated for tremendous growth during the Eleventh Five-year Plan (2007-2012). It is estimated that Rs 10.3 lakh crore of capital would be required to set up the power infrastructure targeted to be added by 2012. Within the available funding sources, the government envisages REC’s share at Rs 59,150 crore at least.
Accordingly, we expect REC to deliver a CAGR growth of 25% in Advances over FY2008-10E. Importantly, REC’s mandate has evolved over the years and it now finances all segments of the Power sector throughout the country. REC’s changing sanction mix corroborates this viz., the private sector borrowers and generation projects comprise an increasing share of sanctions, in line with the present dynamics of the Power sector.
Clear-cut, Profitable business model
REC’s primary source of revenue is interest Income from Power sector lending. Low-cost ‘54EC Bonds’ comprise 45% of its borrowings. REC is expected to deliver NIMs of 3.2-3.4% over FY2008-10E. Given its lean organisational structure, inherently low credit risk and Tax benefit u/s 36(1)(viii), RoAs should sustain at 2% levels.
REC’s leverage cannot exceed 8-9x to maintain AAA credit rating (critical for cost competitiveness). Accordingly, it is expected to deliver RoE of around 16% by FY2010E, which should increase to around 18% at optimum leverage (post FY2010E).
Tax benefits and treatment of deferred tax liability (DTL)
REC is eligible for tax benefit u/s 36(1) (viii) of IT Act, 1961 by creating a special reserve of upto 20% of profits. The company has created DTL in respect of this tax benefit – however, we believe the tax liability is unlikely to crystallize and consider it appropriate to treat the DTL so created (and to be created) as part of equity. Accordingly, we have increased book value by Rs 9.5 (and have assumed the effective Tax rate for FY2008-10E to be 27% for the same reason).
Outlook and Valuation
In the past few months, the Power Sector (on which REC is an indirect play) has seen valuations reaching frothy levels, only to come off recently. Against this backdrop, we believe the REC Issue comes at a reasonable price based on fundamental value, considering the high visibility of credit demand in the Power Finance sector, REC’s strong positioning in the same and its reasonably strong financial performance.
At the upper end of the price band of Rs 105, the stock is available at 1.3x FY2009E Adjusted Book Value of Rs 80.7 and 1.2x FY2010E Adjusted Book Value of Rs 90.5. The valuations compare favorably with its closest peer, PFC, which is trading at 1.8x FY2009E Adjusted Book Value of Rs 104 and 1.6x FY2010E Adjusted Book Value of Rs 117 at the CMP of Rs 185. We believe REC can command upto 1.5x 1-year Forward Adjusted Book Value, implying reasonable upside even at the upper end of the price band. Hence, we recommend subscribe to the issue.
Concerns
Credit offtake falling short of estimates
In the past, the government has often fallen short of targeted capacity addition in its Five-year Plans. The Ninth Plan had targeted a capacity addition of 40,245MW, of which only 47.8% was actually added during the Plan. Similarly, in the Tenth Plan, only 51.5% of the targeted capacity addition of 41,110MW was actually achieved.
The Eleventh Plan has an ambitious targeted capacity addition of 78,577MW, of which 13.7% (10,760MW) is expected to be in the Private sector. Various factors such as delays in environmental clearance, land acquisition, financial closure (on the Equity or Debt front) may result in shortfall in targeted capacity addition, as a result of which loan disbursements for REC may fall short of estimates.
Nonetheless, the environment is more enabling during the Eleventh Plan, driven by Power Sector reforms including enabling regulations such as the Electricity Act, which provide a framework for the private sector to expand viably and for the SEBs to be restructured and corporatised.
Moreover, greater competition from banks or development of deeper bond markets could result in a deteriorating NIM-credit growth trade-off for REC. This may be exacerbated by improving financial profile of Power Sector entities, with greater share of capacity addition moving to the private sector.
Withdrawal of Tax benefits
Withdrawal of capital gains exemption u/s 54EC Income Tax Act will result in REC’s cost of funds gradually increasing by around 100bp as the existing Bonds mature. However, REC does pass on part of the benefit to borrowers by charging concessional rate of interest, which we expect will be discontinued if the section is withdrawn.
Withdrawal of tax exemption u/s 36 (1) (viii) of the Income Tax Act will result in REC’s effective tax rate going up by 6-7%, potentially bringing down sustainable RoEs from about 18% to about 16.5%.
Increase in borrowing / credit (NPA) costs
Competitive pressures may force REC’s spreads below projected levels. Due to the concentrated nature of its Asset Book, major systemic problems in the Power Sector may increase its NPA levels and drastically impact its profits.
Source: Moneycontrol.com
KNR Constructions ends with 9% premium
An infrastructure project development company, KNR Constructions has closed the day at Rs 154.90, down 8.88% or Rs 15.10 after hitting an intraday high/low of Rs 210 and Rs 151.30, respectively on the NSE. The stock opened above its issue price of Rs 170 but remained below issue price through the day due to weak market sentiment.
It traded with volumes of 54,46,069 shares and turnover stood at Rs 88 crore.
In an interview with CNBC-TV18, Jalandhar Reddy, Executive Director, KNR Constructions said that their FY09 revenues are being pegged at Rs 770 crore with at PAT of Rs 45 crore and an EPS of Rs 16. He added that their Rs 2000 crore order book is executable over 2.5 years and that they are looking at bidding independently for large projects as well.
On the BSE, it started the day at Rs 180 and ended at Rs 154.35, with volumes of 57,56,525 shares. The stock touched a high/low of Rs 199 and Rs 151.15, respectively.
The company had entered capital market with an initial public offering of 7,874,570 equity shares of Rs 10 each, which got subscribed 1.25 times.
Source: Moneycontrol.com
It traded with volumes of 54,46,069 shares and turnover stood at Rs 88 crore.
In an interview with CNBC-TV18, Jalandhar Reddy, Executive Director, KNR Constructions said that their FY09 revenues are being pegged at Rs 770 crore with at PAT of Rs 45 crore and an EPS of Rs 16. He added that their Rs 2000 crore order book is executable over 2.5 years and that they are looking at bidding independently for large projects as well.
On the BSE, it started the day at Rs 180 and ended at Rs 154.35, with volumes of 57,56,525 shares. The stock touched a high/low of Rs 199 and Rs 151.15, respectively.
The company had entered capital market with an initial public offering of 7,874,570 equity shares of Rs 10 each, which got subscribed 1.25 times.
Source: Moneycontrol.com
OnMobile Global to list at around Rs 450-500
OnMobile Global, a leading provider of telecommunications value added software products and services in India, will list on the bourses on February 19, 2008. Experts believe that the stock is likely to list around Rs 450-500 as against its issue price of Rs 440 per share.
According to Investment Advisor, S P Tulsian, "OnMobile Global is likely to list at Rs 450 against its issue price of Rs 440. Profit booking is advised upto Rs 425 levels."
R S Iyer of K R Choksey Securities said, "OnMobile is expected to list at around Rs 450-500. One should hold the stock for better price of Rs 650. Selling is advised above Rs 650."
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
It has a broad range of applications that are delivered by its carrier customers to their end-user subscribers. These products include ringback tones, voice portals, ringtone downloads, subscription manager, contests, music messaging, on-device client software, mobile radio, dynamic voicemail, voice short messaging service and missed call alerts which enable subscribers to personalise their mobile phones and thereby enhance user experience.
Source: Moneycontrol.com
According to Investment Advisor, S P Tulsian, "OnMobile Global is likely to list at Rs 450 against its issue price of Rs 440. Profit booking is advised upto Rs 425 levels."
R S Iyer of K R Choksey Securities said, "OnMobile is expected to list at around Rs 450-500. One should hold the stock for better price of Rs 650. Selling is advised above Rs 650."
The company had entered capital market with a public issue of 1.09 crore equity shares at a price band of Rs 425-450 and got subscribed 10.95 times.
It has a broad range of applications that are delivered by its carrier customers to their end-user subscribers. These products include ringback tones, voice portals, ringtone downloads, subscription manager, contests, music messaging, on-device client software, mobile radio, dynamic voicemail, voice short messaging service and missed call alerts which enable subscribers to personalise their mobile phones and thereby enhance user experience.
Source: Moneycontrol.com
If REPL offers 1:1 bonus, what would your gains be?
Reliance Power is considering bonus issue to all its shareholders excluding promoters. That is, the bonus issue will be for non-promoters.
Non-promoters’ holding is about 22.8 crore shares. The public shareholding is 10.1%. The market is expecting the bonus issue to be at around 1:1 or 1:5 ratio, which means one bonus share for every share that a person holds or one share for every five shares that a person holds. Considering that ratio in our analysis, the public stake holding will go up from 10.1% to anywhere between 11.9-18.3%.
The cost of acquisitions may come down. If one looks at the QIB portion which is subscribed at about Rs 450, will come down to about Rs 375, if the ratio is 1:5; will come to Rs 358 from Rs 430, in case of retail investors.
In case of 1:1 ratio, then it will be Rs 225 for QIBs and Rs 215 for retail investors. If one takes a scenario where the current share price is held – around Rs 420, then the QIB portion will make a profit of about 10%, if the ratio is 1:5 and retail investors would make about 15% if the ratio is 1:5. But if the ratio is 1:1, they will make a huge profit – about 70% in case of QIBs and about 78% in case of retail investors.
But would the price be Rs 420? Maybe not. If one is reminded of last week, many people were talking of Rs 340 or Rs 350 to be the equilibrium price for the stock. So if one considers that particular thing, the profits for people would boil down to a ratio of 1:3. So if the ratio is above 1:3 – either 1:3, 1:2 or 1:1, then the investors would see profits in their accounts which is the main intention for the company to come ahead with this particular bonus issue. Another thing to watch out for is Reliance Energy - where the shareholding would reduce from 45% to anywhere between 41%-44%.
Source: Moneycontrol.com
Non-promoters’ holding is about 22.8 crore shares. The public shareholding is 10.1%. The market is expecting the bonus issue to be at around 1:1 or 1:5 ratio, which means one bonus share for every share that a person holds or one share for every five shares that a person holds. Considering that ratio in our analysis, the public stake holding will go up from 10.1% to anywhere between 11.9-18.3%.
The cost of acquisitions may come down. If one looks at the QIB portion which is subscribed at about Rs 450, will come down to about Rs 375, if the ratio is 1:5; will come to Rs 358 from Rs 430, in case of retail investors.
In case of 1:1 ratio, then it will be Rs 225 for QIBs and Rs 215 for retail investors. If one takes a scenario where the current share price is held – around Rs 420, then the QIB portion will make a profit of about 10%, if the ratio is 1:5 and retail investors would make about 15% if the ratio is 1:5. But if the ratio is 1:1, they will make a huge profit – about 70% in case of QIBs and about 78% in case of retail investors.
But would the price be Rs 420? Maybe not. If one is reminded of last week, many people were talking of Rs 340 or Rs 350 to be the equilibrium price for the stock. So if one considers that particular thing, the profits for people would boil down to a ratio of 1:3. So if the ratio is above 1:3 – either 1:3, 1:2 or 1:1, then the investors would see profits in their accounts which is the main intention for the company to come ahead with this particular bonus issue. Another thing to watch out for is Reliance Energy - where the shareholding would reduce from 45% to anywhere between 41%-44%.
Source: Moneycontrol.com
Reliance Power board will consider issuing free bonus shares
In an unprecedented move, Anil Ambani Group company Reliance Powerwill give free bonus shares to all its shareholders to compensate thelosses they suffered when the company was listed a week ago.
"Reliance Power board will consider issuing free bonus shares to allshareholders excluding the promoters," a group spokesperson said.
On the day of its listing at Rs 547.8 a share, Reliance Powerperformed miserably at the stock exchanges and closed the day nearly32 per cent lower.
The IPO had attracted a total demand of about Rs 7,50,000 crore andthe company had issued the shares at Rs 450 while giving a discount Rs20 a share to retail investors.
"Reliance Power board will consider issuing free bonus shares to allshareholders excluding the promoters," a group spokesperson said.
On the day of its listing at Rs 547.8 a share, Reliance Powerperformed miserably at the stock exchanges and closed the day nearly32 per cent lower.
The IPO had attracted a total demand of about Rs 7,50,000 crore andthe company had issued the shares at Rs 450 while giving a discount Rs20 a share to retail investors.
Saturday, February 16, 2008
L&T Infotech IPO postponed indefinitely
Larsen and Toubro's IT subsidiary L&T Infotech has indefinitely postponed listing this financial year due to volatility in the markets and lower valuations of Indian IT companies, reports CNBC-TV18.
L&T had earlier said that the Infotech arm would list, when it crossed the figure of USD 500 million in revenues. L&T expects to do that in fiscal 2008.
VK Magapu, Chief Executive, L&T Infotech said, "All the time we said we would do it when the conditions were right and we don't think that the conditions are looking right now so it's a question of planning, it may not fit inn immediately."
Source: Moneycontrol.com
L&T had earlier said that the Infotech arm would list, when it crossed the figure of USD 500 million in revenues. L&T expects to do that in fiscal 2008.
VK Magapu, Chief Executive, L&T Infotech said, "All the time we said we would do it when the conditions were right and we don't think that the conditions are looking right now so it's a question of planning, it may not fit inn immediately."
Source: Moneycontrol.com
KNR Constructions to list on Monday
KNR Constructions, an infrastructure project development company, will list on the bourses with its equity shares on Monday, February 18, 2008. It has been fixed the issue price at Rs 170 per equity share for its initial public offering of 7,874,570 equity shares of Rs 10 each for cash at a price determined through a 100% book-building process.
The issue comprises a net issue to the public of 7,734,570 equity shares of Rs 10 each and a reservation for eligible employees of up to 140,000 equity shares of Rs 10 each. The issue and the net issue respectively constitute 28.00% and 27.50% of the fully diluted post-issue equity share capital of the Company.
The issue closed on January 29, 2008 and the issue got subscribed 1.25 times based on the preliminary bidding data received from the stock exchanges on the closing day.
The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Source: Moneycontrol.com
The issue comprises a net issue to the public of 7,734,570 equity shares of Rs 10 each and a reservation for eligible employees of up to 140,000 equity shares of Rs 10 each. The issue and the net issue respectively constitute 28.00% and 27.50% of the fully diluted post-issue equity share capital of the Company.
The issue closed on January 29, 2008 and the issue got subscribed 1.25 times based on the preliminary bidding data received from the stock exchanges on the closing day.
The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Source: Moneycontrol.com
KNR Constructions to list below issue price
KNR Constructions, an infrastructure project development company, will list on the bourses with its equity shares on Monday, February 18, 2008. Experts believe that the company had received mild response to its issue and the market has not stabilised yet, so the stock is likely to list below its issue price.
R S Iyer of K R Choksey Securities says, "KNR Constructions is expected to list around Rs 160-170 and will trade in the range of Rs 150-170 through the day. One can exit the stock above Rs 190."
"KNR Constructions is likely to list at Rs 160 against issue price of Rs 170 per share. Exit from the stock upto Rs 150 and move to peers available much cheaper", Investment Advisor, S P Tulsian said.
It has been fixed the issue price at Rs 170 per equity share for its initial public offering of 7,874,570 equity shares of Rs 10 each for cash at a price determined through a 100% book-building process. The issue got subscribed 1.25 times.
The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Source: Moneycontrol.com
R S Iyer of K R Choksey Securities says, "KNR Constructions is expected to list around Rs 160-170 and will trade in the range of Rs 150-170 through the day. One can exit the stock above Rs 190."
"KNR Constructions is likely to list at Rs 160 against issue price of Rs 170 per share. Exit from the stock upto Rs 150 and move to peers available much cheaper", Investment Advisor, S P Tulsian said.
It has been fixed the issue price at Rs 170 per equity share for its initial public offering of 7,874,570 equity shares of Rs 10 each for cash at a price determined through a 100% book-building process. The issue got subscribed 1.25 times.
The equity shares are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Source: Moneycontrol.com
Apply for Rural Electr Corp IPO
Rural Electrification Corporation (REC), one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.
equity shares for subscription by eligible employees as defined in the Red Herring Prospectus.
Post issue, the company’s market cap will be of Rs 7727.94 – 9015.93 crore.
The issue shall constitute approximately 18.18% of the fully diluted post-issue capital of REC. The issue closes on February 22, 2008 and the price band has been fixed at Rs 90 to Rs 105 per equity share of Rs 10 each.
IL & FS Investsmart Securities Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book running lead managers for the Issue. The equity shares are proposed to be listed on the NSE and the BSE.
The company proposes to utilize the net proceeds from the fresh issue to augment its capital base to meet the future capital requirements arising out of growth in its assets, primarily its loan and investment portfolio due to the growth of the Indian economy and for other general corporate purposes including meeting the expenses of the Issue. The company is seeking to strengthen its capital base to improve its borrowing capacity in order to support the future growth in its assets.
For FY07, the company reported income from operations at Rs 2651.6 crore as against Rs 2058.3 crore and profit after tax before extraordinary items at Rs 684.4 crore versus Rs 577.6 crore. Net profit stood at Rs 683 crore versus Rs 587 crore.
Source: Moneycontrol.com
equity shares for subscription by eligible employees as defined in the Red Herring Prospectus.
Post issue, the company’s market cap will be of Rs 7727.94 – 9015.93 crore.
The issue shall constitute approximately 18.18% of the fully diluted post-issue capital of REC. The issue closes on February 22, 2008 and the price band has been fixed at Rs 90 to Rs 105 per equity share of Rs 10 each.
IL & FS Investsmart Securities Limited, ICICI Securities Limited and SBI Capital Markets Limited are the book running lead managers for the Issue. The equity shares are proposed to be listed on the NSE and the BSE.
The company proposes to utilize the net proceeds from the fresh issue to augment its capital base to meet the future capital requirements arising out of growth in its assets, primarily its loan and investment portfolio due to the growth of the Indian economy and for other general corporate purposes including meeting the expenses of the Issue. The company is seeking to strengthen its capital base to improve its borrowing capacity in order to support the future growth in its assets.
For FY07, the company reported income from operations at Rs 2651.6 crore as against Rs 2058.3 crore and profit after tax before extraordinary items at Rs 684.4 crore versus Rs 577.6 crore. Net profit stood at Rs 683 crore versus Rs 587 crore.
Source: Moneycontrol.com
Thursday, February 14, 2008
IPO Grey Market Rates Date: 14th Feb. 2008
GSS America IPO subscribed fully
The initial public offering of IT solution provider, GSS America Infotech has been subscribed 0.99 times till 5 pm today, as per data available on NSE website. The support has seen from qualified institutional investors, which portion subscribed 1.12 times till yesterday.
The issue has opened for subscription with a public issue of 34,97,495 equity shares of Rs 10 each through 100% book building process. The issue wil close on February 15, 2008 and the price band is at Rs 400 to Rs 440 per equity share of Rs 10 each.
Religare Securities Limited and Edelweiss Capital Ltd. are the BRLMs for the Issue and Bigshare Service Pvt Ltd is the Registrar to the Issue. The equity shares are proposed to be listed on BSE and NSE.
The company proposes to utilize the net proceeds of the issue for setting up of state of the art Global Delivery Centre (GDC) at Hyderabad with 1000 seater capacity, setting up overseas offices, meeting working capital requirement and for acquisitions. Presently the company is operating in India from its two Global Delivery Centers in India, one at Jubilee Hills, Hyderabad and second at Hitech City, Madhapur, Hyderabad. Further, GSS also has two GDCs in Chicago, US.
The Company's present operations can be classified into two areas namely Enterprises Application Integration, (EAI) Infrastructure Management and Managed Services (IM/MS). Its clientele include major Fortune 1000 companies like Ernst & Young, Blue Cross Blue Shield of NC, BMC Software, Thomson, WR Grace & Co, TDS Telecom, Pepsi Co, etc.
Source: Moneycontrol.com
The issue has opened for subscription with a public issue of 34,97,495 equity shares of Rs 10 each through 100% book building process. The issue wil close on February 15, 2008 and the price band is at Rs 400 to Rs 440 per equity share of Rs 10 each.
Religare Securities Limited and Edelweiss Capital Ltd. are the BRLMs for the Issue and Bigshare Service Pvt Ltd is the Registrar to the Issue. The equity shares are proposed to be listed on BSE and NSE.
The company proposes to utilize the net proceeds of the issue for setting up of state of the art Global Delivery Centre (GDC) at Hyderabad with 1000 seater capacity, setting up overseas offices, meeting working capital requirement and for acquisitions. Presently the company is operating in India from its two Global Delivery Centers in India, one at Jubilee Hills, Hyderabad and second at Hitech City, Madhapur, Hyderabad. Further, GSS also has two GDCs in Chicago, US.
The Company's present operations can be classified into two areas namely Enterprises Application Integration, (EAI) Infrastructure Management and Managed Services (IM/MS). Its clientele include major Fortune 1000 companies like Ernst & Young, Blue Cross Blue Shield of NC, BMC Software, Thomson, WR Grace & Co, TDS Telecom, Pepsi Co, etc.
Source: Moneycontrol.com
Subscribe to Rural Electrification Corp IPO
SKP Securities has come out with research report on Rural Electrification Corporation IPO. It has recommended to subscribe to the issue.
Rural Electrification Corporation (REC), one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.
SKP Securities report on Rural Electrification Corporation IPO
Key Positives
* The 11th Plan envisages to add 70,000 MW of power capacity during the plan period. The investments needed in the transmission and distribution sectors - during the 11th Plan itself - are expected to be Rs. 10,00,000 crore. This augurs well for REC.
* Since REC received its expanded mandate in 2002-03 to finance all kinds of generation projects, sanctions and disbursements have grown alomst 10 times and 17 times respectively by 2005-06. The share in private sector had also gone upto 36% in 2005-06. Therefore the perception that REC is solely about village electrification is untrue. REC is playing a much larger role. It has developed into a robust agency that provides technological and financial support to all the three sectors: generation, transmission and distribution.
* REC has been ranked among the top ten public sector undertakings for the financial years 1999-2000, 2001-2002, 2004-2005 by the Ministry of Heavy Industries and Public Enterprises, GoI.
* REC is into generation project finance, though relatively new. REC is the lead financial institution responsible for syndicating loans in as many as seven projects. Projects that would generate 4,285 MW of hydro and thermal power. REC Transmission Projects Company Limited has been established and has commenced its business operations. REC Transmission has been appointed as the nodal agency for 2 transmission projects on ‘Build, Own and Operate’ basis. REC has also established REC Power Distribution Company Ltd. for the purpose of operating and providing consultancy services with respect to distribution systems.
* REC operates at an NIM of over 3%, the net NPA level was 1.85% for FY2007.
Concerns
* REC has advanced 90.75% of its total advances to SEB's and SPU’s , many of which are loss making and may have liquidity issues leading to non-payment or delay in payment of dues.
* With a short fall being faced for manpower and project equipments many upcoming projects may get delayed thereby inflating project cost and also increasing the payback time of such loans thereby negatively impacting the earnings of REC.
Recommendation
REC seems to be appropriately poised for capturing the growth opportunity presented by the power sector. The issue price band of Rs 90-105 implies a PER of 9.65-11.26X on H1FY08 annualised EPS of Rs 9.32 (on diluted equity).
With huge investments to come into power generation and such high levels of T&D losses, we feel there will be no dearth of demand for an experienced and established fund mobiliser like REC, we recommend to subscribe to the issue.
Source: Moneycontrol.com
Rural Electrification Corporation (REC), one of the leading public financial institutions in Indian power infrastructure, proposes to enter the capital markets on February 19, 2008 with a public issue of 156,120,000 equity shares of Rs 10 each through 100% book building process.
SKP Securities report on Rural Electrification Corporation IPO
Key Positives
* The 11th Plan envisages to add 70,000 MW of power capacity during the plan period. The investments needed in the transmission and distribution sectors - during the 11th Plan itself - are expected to be Rs. 10,00,000 crore. This augurs well for REC.
* Since REC received its expanded mandate in 2002-03 to finance all kinds of generation projects, sanctions and disbursements have grown alomst 10 times and 17 times respectively by 2005-06. The share in private sector had also gone upto 36% in 2005-06. Therefore the perception that REC is solely about village electrification is untrue. REC is playing a much larger role. It has developed into a robust agency that provides technological and financial support to all the three sectors: generation, transmission and distribution.
* REC has been ranked among the top ten public sector undertakings for the financial years 1999-2000, 2001-2002, 2004-2005 by the Ministry of Heavy Industries and Public Enterprises, GoI.
* REC is into generation project finance, though relatively new. REC is the lead financial institution responsible for syndicating loans in as many as seven projects. Projects that would generate 4,285 MW of hydro and thermal power. REC Transmission Projects Company Limited has been established and has commenced its business operations. REC Transmission has been appointed as the nodal agency for 2 transmission projects on ‘Build, Own and Operate’ basis. REC has also established REC Power Distribution Company Ltd. for the purpose of operating and providing consultancy services with respect to distribution systems.
* REC operates at an NIM of over 3%, the net NPA level was 1.85% for FY2007.
Concerns
* REC has advanced 90.75% of its total advances to SEB's and SPU’s , many of which are loss making and may have liquidity issues leading to non-payment or delay in payment of dues.
* With a short fall being faced for manpower and project equipments many upcoming projects may get delayed thereby inflating project cost and also increasing the payback time of such loans thereby negatively impacting the earnings of REC.
Recommendation
REC seems to be appropriately poised for capturing the growth opportunity presented by the power sector. The issue price band of Rs 90-105 implies a PER of 9.65-11.26X on H1FY08 annualised EPS of Rs 9.32 (on diluted equity).
With huge investments to come into power generation and such high levels of T&D losses, we feel there will be no dearth of demand for an experienced and established fund mobiliser like REC, we recommend to subscribe to the issue.
Source: Moneycontrol.com
Wednesday, February 13, 2008
Cords Cable ends above issue price
A cable manufacturer for variety of industries, Cords Cable Industries has closed the day at Rs 139.45, up 3.30% over its offer price of Rs 135 on the NSE. This is the good listing in this week after bad listings of Reliance Power and J Kumar Infraprojects, both closed below issue price on listing day.
The share begun the day at Rs 143 and due to some spillover effect of poor listing of two stocks, it slipped below issue price, touched an intraday low of Rs 110.20 in early trade. But this spillover effect did not pressurise the stock for long as some buying has helped the stock to touch a high of Rs 151. The stock remained above the issue price for major part of the day.
It traded with volumes of 89,36,555 shares and the turnover was at Rs 124 crore.
Rakesh Malhotra, Joint MD of Cords Cable Industries, told CNBC-TV18 that FY08 profit is seen at Rs 15.5 crore and EPS at Rs 18. FY09 topline is seen at Rs 300 crore, and EPS at Rs 21. The company's current order book is at Rs 100 crore, he said.
On the BSE, the stock closed at Rs 138.30, with volumes of 1,05,18,929 shares after touching high/low of Rs 151 and Rs 113, respectively during the day.
The company had entered capital market with a public issue of 30.85 lakh shares at a price band of Rs 125-135 per equity share. The issue got subscribed 4.99 times.
Currently, CCIL manufactures cables upto 1.1 KV. It caters to a wide spectrum of cable users in various industries like power, steel, cement, fertilizers and chemicals, refinery / petroleum etc.
Its clients include BHEL, NTPC, Hindalco, ACC, HPCL, GAIL, TATA STEEL, Siemens, Honeywell, L&T, MRPL etc.
Source: Moneycontrol.com
The share begun the day at Rs 143 and due to some spillover effect of poor listing of two stocks, it slipped below issue price, touched an intraday low of Rs 110.20 in early trade. But this spillover effect did not pressurise the stock for long as some buying has helped the stock to touch a high of Rs 151. The stock remained above the issue price for major part of the day.
It traded with volumes of 89,36,555 shares and the turnover was at Rs 124 crore.
Rakesh Malhotra, Joint MD of Cords Cable Industries, told CNBC-TV18 that FY08 profit is seen at Rs 15.5 crore and EPS at Rs 18. FY09 topline is seen at Rs 300 crore, and EPS at Rs 21. The company's current order book is at Rs 100 crore, he said.
On the BSE, the stock closed at Rs 138.30, with volumes of 1,05,18,929 shares after touching high/low of Rs 151 and Rs 113, respectively during the day.
The company had entered capital market with a public issue of 30.85 lakh shares at a price band of Rs 125-135 per equity share. The issue got subscribed 4.99 times.
Currently, CCIL manufactures cables upto 1.1 KV. It caters to a wide spectrum of cable users in various industries like power, steel, cement, fertilizers and chemicals, refinery / petroleum etc.
Its clients include BHEL, NTPC, Hindalco, ACC, HPCL, GAIL, TATA STEEL, Siemens, Honeywell, L&T, MRPL etc.
Source: Moneycontrol.com
Tuesday, February 12, 2008
SVEC Constructions withdraws IPO
There is one more sufferer of this weak market conditions after Emaar MGF, Wockhardt Hospitals and Globus Spirtis withdrawal of IPOs. SVEC Constructions also has withdrawn its IPO due to weak response, reports CNBC-TV18 quoting NW18.
To get the IPO subscribed, the company had lowered the price band to Rs 80-90 from Rs 85-95 and extended the closing date to February 13 from February 8 following the same path of Wockhardt Hospitals and Emaar MGF but that did not support the issue. Yesterday's weak listing of Reliance Power also one of the reasons.
SVEC Constructions was entered capital market with an initial public offering of 40 lakh equity shares of Rs 10 each on February 4. The issue got subscribed just 0.24 times. The company was planned to raise between Rs 32 crore-Rs 36 crore on revised price band.
The company proposed to deploy funds for the purchase of capital equipment worth Rs 15.32 crore and for meeting the long-term working capital requirements estimated at Rs 23.86 crore.
The company’s order book position as on November 30, 2008 stands at Rs 521.91 crore.
The book running lead managers to the issue were Karvy Investor Services Ltd and Centrum Capital Ltd.
Source: Moneycontrol.com
To get the IPO subscribed, the company had lowered the price band to Rs 80-90 from Rs 85-95 and extended the closing date to February 13 from February 8 following the same path of Wockhardt Hospitals and Emaar MGF but that did not support the issue. Yesterday's weak listing of Reliance Power also one of the reasons.
SVEC Constructions was entered capital market with an initial public offering of 40 lakh equity shares of Rs 10 each on February 4. The issue got subscribed just 0.24 times. The company was planned to raise between Rs 32 crore-Rs 36 crore on revised price band.
The company proposed to deploy funds for the purchase of capital equipment worth Rs 15.32 crore and for meeting the long-term working capital requirements estimated at Rs 23.86 crore.
The company’s order book position as on November 30, 2008 stands at Rs 521.91 crore.
The book running lead managers to the issue were Karvy Investor Services Ltd and Centrum Capital Ltd.
Source: Moneycontrol.com
Experts reaction mixed on Cords Cable listing
Cords Cable Industries, a specialised cable manufacturer for variety of industries, will list on the bourses with its equity shares on February 13, 2008. The offer price has been fixed at Rs 135 per share.
According to Investment Advisor, S P Tulsian, "Cords Cable is expected to list around Rs 115 as against its issue price of Rs 135."
R S Iyer of K R Choksey Securities said, "The stock is likely to debut at around Rs 150-170. One can hold the stock for better price and once the market stabilises, it will go above Rs 200, then one can sell. If it goes below issue price, one can buy as well.
The company had entered capital market with a public issue of 30.85 lakh shares at a price band of Rs 125-135 per equity share. The issue got subscribed 4.99 times.
At present, CCIL manufactures cables upto 1.1 KV for various applications covering most segments of users including industrial, utility and buildings. It caters to a wide spectrum of cable users in various industries like power, steel, cement, fertilizers and chemicals, refinery / petroleum and many others. Its clients are from diverse industries and include names such as BHEL, NTPC, Hindalco, ACC, HPCL, GAIL, TATA STEEL, Siemens, Honeywell, L&T, MRPL and others.
Source: Moneycontrol.com
According to Investment Advisor, S P Tulsian, "Cords Cable is expected to list around Rs 115 as against its issue price of Rs 135."
R S Iyer of K R Choksey Securities said, "The stock is likely to debut at around Rs 150-170. One can hold the stock for better price and once the market stabilises, it will go above Rs 200, then one can sell. If it goes below issue price, one can buy as well.
The company had entered capital market with a public issue of 30.85 lakh shares at a price band of Rs 125-135 per equity share. The issue got subscribed 4.99 times.
At present, CCIL manufactures cables upto 1.1 KV for various applications covering most segments of users including industrial, utility and buildings. It caters to a wide spectrum of cable users in various industries like power, steel, cement, fertilizers and chemicals, refinery / petroleum and many others. Its clients are from diverse industries and include names such as BHEL, NTPC, Hindalco, ACC, HPCL, GAIL, TATA STEEL, Siemens, Honeywell, L&T, MRPL and others.
Source: Moneycontrol.com
Monday, February 11, 2008
Reliance Power listing: A Post Mortem
Reliance Power listing failed to light up the stock today. The country's biggest IPO fell flat on its face. Millions investing in the stock have had their hopes and dreams shattered. Reliance Power listed at Rs 430 versus its issue price of Rs 450; it showed a disappointing and unexpected opening. Investors sold off the stock in desperation as it ran even lower to almost Rs 390 before coming back to Rs 420.
SP Tulsian of sptulsian.com said, “I had never imagined that this would get listed below offer price, because of the kind of interest that we had seen, that the exuberance in the grey market could be wiped off. But it will not bring it down below the offer price - which could be Rs 450, or in the worst-case scenario, it could be Rs 430. It has touched Rs 390, though that maybe a knee-jerk reaction or desperation on the part of investors to get out of the counter. But still that was never imagined. I don’t think any fundamental analyst would have imagined that kind of price”.
In a CNBC-TV18 poll, none of the brokers polled expected Reliance Power to list below its issue price. A staggering 53% expected it to list at Rs 550-600, 33% between Rs 500-550. Only 7% thought it would list at Rs 650-700.
As a sign of the euphoria it created earlier, SP Tulsian coomented on how many new demat accounts were opened before the issue opened.
Is it a total disappointment?
Amitabh Chakraborty of Religare Securities doesn’t think so. Chakraborty feels that it is too early to declare the listing a disappointment and the current discussions around REPL price are, at best, theoretical. Cues from global markets suggested that it expected the stock to stay between Rs 430-435, for the time being.
He’s quite positive on the stock and would advise F&O investors to enter the stock at these levels.
According to CNBC-TV18’s Udayan Mukherjee, “Just work with a ballpark number of Rs 300. At Rs 300, the company would have a marketcap of something like Rs 68,000 crore - that would be 40%-42% of NTPC’s current marketcap. I think that is fair, the company does not have any power in the ground. NTPC has the entire capacity that Reliance Power wants to put up over eight years functioning, on ground today - not eight years forward. Give it 40% of that value today. At Rs 300, assuming Rs 80 of value, you are paying almost four times book for potential five years forward. You are paying 40% of a company’s value, which has already got the capacity in ground; which you want to achieve over eight years and I think that is fair enough. So for my money, Rs 300 is fair value for Reliance Power, Rs 450 is expensive and overvalued; Rs 550 is certainly pushing it.”
Retail Vs FII:
SP Tulsian said that if the QIBs are eager to get out of the stock, then the situation could be bad. This is because the QIBs are more qualified and better informed about the fundamentals of the stock, than the retail investors. He expressed concern about the shortsightedness of the QIBs, the FIIs, since they were the ones who got the issues over-subscribed by almost 82 times.
Will retail investors get out now?
Technical Analyst Sudarshan Sukhani advises investors to go stock by stock. He said one should become long-term investors with a two-three year view. There are no short term revenue generating opportunities in the power sector now, he said. Investors can’t expect to make money in a month in the power sector.
But retail investors are not selling the stock, he observes.
On the other hand, SP Tulsian believes, retail investors probably are in a mood to get out of the stock. They reckon that they will have a better opportunity to do that now. He expects around 15-20 lakh investors to get out.
Amitabh Chakraborty of Religare Securities said he heard that the price has come down to Rs 410 and that it is a good entry point from the F&O point of view. According to him, the price fall is not due to FIIs and retail investors as they form just a small portion of the investors, but more because of global problems.
According to Chakraborty, it’s impossible to say who has sold and at what point they sold at. He added that it was mostly the FIIs who sold, as they are very scared, both in the US and our markets too.
Ambareesh Baliga, Karvy Stock Broking feels that long-term retail investors will hold on to the Reliance Power stocks. From the retail side, I do not think there will be too much of selling happening at this point of time. Those who had to sell off - basically those who had bought only from listing gains point of view, were surely disappointed. They may have already exited and those who bought for long-term, will actually hold on because after all they have not bought a Reliance Power, they have bought Ambani Group company,” he said.
What should an HNIs do now?
Tulsian said, “I don’t think that HNIs have any option. Their interest cost is close to Rs 125. And now since the issue is ruling at around the issue price, which is Rs 450, they have the option to book the losses and get out of the counter.”
He added, “A majority of them (HNIs) would be cutting their losses and get out of the counter. But I do not equally see the prices bouncing back beyond Rs 500 at least in the next 15 days or so; because on every rise, you will see investors getting out of the counter. There are over 41 lakh investors, of which closer to 40% have gone purely from the listing gain. And since they got the allotment at Rs 430, it would always be tempting for them to get out of the counter even at Rs 450-460.”
Few brokers think there are value picks still avaliable from a poll carried out by CNBC-TV18. Out of the 15 brokers polled, 20% fell in the above group. 40% were willing to bet long term on power stocks. Although, 7% still thought Reliance Power is not overvalued and 33% think there are better picks outside of power.
Most comfortable price of Reliance Power would be Rs 350-400, 33% thought.
Source: Moneycontrol.com
SP Tulsian of sptulsian.com said, “I had never imagined that this would get listed below offer price, because of the kind of interest that we had seen, that the exuberance in the grey market could be wiped off. But it will not bring it down below the offer price - which could be Rs 450, or in the worst-case scenario, it could be Rs 430. It has touched Rs 390, though that maybe a knee-jerk reaction or desperation on the part of investors to get out of the counter. But still that was never imagined. I don’t think any fundamental analyst would have imagined that kind of price”.
In a CNBC-TV18 poll, none of the brokers polled expected Reliance Power to list below its issue price. A staggering 53% expected it to list at Rs 550-600, 33% between Rs 500-550. Only 7% thought it would list at Rs 650-700.
As a sign of the euphoria it created earlier, SP Tulsian coomented on how many new demat accounts were opened before the issue opened.
Is it a total disappointment?
Amitabh Chakraborty of Religare Securities doesn’t think so. Chakraborty feels that it is too early to declare the listing a disappointment and the current discussions around REPL price are, at best, theoretical. Cues from global markets suggested that it expected the stock to stay between Rs 430-435, for the time being.
He’s quite positive on the stock and would advise F&O investors to enter the stock at these levels.
According to CNBC-TV18’s Udayan Mukherjee, “Just work with a ballpark number of Rs 300. At Rs 300, the company would have a marketcap of something like Rs 68,000 crore - that would be 40%-42% of NTPC’s current marketcap. I think that is fair, the company does not have any power in the ground. NTPC has the entire capacity that Reliance Power wants to put up over eight years functioning, on ground today - not eight years forward. Give it 40% of that value today. At Rs 300, assuming Rs 80 of value, you are paying almost four times book for potential five years forward. You are paying 40% of a company’s value, which has already got the capacity in ground; which you want to achieve over eight years and I think that is fair enough. So for my money, Rs 300 is fair value for Reliance Power, Rs 450 is expensive and overvalued; Rs 550 is certainly pushing it.”
Retail Vs FII:
SP Tulsian said that if the QIBs are eager to get out of the stock, then the situation could be bad. This is because the QIBs are more qualified and better informed about the fundamentals of the stock, than the retail investors. He expressed concern about the shortsightedness of the QIBs, the FIIs, since they were the ones who got the issues over-subscribed by almost 82 times.
Will retail investors get out now?
Technical Analyst Sudarshan Sukhani advises investors to go stock by stock. He said one should become long-term investors with a two-three year view. There are no short term revenue generating opportunities in the power sector now, he said. Investors can’t expect to make money in a month in the power sector.
But retail investors are not selling the stock, he observes.
On the other hand, SP Tulsian believes, retail investors probably are in a mood to get out of the stock. They reckon that they will have a better opportunity to do that now. He expects around 15-20 lakh investors to get out.
Amitabh Chakraborty of Religare Securities said he heard that the price has come down to Rs 410 and that it is a good entry point from the F&O point of view. According to him, the price fall is not due to FIIs and retail investors as they form just a small portion of the investors, but more because of global problems.
According to Chakraborty, it’s impossible to say who has sold and at what point they sold at. He added that it was mostly the FIIs who sold, as they are very scared, both in the US and our markets too.
Ambareesh Baliga, Karvy Stock Broking feels that long-term retail investors will hold on to the Reliance Power stocks. From the retail side, I do not think there will be too much of selling happening at this point of time. Those who had to sell off - basically those who had bought only from listing gains point of view, were surely disappointed. They may have already exited and those who bought for long-term, will actually hold on because after all they have not bought a Reliance Power, they have bought Ambani Group company,” he said.
What should an HNIs do now?
Tulsian said, “I don’t think that HNIs have any option. Their interest cost is close to Rs 125. And now since the issue is ruling at around the issue price, which is Rs 450, they have the option to book the losses and get out of the counter.”
He added, “A majority of them (HNIs) would be cutting their losses and get out of the counter. But I do not equally see the prices bouncing back beyond Rs 500 at least in the next 15 days or so; because on every rise, you will see investors getting out of the counter. There are over 41 lakh investors, of which closer to 40% have gone purely from the listing gain. And since they got the allotment at Rs 430, it would always be tempting for them to get out of the counter even at Rs 450-460.”
Few brokers think there are value picks still avaliable from a poll carried out by CNBC-TV18. Out of the 15 brokers polled, 20% fell in the above group. 40% were willing to bet long term on power stocks. Although, 7% still thought Reliance Power is not overvalued and 33% think there are better picks outside of power.
Most comfortable price of Reliance Power would be Rs 350-400, 33% thought.
Source: Moneycontrol.com
Power ON.....Market OFF
Powerless listing day for Reliance Power
Reliance Power, Anil Dhirubhai Ambani Group Company, has touched a low of Rs 355.30 before closing the day at Rs 372.30, down 17.27% to its issue price of Rs 450 on the NSE. It has opened at Rs 430 and jumped to a high of Rs 530 but immediately drifted below issue price on the back of huge selling pressure in the stock as well as across the market due to weak sentiment. The stock was remained below issue price through the day. It has tried to hold above Rs 400 but could not make it.
The traded turnover for the day was at Rs 5,601 crore and traded volumes were Rs 13,43,61,415 shares on the NSE.
On the BSE, the share opened at Rs 547.80, touched a high/low of Rs 599.90 and Rs 355.05, respectively. Reliance Power closed at Rs 372.50, with volumes of 6,38,82,239 shares.
It has added 48.15 lakh shares in Open Interest. Volumes were relatively low in F&O segment. 400 Put and 450 Call witnessed maximum action.
The company had entered capital market with public issue of 26 crore equity shares of Rs 10 each. Reliance Power IPO was oversubscribed approximately 70 times.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments
Source: Moneycontrol.com
Reliance Power, Anil Dhirubhai Ambani Group Company, has touched a low of Rs 355.30 before closing the day at Rs 372.30, down 17.27% to its issue price of Rs 450 on the NSE. It has opened at Rs 430 and jumped to a high of Rs 530 but immediately drifted below issue price on the back of huge selling pressure in the stock as well as across the market due to weak sentiment. The stock was remained below issue price through the day. It has tried to hold above Rs 400 but could not make it.
The traded turnover for the day was at Rs 5,601 crore and traded volumes were Rs 13,43,61,415 shares on the NSE.
On the BSE, the share opened at Rs 547.80, touched a high/low of Rs 599.90 and Rs 355.05, respectively. Reliance Power closed at Rs 372.50, with volumes of 6,38,82,239 shares.
It has added 48.15 lakh shares in Open Interest. Volumes were relatively low in F&O segment. 400 Put and 450 Call witnessed maximum action.
The company had entered capital market with public issue of 26 crore equity shares of Rs 10 each. Reliance Power IPO was oversubscribed approximately 70 times.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments
Source: Moneycontrol.com
Rel Power debuts below issue price
Reliance Power has listed with mild discount of Rs 20 at Rs 430 as against its issue price of Rs 450. It has touched a high of Rs 530 in early trade but huge sell off has pulled down the stock to an intraday low of Rs 386. It is trading lower at Rs 398.30, down Rs 51.70 or 11.5% on the NSE. The traded volumes of 10,42,60,041 shares and the turnover was at Rs 4,445 crore.
Reliance Power is contributing 50% to BSE and NSE cash turnover.
It has opened the day at Rs 547.80 on the BSE and touched a high/low of Rs 599.90 and Rs 389, respectively. The stock was trading at Rs 400.7, with volumes of 4,57,39,056 shares, at 1:54 pm.
F&O segment:
Most active call for Reliance Power is at Rs 450 and active put at Rs 400. Nearly 27 lakh calls traded till now. The turnover in futures and options stood at Rs 710 crore and it has added 18.7 lakh shares in open interest.
The stock is a part of NSE F&O, the lot size is of 450 shares and options strike priced between Rs 10-1350.
45% stake of Reliance Energy in Reliance Power is valued at Rs 1512 per share.
The company had entered capital market with public issue of 26 crore equity shares of Rs 10 each. Reliance Power IPO was oversubscribed approximately 70 times.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments
Source: Moneycontrol.com
Reliance Power is contributing 50% to BSE and NSE cash turnover.
It has opened the day at Rs 547.80 on the BSE and touched a high/low of Rs 599.90 and Rs 389, respectively. The stock was trading at Rs 400.7, with volumes of 4,57,39,056 shares, at 1:54 pm.
F&O segment:
Most active call for Reliance Power is at Rs 450 and active put at Rs 400. Nearly 27 lakh calls traded till now. The turnover in futures and options stood at Rs 710 crore and it has added 18.7 lakh shares in open interest.
The stock is a part of NSE F&O, the lot size is of 450 shares and options strike priced between Rs 10-1350.
45% stake of Reliance Energy in Reliance Power is valued at Rs 1512 per share.
The company had entered capital market with public issue of 26 crore equity shares of Rs 10 each. Reliance Power IPO was oversubscribed approximately 70 times.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments
Source: Moneycontrol.com
J Kumar Infra likely to list below issue price
J Kumar Infraprojects (JKIL), a civil engineering and infrastructure development company, will list on the bourses with equity shares on February 12, 2008. The offer price has been fixed at Rs 110 per share.
According to experts, the listing impact of Reliance Power will be seen on issues which are opened as well as on new listings. They further said that J Kumar is likely to list below issue price.
Investment Advisor, S P Tulsian says, "J Kumar Infra is likely to list around Rs 90 against its issue price of Rs 110. No buying is likely to get witnessed in the counter."
"The stock is expected to list below issue price. One should hold the stock till the market recovers", R S Iyer of K R Choksey Securities said.
The company had entered capital market with a public issue of 65 lakh shares of Rs 10 each at a price band of Rs 110-120 per equity share.
As on November 30, 2007, the company's order book stood at Rs 461.15 crore. The proceeds from this issue are intended to be deployed for the purchase of capital equipments and for funding working capital requirements.
Source: Moneycontrol.com
According to experts, the listing impact of Reliance Power will be seen on issues which are opened as well as on new listings. They further said that J Kumar is likely to list below issue price.
Investment Advisor, S P Tulsian says, "J Kumar Infra is likely to list around Rs 90 against its issue price of Rs 110. No buying is likely to get witnessed in the counter."
"The stock is expected to list below issue price. One should hold the stock till the market recovers", R S Iyer of K R Choksey Securities said.
The company had entered capital market with a public issue of 65 lakh shares of Rs 10 each at a price band of Rs 110-120 per equity share.
As on November 30, 2007, the company's order book stood at Rs 461.15 crore. The proceeds from this issue are intended to be deployed for the purchase of capital equipments and for funding working capital requirements.
Source: Moneycontrol.com
Friday, February 8, 2008
Emaar MGF to consider IPO at an appropriate time
Emaar MGF Land, a joint venture between one of the world’s leading real estate companies, Emaar Properties PJSC of Dubai, and MGF Development Limited of India, has withdrawn and postponed its initial public issue to an appropriate time.
The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown.
EmaarMGF has decided to postpone the issue despite receiving applications worth Rs 5779.36 crore in light of discouraging market dynamics. This decision has been taken despite the fact that the QIB and HNI portions were fully subscribed and the book was already filled to almost 85%. The retail portion had over 225000 applicants demonstrating significant appetite and demand for the issue.
Given the prevailing sentiments in the capital markets it was unclear how well the stock would trade post listing; it has been considered wiser to revisit the markets only when the demand and sentiment is stable and better providing greater value to the investor.
EmaarMGF remains committed to executing its projects in hand and is well funded to ensure that this delayed IPO will not hamper its growth plans. The company expects to return to the market at a later date when sentiment and liquidity conditions are better.
EmaarMGF Land Limited is one of the leading real estate developers in the country with a strong parentage and a diverse land bank spread across 26 cities across India. The company is committed to its mission of developing and delivering unique integrated lifestyle and work place environments and planned developments. The primary business is the development of properties in the residential, commercial, retail and hospitality sectors. In addition, it has also identified healthcare, education and infrastructure as business lines for future growth. Its operations span across various aspects of real estate development, such as land identification and acquisition, project planning, designing, marketing and execution.
The Global Co-ordinators and Book Running Lead Managers (“GCBRLMs”) to the Issue are Enam Securities Private Limited and DSP Merrill Lynch Limited. The Book Running Lead Managers (“BRLMs”) are Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.
Source: Moneycontrol.com
The company decided to take this step as a result of the prevailing adverse market sentiments, fuelled by renewed indications of a US recession and global meltdown.
EmaarMGF has decided to postpone the issue despite receiving applications worth Rs 5779.36 crore in light of discouraging market dynamics. This decision has been taken despite the fact that the QIB and HNI portions were fully subscribed and the book was already filled to almost 85%. The retail portion had over 225000 applicants demonstrating significant appetite and demand for the issue.
Given the prevailing sentiments in the capital markets it was unclear how well the stock would trade post listing; it has been considered wiser to revisit the markets only when the demand and sentiment is stable and better providing greater value to the investor.
EmaarMGF remains committed to executing its projects in hand and is well funded to ensure that this delayed IPO will not hamper its growth plans. The company expects to return to the market at a later date when sentiment and liquidity conditions are better.
EmaarMGF Land Limited is one of the leading real estate developers in the country with a strong parentage and a diverse land bank spread across 26 cities across India. The company is committed to its mission of developing and delivering unique integrated lifestyle and work place environments and planned developments. The primary business is the development of properties in the residential, commercial, retail and hospitality sectors. In addition, it has also identified healthcare, education and infrastructure as business lines for future growth. Its operations span across various aspects of real estate development, such as land identification and acquisition, project planning, designing, marketing and execution.
The Global Co-ordinators and Book Running Lead Managers (“GCBRLMs”) to the Issue are Enam Securities Private Limited and DSP Merrill Lynch Limited. The Book Running Lead Managers (“BRLMs”) are Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.
Source: Moneycontrol.com
Emaar MGF withdraws IPO too!
Primary markets are having a hard time. Wockhardt Hospital withdrew its IPO yesterday due to poor response. It was highly priced compared to its peers. The next victim to fall prey is Emaar MGF. The company has withdrawn its IPO too, reports CNBC-TV18.
Emaar MGF plans to consider other funding options like private placement, PE at SPV level. They will refund IPO money in the next 10-15 days.
Low debt-equity ratio is an advantage for the company and IPO withdrawal is not going to impact company's projects. 'Enough funding' is available with the company.
Emaar MGF Land, a joint venture between Emaar Properties of Dubai and MGF Development of India, had come out with a public issue of 102,570,623 equity shares at a revised price band of Rs 530-630. The company was planning to raise around Rs 5436-6462 crore through this issue.
Negative sentiment across the market had compelled the company to rethink about their price band. It revised to Rs 540-630 from earlier price band of Rs 610-690 and then changed to Rs 530-630. The issue also extended by 5 days till February 11. That did not help the issue to get full subscription after seeing today’s negative sentiment and withdrawal of Wockhardt Hospital also added to sentiment.
Public issue got subscribed nearly 0.84 times in the morning but suddenly QIBs and HNIs have started withdrawing their bids and the subscription dropped from 0.84 times to 0.43 times, which given the red signal to the company. Ultimately the company has withdrawn it IPO and plans to re enter primary market again when the market sentiment would get improved.
The issue proceeds was planned for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects, the development and construction costs for project Palm Drive in Gurgaon and repayment of loans.
The global co-ordinators and book running lead managers to the issue were Enam Securities Private Limited and DSP Merrill Lynch Limited. The book running lead managers were Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.
Source: Moneycontrol.com
Emaar MGF plans to consider other funding options like private placement, PE at SPV level. They will refund IPO money in the next 10-15 days.
Low debt-equity ratio is an advantage for the company and IPO withdrawal is not going to impact company's projects. 'Enough funding' is available with the company.
Emaar MGF Land, a joint venture between Emaar Properties of Dubai and MGF Development of India, had come out with a public issue of 102,570,623 equity shares at a revised price band of Rs 530-630. The company was planning to raise around Rs 5436-6462 crore through this issue.
Negative sentiment across the market had compelled the company to rethink about their price band. It revised to Rs 540-630 from earlier price band of Rs 610-690 and then changed to Rs 530-630. The issue also extended by 5 days till February 11. That did not help the issue to get full subscription after seeing today’s negative sentiment and withdrawal of Wockhardt Hospital also added to sentiment.
Public issue got subscribed nearly 0.84 times in the morning but suddenly QIBs and HNIs have started withdrawing their bids and the subscription dropped from 0.84 times to 0.43 times, which given the red signal to the company. Ultimately the company has withdrawn it IPO and plans to re enter primary market again when the market sentiment would get improved.
The issue proceeds was planned for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects, the development and construction costs for project Palm Drive in Gurgaon and repayment of loans.
The global co-ordinators and book running lead managers to the issue were Enam Securities Private Limited and DSP Merrill Lynch Limited. The book running lead managers were Citigroup Global Markets India Private Limited, Goldman Sachs (India) Securities Private Limited, HSBC Securities and Capital Markets (India) Private Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited.
Source: Moneycontrol.com
What experts say about Reliance Power listing?
Reliance Power listing is a big awaiting event for every investors on the street, who have got allotment of it shares as well as for market as it was the biggest issue in Indian Capital Market history. It is going to list on Monday, February 11, 2008.
During the issue time, experts were expecting the premium for Reliance Power nearly Rs 400-450. Everyone was very optimistic about this listing. But as the market's turmoil has been started post issue, the premium also start declining. It reduced to Rs 120-150 as per experts quote. So we will check what experts are expecting on listing?
Manisha Bhatt of Prabhudas Lilladher says, "Reliance Power is expected to list with Rs 120-130 premium. One can book partial profits during the day. The stock can go below issue price of Rs 450 if market remains subdued."
According to R S Iyer of K R Choksey Securities, "The stock is likely to list at around Rs 450-500 after looking at negative sentiment and low volumes in the market. It will not slip below issue price. People should not sell the stock due to panic, they should wait for better price. The stock will see the price of Rs 650 in near term but not on listing day. So once this sentiment would get improved in near term, investors can sell the stock at that price, till that time wait."
"It is presumed that share will list at around Rs 600 per share, on 11th February. In that situation, it is likely that majority of HNI Category investors would come to sell in the market and this category is holding about 2.28 crore shares. Since, majority investors of this category had gone for margin funding, purely from trading angle, this liquidation is likely to happen", Investment Advisor, S P Tulsian said.
He also said, "Retail Category is holding about 6.84 crore shares and since, returns to them are quite high, as compared to HNI Category, good amount of profit booking is expected by these investors as well. While talking about QIB Category, they are always smart to take the side, where wind is blowing. Since, investment of only Rs 45 per share, having made by this category of investors, interest cost to them is low at around Rs 27 per share. Hence, they will be too eager to book profit on the listing day at a price levels of Rs.600 per share."
"Hence, it is likely that selling of close to 5 crore share, may get witnessed on the listing day, from all categories of investors, put together. Due to dull sentiments now prevailing in the secondary market, matching buying may not emerge, which could keep share price soft on the listing day. Profit booking is advised in the counter upto Rs.575 level, as prices are likely to fall below this level, in the next 15 to 20 days and may get settled at around Rs.500 levels. Buying is not advised above Rs.550, for first couple of days, as lot of volatility is likely", he added.
The issue price has been fixed at Rs 450. The stock will be part of NSE F&O, the lot size is of 450 shares and options strike priced between Rs 10-1350.
Reliance Power IPO was oversubscribed approximately 70 times. Portion reserved for qualified institutional buyers was oversubscribed 82.5 times, 10% of the net issue reserved for non institutional investors was oversubscribed 159.6 times and 30% of the net issue reserved for retail investors was oversubscribed 13.6 times.
With approximately 42 lakh shareholders Reliance Power will be the largest shareholder base company among the companies listed on the Stock Exchanges.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments.
Source: Moneycontrol.com
During the issue time, experts were expecting the premium for Reliance Power nearly Rs 400-450. Everyone was very optimistic about this listing. But as the market's turmoil has been started post issue, the premium also start declining. It reduced to Rs 120-150 as per experts quote. So we will check what experts are expecting on listing?
Manisha Bhatt of Prabhudas Lilladher says, "Reliance Power is expected to list with Rs 120-130 premium. One can book partial profits during the day. The stock can go below issue price of Rs 450 if market remains subdued."
According to R S Iyer of K R Choksey Securities, "The stock is likely to list at around Rs 450-500 after looking at negative sentiment and low volumes in the market. It will not slip below issue price. People should not sell the stock due to panic, they should wait for better price. The stock will see the price of Rs 650 in near term but not on listing day. So once this sentiment would get improved in near term, investors can sell the stock at that price, till that time wait."
"It is presumed that share will list at around Rs 600 per share, on 11th February. In that situation, it is likely that majority of HNI Category investors would come to sell in the market and this category is holding about 2.28 crore shares. Since, majority investors of this category had gone for margin funding, purely from trading angle, this liquidation is likely to happen", Investment Advisor, S P Tulsian said.
He also said, "Retail Category is holding about 6.84 crore shares and since, returns to them are quite high, as compared to HNI Category, good amount of profit booking is expected by these investors as well. While talking about QIB Category, they are always smart to take the side, where wind is blowing. Since, investment of only Rs 45 per share, having made by this category of investors, interest cost to them is low at around Rs 27 per share. Hence, they will be too eager to book profit on the listing day at a price levels of Rs.600 per share."
"Hence, it is likely that selling of close to 5 crore share, may get witnessed on the listing day, from all categories of investors, put together. Due to dull sentiments now prevailing in the secondary market, matching buying may not emerge, which could keep share price soft on the listing day. Profit booking is advised in the counter upto Rs.575 level, as prices are likely to fall below this level, in the next 15 to 20 days and may get settled at around Rs.500 levels. Buying is not advised above Rs.550, for first couple of days, as lot of volatility is likely", he added.
The issue price has been fixed at Rs 450. The stock will be part of NSE F&O, the lot size is of 450 shares and options strike priced between Rs 10-1350.
Reliance Power IPO was oversubscribed approximately 70 times. Portion reserved for qualified institutional buyers was oversubscribed 82.5 times, 10% of the net issue reserved for non institutional investors was oversubscribed 159.6 times and 30% of the net issue reserved for retail investors was oversubscribed 13.6 times.
With approximately 42 lakh shareholders Reliance Power will be the largest shareholder base company among the companies listed on the Stock Exchanges.
Reliance Power is the flagship company of the Reliance ADA Group to develop, construct and operate power generation projects. The company is currently developing 12 power projects with a combined planned installed capacity of 28,000 MW, one of the largest portfolios of power generation assets under developments.
Source: Moneycontrol.com
Thursday, February 7, 2008
Reliance Power may list with 35-40% premium
Girish Nadkarni, ED- Capital Markets, Avendus Advisors said that for Reliance Power, initially people expected a 100% premium over its issue price but that has come down significantly. Retail investors can get reasonable amount of gains on listing. It may see 35-40% upside over the issue price on listing.
Excerpts of CNBC-TV18’s exclusive interview with Girish Nadkarni:
Q: What do you expect to see from Reliance Power listing next week?
A: I think the pricing that one expected initially which was a 100% premium to the issue has come down significantly but one would expect a reasonable amount of gain for the retail investors who have put in money. 35-40% upside over the issue price is what the market believes it will open at.
Q: How do you think things will shapeup from there because as we know for many of this strong blue chip IPOs, day one might be strong? But how do you expect things will shapeup for a story like Reliance Power from thereon?
A: We have seen all kinds of IPOs in the last two-three years. We have seen companies which have done very badly on listing even listing significantly at a discount to the issue price. But in a quarter over two quarters; we have seen some of the prices rally back based on performance. And some of the large real estate IPOs that came in somewhere in the last year did have some amount of volatility because of a weak opening and then this have rallied on the back of performance.
I would think a real test of a company’s IPO price is the price that one sees in the company after about 12-15 months from the date on which the IPO was launched. That is a true test of whether the IPO was correctly priced or incorrectly priced because market tends to value the future earnings of a company and therefore whether the company fulfil its promise of meeting those earnings in the next 12-15 months or not. The price at the end of that period is a true indicator of the correctness of the pricing of the IPO.
Disclosure: It is safe to assume that my clients & I may have an investment interest in the sectors that have been spoken about.
Source: Moneycontrol.com
Excerpts of CNBC-TV18’s exclusive interview with Girish Nadkarni:
Q: What do you expect to see from Reliance Power listing next week?
A: I think the pricing that one expected initially which was a 100% premium to the issue has come down significantly but one would expect a reasonable amount of gain for the retail investors who have put in money. 35-40% upside over the issue price is what the market believes it will open at.
Q: How do you think things will shapeup from there because as we know for many of this strong blue chip IPOs, day one might be strong? But how do you expect things will shapeup for a story like Reliance Power from thereon?
A: We have seen all kinds of IPOs in the last two-three years. We have seen companies which have done very badly on listing even listing significantly at a discount to the issue price. But in a quarter over two quarters; we have seen some of the prices rally back based on performance. And some of the large real estate IPOs that came in somewhere in the last year did have some amount of volatility because of a weak opening and then this have rallied on the back of performance.
I would think a real test of a company’s IPO price is the price that one sees in the company after about 12-15 months from the date on which the IPO was launched. That is a true test of whether the IPO was correctly priced or incorrectly priced because market tends to value the future earnings of a company and therefore whether the company fulfil its promise of meeting those earnings in the next 12-15 months or not. The price at the end of that period is a true indicator of the correctness of the pricing of the IPO.
Disclosure: It is safe to assume that my clients & I may have an investment interest in the sectors that have been spoken about.
Source: Moneycontrol.com
Wockhardt Hospitals withdraws IPO due to poor response
Wockhardt Hospitals withdraws its IPO due to poor response, reports CNBC-TV18. It plans to refund the IPO money in 15 days.
Over the past few days, CNBC-TV18 has been telling you how the Wockhardt Hospital IPO has been on a sick bed. Tonight , it seems there is little left to breath life into it. Sources tell CNBC TV18 that the company has pulled the plug on the issue.
This is just the thing that you do not want hear, if you are an investor. Poor market conditions are being sighted as the reason for the IPO pullout, which has gone on for a period of eight days. That has left a very sour taste in the mouth of investors and that too from a high quality management. The reason cited doesn't hold much weight as other IPOs going through the same market conditions, like IRB, have been subscribed over four times.
We made the same point yesterday, when Emaar MGF actually asked for an extension late Wednesday evening for its IPO. There are concerns on valuations and people are seeing that. If you take a look at the NSE website, all subscription applications are coming at the bottom end of the revised issue price. That is a telling statement in itself. Why has IRB gone through and why have these not gone through?
At present, Wockhardt is saying they are going to repay the money over 15-days. The issue has gone on for eight-days, add another 15-days and that is 23-days. Investors, who have put in their hard-earned money, have probably taken out the money from the secondary markets and put it into this IPO. They probably invested in the first couple of days and that money is going to come back to them in the next 14-15 days. If global markets hold out and equity markets rally, they have lost out on making money in other asset classes, perhaps even in other equities that they may have found appetizing enough for their own cause.
The subscription figures are 0.006 times HNIs, 0.06 times QIBs, 0.3 times retail, and overall 0.2 times. Eight days after an issue opened and that too with the management bandwidth that Wockhardt commands. It is going to be very hard because at the top end of the original price band, Wockhardt was talking about raising Rs 700 crore. The fact of the matter is, if that capital is needed, where is it going to come from now? With what face is the Wockhardt management going to approach investors after having pulled out of the issue? You will see their reactions no doubt in the listed Wockhardt stock itself, regardless of how the market reacts because this sort of news is not taken positively by the markets at all.
It was a point well taken that they wanted to revise their issue price but even if you compare it with Apollo Hospitals, it is going at about 24-25x one-year forward. Wockhardt Hospitals is going at 78-79x one-year forward. It is more expensive than what Fortis was, Fortis being in that same line of business has hardly made any money for its investors. So this is a telling statement. It would be very interesting to see what the next step is in terms of fund raising from Wockhardt but this is just the kind of thing that happened with Emaar yesterday and now it has happened with Wockhardt today and people are going to walk away very disappointed, especially investors who have put in their bids in the initial couple of days.
Source: Moneycontrol.com
Over the past few days, CNBC-TV18 has been telling you how the Wockhardt Hospital IPO has been on a sick bed. Tonight , it seems there is little left to breath life into it. Sources tell CNBC TV18 that the company has pulled the plug on the issue.
This is just the thing that you do not want hear, if you are an investor. Poor market conditions are being sighted as the reason for the IPO pullout, which has gone on for a period of eight days. That has left a very sour taste in the mouth of investors and that too from a high quality management. The reason cited doesn't hold much weight as other IPOs going through the same market conditions, like IRB, have been subscribed over four times.
We made the same point yesterday, when Emaar MGF actually asked for an extension late Wednesday evening for its IPO. There are concerns on valuations and people are seeing that. If you take a look at the NSE website, all subscription applications are coming at the bottom end of the revised issue price. That is a telling statement in itself. Why has IRB gone through and why have these not gone through?
At present, Wockhardt is saying they are going to repay the money over 15-days. The issue has gone on for eight-days, add another 15-days and that is 23-days. Investors, who have put in their hard-earned money, have probably taken out the money from the secondary markets and put it into this IPO. They probably invested in the first couple of days and that money is going to come back to them in the next 14-15 days. If global markets hold out and equity markets rally, they have lost out on making money in other asset classes, perhaps even in other equities that they may have found appetizing enough for their own cause.
The subscription figures are 0.006 times HNIs, 0.06 times QIBs, 0.3 times retail, and overall 0.2 times. Eight days after an issue opened and that too with the management bandwidth that Wockhardt commands. It is going to be very hard because at the top end of the original price band, Wockhardt was talking about raising Rs 700 crore. The fact of the matter is, if that capital is needed, where is it going to come from now? With what face is the Wockhardt management going to approach investors after having pulled out of the issue? You will see their reactions no doubt in the listed Wockhardt stock itself, regardless of how the market reacts because this sort of news is not taken positively by the markets at all.
It was a point well taken that they wanted to revise their issue price but even if you compare it with Apollo Hospitals, it is going at about 24-25x one-year forward. Wockhardt Hospitals is going at 78-79x one-year forward. It is more expensive than what Fortis was, Fortis being in that same line of business has hardly made any money for its investors. So this is a telling statement. It would be very interesting to see what the next step is in terms of fund raising from Wockhardt but this is just the kind of thing that happened with Emaar yesterday and now it has happened with Wockhardt today and people are going to walk away very disappointed, especially investors who have put in their bids in the initial couple of days.
Source: Moneycontrol.com
Wednesday, February 6, 2008
Reliance Power listing above Rs 600 could be postive for market
In an interview with CNBC-TV18, C Jayaram, Kotak Mahindra Bank said that if Reliance Power lists somewhere at Rs 600 and below, then many of those leverage positions are going to lose money and that could be negative. On the flip side, if it lists well above that could be a positive trigger for the market.
Excerpts from CNBC-TV18’s exclusive interview with C Jayaram:
Q: The countdown has begun for a very big listing. What’s your sense of how sentiment is towards a space like power and now what might happen to something as big as Reliance Power, just by way of interest?
A: I think the mood is not entirely positive because there are a lot of investors who have borrowed money and are pretty much leveraged in terms of their applications and the sense at this point of time is that many of them would be lucky to get away with a break-even situation. So the mood is not entirely bright right now. In a sense, that could be next major cue for the market because if it lists somewhere at Rs 600 and below, then many of those leverage positions are going to lose money and that could be negative. On the flip side, if it lists well above that could be a positive trigger for the market.
Disclosure: It is safe to assume that my clients and I may have an investment interest in the stocks/sectors that have been spoken about.
Source: Moneycontrol.com
Excerpts from CNBC-TV18’s exclusive interview with C Jayaram:
Q: The countdown has begun for a very big listing. What’s your sense of how sentiment is towards a space like power and now what might happen to something as big as Reliance Power, just by way of interest?
A: I think the mood is not entirely positive because there are a lot of investors who have borrowed money and are pretty much leveraged in terms of their applications and the sense at this point of time is that many of them would be lucky to get away with a break-even situation. So the mood is not entirely bright right now. In a sense, that could be next major cue for the market because if it lists somewhere at Rs 600 and below, then many of those leverage positions are going to lose money and that could be negative. On the flip side, if it lists well above that could be a positive trigger for the market.
Disclosure: It is safe to assume that my clients and I may have an investment interest in the stocks/sectors that have been spoken about.
Source: Moneycontrol.com
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