Tuesday, November 30, 2010

IPO NEWS : ONE 97 DEFERS THE ISSUE TO 13-12-10.

The IPO, which should have been  opened on 01-12-10, has been postponed to 13-12-10. The issue will now close on 16-12-10. The price band has not been indicated. First Choice advises the investors to stay away from the issue.

IPO SUBSCRIPTION STATUS -MOIL

The issue got subscription to the extent of 28 times on the penultimate day. The issue closed for QIB bidders today and will close for retail investors tomorrow.

Monday, November 29, 2010

FORTHCOMING IPOS



NAME OF THE COMPANY

BROOKS LABORATORIES LIMITED

PROMOTERS
Atul Ranchal and Rajesh Mahajan

ISSUE SIZE

RS. 6300 LACS


BRLM
D & A FINANCIAL SERVICES PRIVATE LIMITED

REGISTRAR
LINK INTIME INDIA PRIVATE LIMITED





NAME OF THE COMPANY

PLASTENE INDIA LIMITED

PROMOTERS
CHAMPALAL G. PAREKH,  PRAKASH H. PAREKH, MRS. MADHU P. PAREKH AND PRAKASH H. PAREKH (HUF)

ISSUE SIZE
PUBLIC ISSUE OF 1,05,00,000 EQUITY SHARES OF FACE VALUE OF ` 10 EACH

BRLM
Motilal Oswal Investment Advisors Private Limited 

REGISTRAR
Karvy Computershare Private Limited

 


NAME OF THE COMPANY
READYMADE STEEL INDIA LIMITED

PROMOTERS

  ANIL AGRAWAL

ISSUE SIZE

RS. 4131 LAC

BRLM

Arihant Capital Markets

REGISTRAR

Big Share Services

Sunday, November 28, 2010

KNOW YOUR BRLM – KEYNOTE CAPITAL ADVISORS



Keynote has ventured in to manage 6 IPOS, out of which only 3 are trading above the issue price, thus giving a success rate of 50%. Where as the First Choice recommendations were correct in all the cases, giving a success rate of 100%.


NAME OF THE COMPANY

MONTH

ISSUE PRICE

CURRENT
PRICE

FIRST CHOICE
RECOMMENDATIONS
THANGAMAYIL JEWELLERS

JAN

75

159

APPLY

EMMBI POLY

FEB

45

18

AVOID

FAT PIPE

JUNE

85

ISSUE WITHDRAWN –POOR RESPONSE

AVOID

PRAKSAH STEELAGE

AUG

110

154

INVEST

BEDMUTHA

SEP

102

73#

AVOID

GRAVITA

NOV

125

234**

INVEST FOR LISTING GAINS

# Bedmutha has created history being locked in for 27(down wards) days out of the first 30 days of trading.

** The shares would be available below the offer price within 6 months of listing.

Saturday, November 27, 2010

FORTHCOMING IPO




NAME OF THE COMPANY
SEMANTIC SPACE TECHNOLOGIES LIMITED

PROMOTERS
SATYANARAYANA BOLLI,  MS. SRIDEVI BOLLI, MR. RAMA RAO BOLLI AND ICON INVESTMENTS LIMITED

ISSUE SIZE
PUBLIC ISSUE OF 4,500,000 EQUITY SHARES OF RS. 10/- EACH

BRLM
INDIA INFOLINE LIMITED

REGISTRAR
KARVY COMPUTERSHARE PRIVATE LIMITED

IPOs OF SEPT 2010 – PERFORMANCE VS FIRST CHOICE’S RECOMMENDATIONS

Out of the 16 IPOs that  hit the market in Sept 2010, our recommendations were correct in respect of 13 IPOs.


NAME OF THE COMPANY
ISSUE OPEN ED/CLOSED ON


ISSUE PRICE

CMP

FIRST CHOICE
RECOMMENDATIONS
INDOSOLAR
13-09/ 15-09
 29.00
 Below offer price
AVOID
TIRUPATI INKS

14-09/ 17-09
 43.00
 Do
AVOID
CAREER POINT
16-09/ 21-09
310.00
Above offer price
AVOID
MICROSEC
17-9 / 21-09
118.00
 Below offer price
AVOID
EROS INTERNATIONAL
17-09 / 21-09
175.00

Above offer price
             INVEST
ELECTRO STEEL
21-09 / 24-09
  11.00
Below offer price
AVOID
ORIENT GREEN POWER
21-09 / 24-09
47.00

do
AVOID
RAMKY INFRA

21-09 / 23-09
450.00
do
AVOID

CANTABIL
22-09 / 27-09
135.00
Below offer price
            INVEST

GALLANT ISPAT

22-09 / 24-09


Above offer price

AVOID
VA TECH WABAG
22-09 / 27-09


do
            INVEST
TECPRO SYSTEMS
23-09 / 28-09


do
            INVEST
ASHOKA BUILDCON
24-09 / 28-09


Below offer price
            INVEST
SEA TV NET WORKS
27-09 / 29-09

Below offer price
AVOID
BEDMUTHA INDS
28-09 / 01-10

do
AVOID
CEBBCO
30-09 / 05-10

do
AVOID


KNOW YOUR BRLM – ENAM SECURITIES

 

The performance of the issues managed by the leading merchant banker in the country is pathetic. From 1st Jan 2010 till date, the company has managed 15 issues. Out of the 15 issues only 7 IPOs are quoting above the issue price. The company’s success rate is 47%.  Where as First Choice IPO’s recommendations were correct in 13 out of the 15 IPO managed by Enam, thus giving a success rate of 87%.


IPOs quoting below the offer price


NAME OF THE COMPANY

MONTH

ISSUE PRICE

PRICE AS ON 26-11-10

FIRST CHOICE RECOMMENDATIONS

VASCON

JAN

165

120

AVOID

D B REALTY

JAN

468

210

AVOID

JAYPEE INFRA

APRIL

102

 69

AVOID

INDOSOLAR

SEPT

 29

 24

AVOID

RAMKY INFRA

SEPT

450

340

AVOID

ELECTRO STEEL

SEPT

11

 10

AVOID

ASHOKA BUILDCON

SEPT

324

295

INVEST

PRESTIGE ESTATES


OCT


183



AVOID


IPOs QUOTING ABOVE THE ISSUE PRICE.




NAME OF THE COMPANY

MONTH

ISSUE PRICE

PRICE AS ON 26-11-10

FIRST CHOICE RECOMMENDATIONS

UBI

FEB

66

121

INVEST

ILFS TRANSPORT

MARCH

258

282

AVOID

PERSISTANT SYSTEM

MARCH

310

376

INVEST

EROS

SEPT

175

175

INVEST

OBEROI REALTY

OCT

260

268

INVEST

COAL INDIA

OCT

245

313

INVEST

VATECH

SEPT

1310

1649

INVEST






Friday, November 26, 2010

IPO ANALYSIS: ONE 97 COMMUNICATIONS LIMITED – WEAK SIGNAL: AVOID




The company is entering the capital markets at the wrong time. One do not know where the 2G scam findings will lead to and what will be the repercussions of the likely  hardening of the guidelines by the government. Almost all companies, in the segment, either directly or indirectly, are involved in some controversy or the other. The one time darlings of the investors / traders – Bharati Airtel and Reliance Communications are trading at all time low in the exchanges.  The sector has strong growth potential in the long term. However, in the near term, because of the problems in spectrum allocation, the sentiment is negative. The segment is highly competitive.

One 97 Communications are one of the leading provider of telecommunications value added services. The company offer products and services to meet the needs of telecom service providers, consumers (mobile phone users) and to the enterprises. One 97 develops and also purchase content and applications, provide the relevant platform for delivery of the products and services and integrate these products and services with the core network elements of telecom service providers.

The applications can be deployed on any telecom network and accessed from most mobile handsets. One 97 utilizes interactive voice response (IVR) system or voice, Short Message Services (SMS), Unstructured Supplementary Services Data (USSD) and Wireless Application Protocol (WAP) technology to deliver the products and services. 

Network Services

The focus of the network services is to assist telecom service providers in enhancing network efficiency and improving their revenues and profitability by delivering innovative solutions that enhance their subscribers’ expectations.

The company also provides customer life cycle management services that are aimed at increasing average revenue per user, including self-care portals, service provisioning portals, loyalty programs and customer churn
management services. The services such as toll-free info lines, customer communication tools through outbound dialers, tagged-SMS, missed-call back services and USSD inserts, further enable the telecom service provider
customers to enhance their subscribers’ experiences while using their respective networks




Services for mobile phone users

One 97 offers a broad range of mobile content, applications and commerce services to consumers, for which the company earns revenue through revenue sharing arrangements with telecom service providers. The content and applications include, music browsing, ring-tone downloads among others.

OBJECTS OF THE ISSUE:

 The company intends to utilize the funds for:

(i)  Procuring telecom equipment and software for installation. 
(ii)  Procurement of Other Fixed Assets.
(iii) General corporate purposes.


FINANCIALS:

Rs in crores



09

10

30-06-10

TOTAL INCOME

81.39

119.05

36.12

PAT

 2.13

 16.17

 6.47

EPS

 0.89

 6.33

 9.80#

RONW

1.76%

11.95%

   -

# on post issue share capital, annualized.



MATTERS OF CONCERNS:


1. The rating agency CRISIL has awarded grade 3 to the IPO indicating, average fundamentals.

2. The company has derived and will continue to derive a significant portion of the income from a few major customers. For the three month period ended June 30, 2010 and fiscals 2010, 2009 and 2008, the five largest customers accounted for approximately 80.67%, 78.26%, 91.38% and 89.79% of our total revenue, respectively.

3. One of the independent directors, P N Vijay was earlier charged, for alleged violation of insider trading by SEBI.

4. The company was served with notice by RBI for FEMA violations.

5. The company is subject to risks associated with the challenges faced by the mobile communications value added services industry in which the company operates. The markets in which it operates are highly competitive and some of the competitors have greater resources than one 97. The telecom service provider customers are subject to extensive government regulation. The licenses and the regulatory environment in which the company operates are subject to change.

6. The debtors’ realization is in excess of 100 days.


OUTLOOK FOR TELECOM SECTOR:

According to CRISIL Research, the industry will grow at a CAGR of 21% from Rs 40.8 bn in FY09 to Rs 135.3 bn in FY15. The growth will be driven by telecom service providers’ efforts to increase the usage of VAS to enhance their average revenue per user, increasing availability of VAS-compatible affordable handsets, growing popularity of content on mobile and launch of 3G services. The report also says that the implementation of mobile number portability and consolidation amongst TSPs will benefit established VAS providers.

STRENGTHS:

The long-standing relationships with telecom service providers, which creates technological and time-to-market barriers to entry for new entrants.

The diversified income base, which reduces the reliance on any single market, telecom service provider, product or service.


VALUATION AND RECOMMENDATIONS:


The company’s RONW is below average.  For FY 09, the PAT percentage was just 2.2%. However, for FY 10 the percentage has gone to 16%, which is to be taken with a pinch of salt. The shares of established service providers in the segment are languishing in the exchanges. The company’s fundamentals are not so strong. Although the company’s pre issue share capital is Rs 22.84cr, the company has a preference capital of another Rs 48cr. For this kind of capital, the revenues and earnings recorded by the company are not inspiring. There are industry specific risks, incident risks. Investors are advised to stay away from the issue.

Note: The Company had earlier received funding from Intel Capital, Softbank Asia Infrastructure Fund Partners and Silicon Valley Bank. Even the SKS Micro had the funding by the greats of the financial and corporate sector like Sequoia capital, Soros and N R Narayana Murhty. The IPO came at Rs 985 and within three months, the shares are trading at almost 30% discount to the issue price. Do not get misled by the big names associated with the company. The issue opens on 1-12-10 and closes on 6-12-10. IDFC Capital and Avendus Capital are the BRLMs.