FORTH COMING IPO

NAME OF THE COMPANY	DEV PROCON LIMITED
Issue Size / FV	75,00,000 SHARES/ FV RS10
Issue Type	100% BOOK BUILDING
PROMOTERS	SANJAY H THAKKAR, DIPAK A THAKKAR
BRLM	NIRBHAY CAPITAL SERVICES

FORTH COMING IPO

NAME OF THE COMPANY	OMKAR SPECIALITY CHEMICALS LIMITED
Issue Size / FV	PUBLIC ISSUE OF 81,00,000 EQUITY SHARES / FV 10
Issue Type	100% BOOK BUILDING
PROMOTERS	Pravin Herlekar and Omkar Herlekar
BRLM	ALMONDZ GLOBAL SECURITIES LIMITED

FORTH COMING IPO

NAME OF THE COMPANY	PUNJAB & SIND BANK
Issue Size / FV	PUBLIC ISSUE OF UP TO 4,00,00,000 EQUITY SHARES OF RS. 10 EACH
Issue Type	100% BOOK BUILDING
PROMOTERS	GOVERNMENT OF INDIA
BRLM	SBI CAPS, ENAM, ICICI SECURITIES

FORTH COMING IPO

NAME OF THE COMPANY	GALAXY SURFACTANTS LIMITED
Issue Size / FV	5,930,000  EQUITY SHARES OF Rs. 10/- EACH FOR CASH AT PREMIUM
Issue Type	100 %BOOK BUILDING
PROMOTERS	UNNATHAN SHEKHAR,  GOPALKRISHNAN RAMAKRISHNAN,  SHASHIKANT RAYAPPA SHANBHAG AND  SUDHIR DATTARAM PATIL
BRLMs	MOTILAL OSWAL INVESTMENT ADVISORS, CENTRUM CAPITAL LIMITED

IPO NEWS : GUJARAT PIPAVAV, FULLY SUBSCRIBED.

The IPO which closed for QIBs today, has been subscribed by more than 7 times. For retail investors, tomorrow is the last day for subscription.

FIRST CHOICE RECOMMENDS FOR SUBSCRIPTION TO THE ISSUE.

SEARCH THIS BLOG FOR DETAILED ANALYSIS.

IPO LISTING : PRAKASH STEELAGE - STRONG CLOSING AT RS 185/- AGAINST THE ISSUE PRICE OF RS110.

IPO LISTING : PRAKASH STEELAGE LIMITED. LISTS AT 11% PREMIUM.

While analyzing and recommending the IPO for investment, FIRST CHOICE had indicated that PRAKASH STEELAGE will shine in the exchanges. The shares are now trading around Rs 133/- up 20% from IPO price of Rs 110/-.( share price as at 12.00 a.m. today)

Similarly, another IPO - BAJAJ CORP, which got listed recently was up by 20% on the listing day. First choice had strongly recommended for subscription to the issue.

FIRST CHOICE HAS HIT THE BULLS EYE AGAIN.

IPO NEWS : GPPL, GOOD RETAIL RESPONSE

The IPO which closes for QIBs tomorrow and for retail investors on 26-08-10, has received good retail response on the second day. As against 3.85cr shares reserved for retail investors, the company has received bids for 1.23cr (32%) shares in this segment. Normally, retail investors wait till the last day and after taking cue from QIBs, (bids closes one day earlier for QIBs), they submit their bids. Taking this and size of the issue into consideration, the IPO has received good retail response so far.

GPPL ROPES IN 20 ANCHOR INVESTORS.

The IPO of GPPL which opens today, has roped in twenty anchor investors and garnered Rs 92cr. The company is allocating 2.04cr shares at Rs 45 per share for anchor investors. Among those who have invested as anchor investors are Government of Singapore,DSP Blackrock, HDFC MF, Goldman Sachs,JM Financials and Axis MF.

FIRSTCHOICE RECOMMENDS FOR SUBSCRIPTION TO THE ISSUE.

Search this blog for detailed analysis.

IPO NEWS - FUTURE VENTURES PLANS LISTING

NAME OF THE COMPANY	FUTURE VENTURES INDIA LIMITED
Issue Size / FV	RS 750CR / RS10
Issue Type	100% Book Building
PROMOTERS	KISHORE BIYANI, FUTURE CAPITAL INVESTMENT, FUTURE CORPORATE RESOURCES, FUTURE KNOWLEDGE SERVICES , PANTALOON INDUSTRIES  AND PANTALOON RETAIL
BRLMs	ENAM SECURITIES,  JM FINANCIAL,  KOTAK MAHINDRA CAPITAL.

IPO ANALYSIS : GUJARAT PIPAVAV PORT LIMITED - SAFE PASSAGE ENSURED. INVEST.

India‘s first private sector port is entering the capital market. APM Terminals, one of the world’s leading terminal and port operators, are the promoters of Gujarat Pipavav Port Limited (GPPL). GPPL is principally engaged in providing port handling and marine services for container cargo, bulk cargo and LPG cargo.

ISSUE DETAILS

Issue Period	23-O8-10 TO 26-08-10
Issue Size / FV	Public issue Rs 500cr. Offer for sale - 1,17,07,369 shares. FV Rs 10/-
Price band	Rs 42-48.
Issue Type	100% Book Building
Objects	Prepayment of loan (Rs300cr), investment in capital expenditure & equipments (Rs88cr) and general corporate purposes (Rs31cr).
IPO Grading/Agency	CRISIL - GRADE 4
Book Running Lead Manager/s	IDFC-SSKI, KOTAK MAHINDRA CAPITAL,IDBI CAPITAL
Name of the registrar	KARVY COMPUTERSHARE PRIVATE LIMITED.

A strong promoter group - APM Terminals, which brings to the company technological expertise, best practices in port operations, and a strong and experienced management, backs GPPL. APM Terminals Pipavav enjoys favourable oceanographic conditions, well-developed infrastructural facilities, good rail, and road connectivity to the hinterland. GPPL is strategically located in terms of proximity to the landlocked north and northwestern regions, which account for 65%of the container cargo traffic in India.  The container cargo market size of north and northwestern India is expected to grow at a CAGR of 11-12% over the next three to four years. Expect Mundra port, there are no other ports on the western side to handle incremental traffic.
 

APM Terminals Pipavav is positioned well to attract this incremental traffic. The port is located at an approximate distance of 150 nautical miles from the ports located in and around Mumbai. Hence, ships calling to Mumbai could sail to APM Terminals Pipavav if Mumbai port is congested.

APM  Terminals  Pipavav  is  strategically  located  near  the  entrance  of  the  Gulf  of  Khambhat ,on the main maritime trade routes, which helps us to serve imports from and exports  to  the Middle East, Asia, Africa,  the United States, Europe and other  international destinations.

FINANCIALS: 

The Company has not earned profit since its inception in 1992. For the year ended Dec- 09, the total revenue earned was Rs 224.49cr and net loss of Rs 117.57cr. In the first quarter of current year (as on 31-03-10), the figures were Rs 56.77cr and Rs (-) 27.76cr respectively. The  accumulated loss is around Rs 807.89cr. However, the net worth of the company is still in positive with Rs 280.10cr.

STRENGTHS:

• The port is strategically located.
• Benefit from the relationship with the promoter, leading port operator in the world.
• Well-developed port infrastructure.
• Experienced management team.
• Ability to handle diverse cargo portfolio.

RISKS:

GPPL was unable to meet the Minimum Guaranteed Quantity and was subjected to non-fulfillment liability. 

The company faces risks relating to reliance on concessions and licenses from government and quasi-governmental organisations.  GPPL may be adversely affected by increases and/or changes in royalties and fees payable.

DEMAND OUT LOOK

As per CRISIL, the total traffic of coal at Indian ports is expected to grow at a CAGR of 7.2% from 91.9 mn tonnes in 2008-09 to 130 mn tonnes by 2013-14. Coal, with a share of 44% of the bulk cargo as of September 2009, is the major bulk cargo commodity handled at the APM Terminals Pipavav. Six power plants are being commissioned close to APM Terminals Pipavav and 11,164 MW of power generation capacity will be added in the state by 2012. This will translate into a coal requirement of around 45 mtpa. The increase in demand for coal will help boost the coal traffic at APM Terminals Pipavav.

RECOMMENDATIONS:

APM Terminals, one of the most respected and professionally run container terminal operators in the world, operates Pipavav port. High standards and operational efficiency are the hallmark of the APM Terminals ports worldwide.

Gujarat Pipavav has excellent cargo handling facility, critical connectivity, strategically located.

Mr. Prakash Tulsiani, who has held several management positions in the A.P. Moller - Maersk Group, prior to joining the company, heads GPPL’s management. 

The company has invested over Rs 2,000 cr for the development of port in the past. It has a right to develop 1,561-acres of land at the port, of which around 485-acres has been developed.

The growth story has just begun.  The issue is attractively priced at Rs 42-48.  APPLY, for both short term and long term gains.

Micro finance IPOs - Rob the Poor to enrich the Rich

Among others, a listed company's traditional obligation is to create value for its shareholders, while the mission of microfinance — loans typically under Rs10,000/- for starting businesses, that banks won't make - is to lift people out of poverty.

These are irreconcilable objectives. At whose cost, these companies are trying to create value for its shareholders. The poor, the oppressed and the downtrodden.

After the euphoria of IPO is over, only the promoters, Venture Capitalists, PE Investors and others who had invested in the company, prior to the company going public, at a price, much lower than what is offered to the public, will reach rich benefits.

Both IPO investors and the poor borrowers have to fend for themselves.

NEW GUIDE LINES - STRAIGHT EFFECT ON MICRO FINANCE INSTITUTIONS

In the last few days, some interesting development has taken place in the Financial sector, particularly concerning the micro finance segment. Firstly, RBI,in its review meeting with the chiefs of PSU banks has raised concern over bank lending to MFIs which are into profiteering. The MFIs borrow from banks around 15%p.a., which is categorized as priority sector lending and lends at usurious rate in the rural areas.

Secondly, on the instructions from the finance ministry, the PSU banks have submitted a comprehensive plan for financial inclusion, including aggressive branch expansion in un banked rural areas.

On 11-08-10, the RBI released the discussion papers on new bank licensing norms. Among others, it stipulates that the new bank have to open 50% of their branches in rural un banked areas.

These measures are going to have far reaching consequences on the set-up and functioning of micro finance institutions and their long term sustainability.

COAL INDIA - IPO ANALYSIS

IPO ANALYSIS: COAL INDIA LIMITED – ROCK SOLID – INVEST

Pride of India, energy boost for every ones’ portfolio.

The world’s largest coal producing company and the world’s largest coal reserve holder is entering the capital market.  This is likely to be the largest IPO too. The government of India is divesting 10% stake as part of the on going disinvest programme.

Coal India Limited (CIL) operates 471 mines in 21 major coalfields across eight states in India, including 163 open cast mines, 273 underground mines and 35 mixed mines (which include both open cast and underground mines). CIL produces non-coking coal and coking coal of various grades for diverse applications. Non-coking coal represents a substantial majority of the raw coal production, and represented 93.1%, 93.4% and 91.6% of our total coal production in fiscal 2008, 2009 and 2010, respectively. Most of our coal production is from open cast mines. CIL/ its subsidiaries, currently, implementing 45 projects, comprising 22-capacity expansion projects for existing mines and 23 new mine projects.

The company produced 431.26 million tons of coal in fiscal 2010. This is approximately 81% of the coal produced in the country.

ISSUE DETAILS

Issue Period	OCT 18 -21, 2010
Issue Size / FV	63,16,36,440 equity shares of Rs 10 each.
Price band	Around Rs 200/-
Issue Type	100% BOOK BUILDING
Objects	Divestment. The Company will not receive any proceeds from the issue.
IPO Grading/Agency	CRISIL GRADE - 5/5
Book Running Lead Manager/s	CITI GROUP, DEUTSCHE BANK, B of A Merrill Lynch, ENAM, KOTAK, MORGAN STANLEY.

FINANCIALS:

(CONSOLIDATED)   -  RS IN CRORES

	2008	2009	2010
TOTAL REVENUE	38616.69	46064.06	52592.29
NET PROFIT	5243.27	2078.69	9622.44
EPS (Rs)	8.30	3.29	15.60

EQUITY 6316.36 CR

STRENGTHS:

• The largest coal producer and one of the largest reserve holders of coal in the world.
• Well positioned to capitalize on the high demand for coal in India. 
• Track record of growth and cost efficient operations. 
• Strong track record of financial performance. 
• Strong capabilities for exploration, mine planning, research and development.
• Experienced senior management team. 
• Capitalize on the significant demand-supply gap for coal in India. 
• E-Auction pricing mechanisms. 
• Well positioned to acquire strategic international resources or mining rights and identify joint development opportunities. 

INDIAN COAL INDUSTRY

As of April 2009, the geological resource of Indian coal was 276.81 billion tons (Source: GSI, GoI). In India, coal is the prime fuel used to fire thermal power plants due to its availability and affordability. Coal is the dominant source of energy and met 52.4%, while oil and natural gas met approximately 41.6%, of the total primary energy requirement of India in fiscal 2009 (Source: BP Statistics). As projected by the Planning Commission of the GoI in the Integrated Energy Policy, 2006, coal is projected to meet over 50.0% of the primary commercial energy requirement by fiscal 2032. The coal sector in India is primarily dominated by the PSUs under the central and the state governments, as more than 90.0% of the coal produced in India in fiscal 2009 was by government owned companies (Source: CRISIL Coal Outlook). 

COAL RESERVES AND RESOURCES

As of April 1, 2010, CIL had total coal resources of 64,786 million tons, comprising,  Proved Geological Reserves of 52,546 million tons, Indicated Geological Reserves of 10,298 million tons and Inferred Geological Reserves of 1,942 million tons. From the total coal resources of 64,786 million tons, 30,356 million tons had been considered for mining studies (mine planning and feasibility studies), and the remaining coal resources of 34,430 million tons had not yet been considered for such mining studies. Of the 30,356 million tons of coal resources that had been considered for mining studies, 21,754 million tons has been estimated as the Extractable Reserves.

PRICING OF COAL

The pricing of coal was deregulated pursuing to the colliery control order 2000 with effect from January 1, 2000 subsequent to which  the coal producing companies were entitled to fix the coal prices on their own and revise the same periodically. The pricing of coal is also based on factors such as the type of coal, its net calorific value, the content level of impurities. The coal price is revised considering the escalation in input cost, inflation and

landed cost of imported coal. In India, coal price is highly competitive at all destinations of the country and rise in price position after deregulation has been less than inflation.

SUBSIDIARIES OF CIL:

·         Bharat coking coal limited.

·        Central Coalfields Limited

·        Western Coalfields Limited

·        Eastern Coalfields Limited Central Mine Planning and Design Institute Limited (CMPDIL)

·        Indian Institute of Coal Management (IICM)

·        Mahanadi Coalfields Limited

·        South Eastern Coalfields Limited

·        North Eastern Coalfields Limited.

·        Northern Coalfields Limited

VALUATION AND RECOMMENDATIONS

The issue is likely to be priced around Rs 200/- At this price, the Company demands a valuation of 13x on its estimated EPS of FY 11. INVEST.

CIL’s vision is to emerge from the position of domestic leader to leading global player in the energy sector by adopting best practices from mine to market with due care to environmental and social sustenance.

Pride of India, energy boost for every ones’ portfolio.

IPO NEWS : PRAKASH STEELAGE - FINAL TALLY 4.53 TIMES. RETAIL 6.22 TIMES

IPO NEWS: FUTURE VENTURES, BHILWARA ENERGY PLANS IPO

Bhilwara energy is planning an IPO for part financing the expansion programme. This isuue could be around Rs 1000cr.

Similarly, Future Ventures will be filing the papers with SEBI for the IPO.

IPO NEWS : COAL INDIA IPO IN OCTOBER

The much awaited India's biggest issue would hit the market in the third week of Oct.The government intends to raise around Rs 15000cr from the IPO.

FOR DETAILED ANALYSIS SEARCH THIS BLOG.

LENDING TO MICRO FINANCE INSTITUTIONS - REGULATOR STEPS IN.

The regulator has stepped in. RBI, in its recent review meeting with the Chiefs of Banks has raised concern over lending to for-profit MFIs. The analysis of SKS Micro IPO by FIRSTCHOICE has again proved correct. In the first week of July 2010 itself FIRSTCHOICE had indicated that the regulators would step in and take actions against profiteering MFIs.

IPO NEWS :1. BAJAJ CORP. SUBSCRIBED 19 TIMES. RETAIL 6.62 TIMES. 2. PRAKASH STEELAGE SUBSCRIBED 98% ON DAY -1

FORTHCOMING IPO

NAME OF THE COMPANY	BETUL OIL LIMITED
BUSINESS	Refining of edible oils, manufacture and trading of de-oiled cakes, animal feeds, specialty ingredients and development of hybrid seeds.
PROMOTERS	SHREANS DAGA,  VARUN DAGA,  KANCHAN DAGA AND PRAMOD KUMAR DAGA HUF
ISSUE SIZE	Public issue of12,200,000 equity shares
Premium/ FV	-
BRLM	ANAND RATHI ADVISORS LIMITED

IPO NEWS BAJAJ CORP

The IPO, which will close on 05-08-10, has been fully subscribed, as per SEBI website.

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The updates on the latest posts are now be available on Twitter @firstchoiceipo

IPO ANALYSIS: PRAKASH STEELAGE LIMITED – WILL SHINE – INVEST.

The Gujarat based stainless steel pipes and tube manufacturer is entering the capital market on 05-08-10, with public issue of 62,50,000 equity shares of Rs 10 FV in the price band of Rs 100-110. The company plans to raise around Rs 70 cr through the issue. Keynote Corporate Services Limited are the sole BRLM. The IPO will close on 10-08-10.

Prakash C Kanugo and Ashok M Seth, first generation enterprenners, promote the company.

BUSINESS:

Prakash Steelage Limited (PSL) is a flagship company of Prakash Group. The company incorporated in 1991  is engaged in  the  manufacturing  of  seamless  &  welded  stainless  steel  Pipes, Tubes  and  U-tubes. The company has state of the art production units situated at Silvasa and Umbergaon (Gujarat) with total installed production capacity of 12200 MTPA. 

The company is also a government recognized export house, exporting to more than 40 countries. The company caters to diverse set of industries, including oil and gas, power, pharmaceuticals, petrochemicals, automobiles, sugar and dairy.

The company’s top clients include, among others,  BGR Energy Systems, BHEL and KBK chemicals.

OBJECTS OF THE ISSUE:

• Expansion of existing manufacturing facility at Umbergaon, Gujarat.
• Meet the additional working capital requirement.
• General corporate purposes.

FINANCIALS:

The company achieved a turnover of Rs 440 cr and net profit after tax of Rs 17.50 cr for the year ended March 31, 2010.  The figures for the FY 09 were Rs 322.47cr and Rs 7.49cr respectively.

MATTERS OF CONCERN:

·         Corporate governance -The income-tax authorities have carried out search and seizure operations in the premises of the Company and during this operation Mr. Prakash C. Kanugo has made certain voluntary disclosures in relation to undisclosed income on behalf of himself and his related individuals/group companies/concerns, which included the Company. Under which, tax paid on the un declared income was Rs. 2,70,96,896/-

·         The company experienced a negative Operating Cash Flow from activities in the Financial Year 2008-09, 2007-08, 2006-07 and 2005-06.

VALUATION:

Based on the capacity expansion from12, 200 tonnes to 19,000 tonnes, the company is likely to achieve a CAGR around 30% for FY 11. The company specializes in meeting specific requirements of customers and offers complete solution for stainless steel welded & seamless pipes and tubes, for which there is growing demand.

On the post issue capital of Rs 17.50cr, the company is likely to post an EPS of Rs 15/.

At Rs 100-110, the issue is attractively priced. Compares favorably with other established and listed entities like Zenith Birla and Ratnamani metals and tubes. APPLY.

IPO NEWS :BAJAJ CORP SUBSCRIBED TO THE EXTENT OF 73%, ON FIRST DAY

FORTH COMING IPO

NAME OF THE COMPANY	Birla Pacifc Medspa Limited
BUSINESS	Business of beauty and healthcare treatments, health and fitness resorts. ( under brand name Evolve Medspa)
PROMOTERS	Yashovardhan Birla and Birla Wellness & Healthcare Private Limited
ISSUE SIZE	Rs 65.18cr
Premium/ FV	-
BRLM	Arihant Capital Markets Limited
OBJECTS	To meet the capital expenditure towards establishing 55 outlets of Evolve Medspa, To meet expenses towards brand promotion and To meet the working capital requirements.

IPO ANALYSIS: BAJAJ CORP LIMITED - MARKET LEADER, TRUST WORTHY- INVEST.

The Shishir Bajaj group company is entering the capital market on 02-08-10 with public issue of 45,00,000 equity shares of Rs 5/- each in the price band of Rs 630-690. The issue will close on 05-08-10. Kotak Mahindra Capital Company Limited are the sole BRLM. The company is diluting 15.3% of the equity.



The ‘Bajaj’ brand has more than five decades of history and has been associated with product categories like two-wheelers, FMCG, financial services and other consumer products. It enjoys a strong brand recall both in the rural and urban markets. The demerger of the Bajaj Group continues to allow all the involved parties to use the ‘Bajaj’ brand.


Bajaj Corp primarily operates in only one business line - hair oils. Oral care forms a very small part of the overall business. The oldest brand is Bajaj Brahmi Amla, in existence since 1953. The other brands include Bajaj Amla Shikakai, Bajaj Jasmine Hair Oil and Bajaj Kala Dant Manjan. Bajaj Corp is the third largest producer of hair oils and the largest producer of light hair oils.

Bajaj Corp derives majority of its revenues from a single product, Bajaj Almond Drops. It is value-added light hair oil and commands a premium. Bajaj Almond Drops is the market leader in the light hair oil segment with a 50% market share.


OBJECTS OF THE ISSUE:

The company intends to utilize the funds for product promotion, acquisition and for general corporate purposes.

FINANCIALS:

In 9MFY10, the company’s net revenues were Rs 2.08.cr and PAT margin was at 27.2%.

PRODUCTS:

Bajaj Corp manufactures and markets five major brands. The flagship brand, Bajaj Almond Drops, is the market leader in the light hair oil segment with 50% market share. Other product includes Bajaj Brahmi Amla, Bajaj Amla Shikakai and Bajaj Jasmine Hair Oil and oral care products under the brand name Bajaj Kala Dant Manjan.

STRENGTHS:

• Market leader in light hair oil segment with 50% market share.
• Strong brand equity - known for reliability, quality and competitive price.
• Established distribution net work.
• Experienced, efficient and professional management.
• IPO grade - 4 by CRISIL.
• Debt free company.
• Manufacturing facilities are located at tax-free zone.

RISKS:

• The company depends heavily on ‘Almond Drops’. Almond Drops hair oil contributed 92.0% and 92.7% of the total sales and gross profit, respectively, for the nine month period ended Dec -09.
• The company operates in a highly competitive FMCG market.


VALUATION AND RECOMMENDATIONS.

The EPS for the FY10 is Rs 33.57. At the higher end of the price band, the P/E is around 20 times. Compares favorably with other established FMCG players like Colgate (30 PE), Dabur India (38 PE) and Hindustan Unilever (27 PE). A sure winner from the Bajaj stable. There is every thing in the company that an investor looking for. IPO investment opportunity of the year. INVEST