RELIANCE POWER, HINDALCO COAL BLOCK GETS GOVT NOD

The central government has cleared the projects of Reliance Power and Essar- Hindalco to start mining at their respective coal blocks.

RELIANCE MUTUAL FUND BUYS SPECIALITY RESTAURANTS SHARES

Reliance Mutual Fund has purchased 4,57,405 shares of newly listed Speciality at Rs 158.88 a share, in BSE. One fails to understand the logic of Reliance Mutual Fund to buy at this rate. They could have got any number of shares had they subscribed to IPO at Rs 150, almost Rs 9 less than the average price. And that is how our mutual funds functions.

RIL AND HERO MOTOR CORP WILL SIZZLE BEFORE EXPIRY

TATA MOTORS IN TOP GEAR

Tata Motor's consolidated net profit for the quarter ended March 12 was Rs 6250 crore , as against Rs 2623 crore from the same period a year previously.

Consolidated revenue rose 44% to Rs 50609 crore, compared with Rs 35148 crore a year ago.

Tata Motors has sold a total of 9,26,353 units of passenger and commercial vehicles during 2011-12, registering a rise of 10.7% over the previous fiscal.

SUNPHARMA REPORTS 40% JUMP IN NET PROFITS

Sunpharma for the year ended March 31, 2012, posted a net profit of Rs 2,587.25 crore compared to Rs 1,816.06 crore in 2010-11.

 
The company's board has recommended a dividend of Rs 4.25 per equity share of Re 1 each for the financial year ended March 31, 2012.

TOP BRANDS IN INDIA

According to a study conducted by M&C Saatchi Group, the top 10 desirable brands in India are: Microsoft, BMW, Google, Apple, Adidas, Mercedes, Audi, Disney, Sony and IBM.

COMMON ENTRANCE TEST FOR IIT, NIT AND IIITS

From 2013, there will be common entrance test for IITs and other central institutes like NITs and IIITs. Students will have to sit under new a format of entrance test which will also take plus two board results into consideration.

The announcement was made today by HRD Minister Kapil Sibal after chairing a meeting of the joint councils of IITs, NITs and IIITs. This system will replace the IIT-JEE and AIEEE.

6093 IS JAGAN'S NUMBER

The son of late Andhra Pradesh chief minister,  current M P, Jagan Reddy,  was allotted prisoner number 6,093 after he was sent to judicial custody for 14 days by a CBI court in the disproportionate assets case.

LISTING NEWS - SPECIALITY RESTAURANTS TO LIST ON 30-05-12.

The IPO whose shares have been allotted at Rs 150 will list on 30-05-12. The scrip will be in Trade-for-Trade segment till June 12, 2012.

           

RUPEE MOVEMENT WILL NOT IMPACT RATINGS - MOODY'S

Rating agency Moody's says that the sliding rupee will not impact India's sovereign ratings, but may hurt private sector companies with large overseas debts.

Significant Indian rupee depreciation is insignificant for sovereign credit..

The report further pointed out that the current rupee volatility will be "less damaging than in 1991, when low reserves and a widening current account deficit prompted India's last balance of payment crisis". 

Recently rupee slumped to record low of Rs 56.40 a dollar.

FIIs NET BUY IN CASH MARKET

FIIs, for the last couple of weeks, were net sellers in cash market. With the dollar cooling around Rs 55, the sentiments seems to be have turned positive. FIIs net purchased Rs 109cr where as DIIs too were net buyers to the extent of Rs 168cr. Today's rally was led by bank stocks. SBI, ICICI, BOB, AXIS, Kotak all closed in the green.

COAL INDIA FY 12 RESULTS: QUANTUM JUMP IN CONSOLIDATED NET PROFITS.

Coal India has reported quantum jump in the consolidated net profits for FY 12. Coal India's net profit stood at Rs 14788.20 crore  for the year ended March 31, 2012 as compared to Rs 10867.35 crore a year ago.

During the same period, consolidated total income rose to Rs 69952.33 crore against Rs 55101.42 crore in March 31, 2011. The fourth quarter results were hit by stagnant volumes and a steep increase in wage bills, the group's net profit in the fourth quarter of 2012 declined little below 5% to Rs 4013.41 crore as compared to Rs 4220.92 crore in the previous year.

EPS for the full year stood at Rs 12.83.

The stock closed at Rs 315 on NSE.

IPL 5 : KKR ARE THE NEW EMPEROR

CSK   190 / 3                                                          KKR 192 / 5

CSK scored 190 which many thought a target difficult to surpass. Suresh Riana was the star performer scoring 73 runs just of 38 deliveries.  For KKR, the second top scorer of this tournament, Gambhir, was out in the first over. Again many thought all over for KKR.  But KKR found another hero in the all important match. Manvider Bisla cored 89 in just 48 balls. There was useful contribution from-ever dependable J. Kallis. And Manoj Tiwari finished in style.  KKR  won the DLF IPL final with 2 ball to spare.

ITC PROFIT SURGES

ITC reported 26 per cent increase in its standalone net profit for the quarter ended March at Rs 1,614.36 crore, compared to a net profit of Rs 1,281.48 crore in the same period last year.

The total income during the fourth quarter also went up by 18.13 per cent to Rs 7,162.51 crore. The company's total income in FY'12 stood at Rs 27,336.

For the entire 2011-12 financial year, the consolidated net profit rose by 24.72 per cent to Rs 6,258.14 crore from Rs 5,017.93 crore in the previous fiscal. 

The stock will react positively on Monday.

IPL 5 : CSK WIN BY 86 RUNS AGAINST DD

CSK 222 / 5 (20 OVERS)                                DD 136 ALL OUT IN 16.5 0VERS

For Delhi, other than winning the toss nothing went right. Having sent to bat, CSK with the help of a brilliant century by Murli Vijay, scored 222 runs for 5 wickets in 20 overs. Murli scored 113 runs just in 58 balls. DD could muster 136 runs only. Ashwin took 3 wickets for CSK.

STOCK WATCH : SHREE GANESH JEWELLERY HOUSE - BUY

The company has posted a stellar performance for FY 12. The likely EPS for FY 13 will be around Rs 100. The company has good dividend payment record too. CMP Rs 85. (FV Rs10). Promoters hold around 70%. Shares are available at less than the book value.

IPO LISTING NEWS : SPECIALITY RESTAURANTS

The IPO is likely to be listed on 30-05-12, according to sources.

GOOGLE WINS CASE AGAINST ORACLE

According to Federal District Court of San Francisco, Google did not infringe on any Oracle patents when it used Java software in the Android operating system.

The verdict leaves Oracle with a relatively small claim of copyright infringement, making it almost certain that the judge will not demand a harsh penalty from Google.

BANKS SHOW BETTER EARNINGS IN U S A

The Federal Deposit Insurance Corporation of USA declared that the banking industry earned $35.3 billion in the quarter, compared with $28.7 billion in the period a year earlier. It was the highest level since the second quarter of 2007. Banks with assets exceeding $10 billion accounted for most of the earnings growth in the January to March period. While they make up just 1.4 percent of banks, they accounted for 81 percent of the earnings.

They include Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Most of them have recovered with help from federal bailout money and record-low borrowing rates.

PETROL CAN BE MADE AVAILABLE AT RS 55 PER LITER.

The problem is that we fail to understand is how much petrol really costs. Lets us do the simple arithmetic. International crude oil prices are hovering around US$ 110 per barrel. That translates to about Rs 6160 per barrel, dollar – rupee conversion taken at 56. Each barrel contains about 158.76 liters. So, effectively crude oil costs Rs 38 per liter. Now, add the cost of refining it to petrol or diesel. According to official reports, the refining cost is about 55 paisa per liter. Add about Rs 6 as capital costs for the refinery. Then there's the cost of transportation (Rs 6) and dealer's commission (Rs 1.05). So, adding all that, the price of petrol comes to about Rs 51.60 per liter (average cost, after taking into account the cost of other products obtained). But how much are we actually paying for petrol?

EVEN IF YOU ADD CENTER AND STATES TAX AT RS 3 EACH PER LITER, PETROL CAN BE MADE AVAILABLE IN AND AROUND RS 55.

TOP GLOBAL BRANDS

                                                   

According to a study conducted by Millward Brown, world’s top brands are as follows;                    

                                                  

 BRAND VALUE 2012 ($M)

1. APPLE	182951
2. IBM	115985
3. GOOGLE	107857
4. MCDONALDS	95188
5. MICROSOFT	76651
6. COCA COLA	74286
7. MARLBORO	73612
8. AT&T	68870
9. VERIZON	49151
10. CHINA MOBILE	47041

Except China Mobile, all top brands are American.

TOYOTA MOTOR CORP IS NUMBER ONE AUTO MAKER IN THE WORLD

Toyota overtook GM of USA to become number one auto maker in the world. Toyota sold 2.49 million vehicles for the March ending three months period. GM motors sold 2.28 millions and Germany auto maker Volkswagen sold 2.16 million vehicles.

SKS MICRO - IRDA FINDS IRREGULARITIES IN INSURANCE OPERATIONS.

After Gurumani fiasco one more trouble for SKS Micro on corporate governance issue. IRDA, the insurance regulator, has found irregularities in SKS handling of insurance of its clients. IRDA has been conducting the inspection for a long time. Among others, the irregularities are - receiving the cheques of death claims from its insurers on its name, which is illegal. Collecting higher commission than permitted by the regulator while selling the insurance policies. No wonder the stock touched its yearly low on the exchanges yesterday.

FACEBOOK TUMBLES AGAIN

The much hyped IPO which lost 12% on day 2, trading around $31 a share, down 9% compared to previous day closing.

VODAFONE SUBSCRIBER BASE CROSSES 15CR, IPO MAY BE DELAYED

Vodafone revenues grew by 19.5% to Rs 32,000 crore, and operating profit rose 21.6% to Rs 8549 crore for FY12. The company's subscriber base has crossed 15cr, with the number of data users surging 81% to over 3.5cr users. Average realization per user was Rs 180, compared to Bharti ’s Rs 189 and Idea Cellular ’s Rs 160. 

The second largest mobile service company's IPO may be delayed due to its battle with finance ministry over tax dues.

SKS MICRO TOUCHES NEW LOW

SKS Micro is down 6% at Rs 75.30. The stock tested new low of Rs 73 intra day. More than 20 lacs shares (BSE+NSE) exchanged hands.

FirstchoiceIPO has been giving sell call on the stock, right from Rs 1400 level. The last one given when it was trading around Rs 100.  Due to losses reported in the last 5 quarter, the IPO money of Rs 1600cr plus is almost wiped out from the balance sheet.

RIL PLANS $ 12 BILLION EXPANSION

RIL has lined up a $12 billion expansion of its petrochemical business, the largest since completing its second oil refinery in 2008.

In this regard, RIL is seeking a loan of about $1 billion to fund its petrochemicals and telecom expansion.

RIL is investing over $12 billion over next 4-5 years in the refining and petrochemical industries.

BIOCON TWEAKS BALACE SHEET - ESPIRITO SANTO

According  to a report published in Business Standard , Biocon booked a cash loss of around euro 10 million and a notional loss of euro 21 million in the AxiCorp deal. This was made known by Investment banker - Espirito Santo.

The company structured the deal in a manner that ensured no loss on sale in its P&L (profit and loss account). The report has alleged that Biocon has also not factored in its P&L the $200-million upfront milestone payment it received from Pfizer when the insulin deal between the two companies was called off. Instead, the company, owned by Kiran Mazumdar-Shaw, chose to keep it in its balance sheet and recognize it with R&D costs.

The stock is expected to come under pressure in today's trading.

FACEBOOK LOSES SOME SHINE ON DAY 2

Facebook has lost 11% on day 2. Now fingers are raised against the lead manager Morgan Stanley. 

Aggressive pricing of the IPO by the lead manager is the main reason for its 2nd day debacle, since there were no company's underwriter to support it. Morgan Stanley raised the offering price as high as $38 a share, up from the original estimates of $28 to $35 a share. Investors who have purchased the shares on the listing day around $ 40 a share, have seen their investment eroded by 20%.

IPO NEWS :SPECIALITY RESTAURANTS SETS PRICE AT RS 150

The IPO which  hit the market in the price band of Rs 146-155, has set its allotment price at Rs 150.

The issue was opened during May 16-18, 2012. The issue was over subscribed approximately 2.55 times.

GLOBAL CUES MAY HELP MARKET TO MOVE HIGHER

Markets in U S  and Europe( except FTSE) ended in green. Asian markets too are trading in positive territory. This may help markets here to open in green.

FACEBOOK DOWN 11%,SLIPS BELOW IPO PRICE, ON DAY 2.

The IPO of the decade - Facebook which closed just above its offer price on Friday was trading around $ 33.80 (-11.59%) in the opening trade on day 2.

ZUCKERBERG MARRIES PRISCILLA CHAN

Zuckerberg, Facebook founder, 28 year old multi billionaire has married his longtime girlfriend, Priscilla Chan, last Saturday. 

The couple met almost a decade ago, while attending college at Harvard.
 
Mr. Zuckerberg and Dr. Chan ( just graduated from medical school) also quickly updated their relationship status to say they were married to each other.

RCAP POSTS GOOD RESULTS

Reliance Capital, reported a consolidated net profit of Rs 329 crore in the quarter ended March 31, compared to a net loss of Rs 6 crore in the year-ago period.

R-Cap’s consolidated net profit for 2011-12 rose 57 per cent to Rs 458 crore against Rs 291 crore the year before. The company reported a 20 per cent rise in its total income at Rs 6,627 crore in last year, against Rs 5,536 crore in 2010-11.

STOCK WATCH: SBI - BUY

CMP / FV	1956 / 10
NET PROFIT (2012)	11707CR
NPM (%)	11
52 WEEK HIGH / LOW	2529 / 1576
MARKET CAP	130316CR
EPS	184
REVENUE	106521CR
INDUSTRY	BANKING / FINANCIAL SERVICES

FACEBOOK CREATES ONE MORE RECORD.

More than 57cr shares were traded on the listing day, setting a new record for a stock debut. In just the first few minutes after listing, 10cr shares changed hands.  

The prior record for shares traded on the day of an initial public offering was held by General Motors' (GM), which saw 45.8cr shares trade the day it emerged from government ownership in 2010.

The record-breaking volume was in line with the range expected by traders. Consensus was that between 55cr and 60cr shares of Facebook would move on listing day.

This also makes Friday one of the top 50 trading days ever for a single stock. The current holder of the record for most shares changing hands in a single day is Citigroup which saw 3.8 billion shares trade Dec. 17, 2009.

 

Facebook accounted for 6.5% of the total U.S. stock market volume Friday, and 21% of trading in the NASDAQ composite. The major U.S. markets saw nearly 8.8 billion shares of stock trade.

In rupee terms the turn over is in excess of 1,20,000cr. Some days, the total turnover including futures and options at BSE and NSE struggle to get near that figure.

SBI'S DEPOSITS CROSSES 1 MILLION CRORE

SBI's stand alone deposits, first time in the history of Indian banking industry has crossed 1 million crore. The country's largest lender reported a net profit of Rs 4050cr for the last quarter and Rs 11707cr for the full year 11-12.

There has been all-round improvement in asset quality. The bank for the full year reported an EPS of Rs 184.

CAR, as per basel II stood at 13.86%. Net NPA at 1.82%. SBI has branches in excess of 14000 and SBI group has ATMs around 27200.

FACEBOOK DEBUTES AT PREMIUM

Facebook listed at $42 a share, as against the IPO price of $38. However the share slipped immediately and was trading just above its offer price. A record 8cr shares were traded in the first 30 seconds.

INSTITUTE WITH A DIFFERENCE – ANAND KUMAR DOES IT AGAIN

Anand Kumar led Institute has achieved another milestone this year. 27 of the 30 students from Bihar's Super 30, a free coaching centre for underprivileged students, have cracked the highly competitive Indian Institute of Technology-Joint Entrance Examination (IIT-JEE) this year.

The successful candidates include the wards of a truck mechanic, a farmer, a daily-wage labourer and vendors.

All of them have managed to successfully chase their IIT-JEE dreams at Super 30 with their commitment and hard work, according to Anand Kumar.

Will our listed entities like CareerPoint and M T Educare and others take a cue from Aanad Kumar render selfless service to millions of under privileged students.

BANKS LEAD NIFTY FIGHT BACK

Led by SBI,  bank stocks rallied on the exchanges which helped the sentiments and the index close in the green. Country's largest bank posted better than expected last quarter results. The bears  covered their short positions which helped the stock to gain almost 6%. NIFTY, intra-day, recovered more than 100 points from its low to close at 4891, up 21 points. 

SPECIALITY RESTAURANTS IPO SAILS THROUGH

The IPO which had received just 2% subscription till yesterday, has received more than 2 times subscription on the last day. 

FIIs / QIBs and non Institutional investors helped the IPO to sail through. 


Retail response was very poor.

COAL INDIA, TATA STEEL RESULTS TODAY

The world’s largest coal producing company and the 10th largest steel maker in the world will announce their results today. 

Coal India may report profits around Rs 5000cr for the full year, which will give an EPS of Rs 8.

SBI RESULTS FY 2012

India's largest lender, SBI, is expected to report a net profit  around Rs 4000cr  crore for the fourth quarter of FY12 as against Rs 21 crore in the same period a year ago period. The results will be announced today.

FACEBOOK FIXES IPO AT $38 A SHARE

Facebook has priced its initial public offering at $38 a share, giving the world's No. 1 online social network a $104 billion valuation in the third largest offering in U.S. history.

The offering puts the eight-year-old company, a valuation exceeding that of Hewlett-Packard Co and Dell Inc combined.

IPL 5 : DD VS RCB - GAYLE TON PUTS RCB IN COMMANDING POSITION

Gayle scored blistering 128 runs from 62 balls which helped RCB to post  one of the highest total in DLF IPL 5. RCB finished 215 / 1 in 20 overs. Kohli scored 73 runs of 53 deliveries. Gayle century included 13 mighty sixes and  seven fours.

WALMART POSTS BETTER EARNINGS

The world's largest retailer posted a better-than-expected quarterly profit with EPS of $1.09.

Sales rose 8.6 percent to $112.27 billion. Walmart U.S. same-store sales have risen for three straight quarters following nine consecutive quarterly declines.

Wal-Mart's shares jumped 3.5 percent to $61 in the early trading, on Thursday.

GRAVITA INDIA SPLIT RECORD DATE

GRAVITA INDIA has announced, May 28, 2012, as record date for the
purpose of ‘Face Value Split  from Rs. 10 per share to Rs. 2 per share’.

India Securities (BSE Code: 500204) suspended.

SEBI has suspended trading in India Securities from May 17, 2012.  At present company is constituent of BSE-200 BSE-500 & BSE-Midcap Index, from which it has been deleted.

SPECIALITY RESTAURANTS IPO LIKELY TO BE WITHDRAWN / REVISE PRICE BAND

The IPO at the end of the second day has received just 2% subscription. Tomorrow is the last day for subscription. It is unlikely the IPO will get 98% subscription on the last day, that too at a time where the sentiments in the markets are negative. Under the circumstances either the IPO will be withdrawn or there will be reduction in price band with extended period.

AIDMK AND BJD BACKS SANGMA

AIDMK and BJD are likely to back Sangma of NCP for the presidential post. Recently Sangma had mooted the idea of  having an tribal leader for the top post. Sangma being an tribal leader himself and ex-Congressman, the ruling UPA should not have any problem in endorsing his candidature.

VKS PROJECTS GETS IPO GRADE 1 / 5 FROM CRISIL

VKS Projects, a Mumbai-based EPC company, plans to raise around Rs 55cr from the IPO.  The IPO has been graded by CRISIL and has awarded the lowest grading.

SGX NIFTY IN GREEN

After yesterday's steep fall, SGX NIFTY is trading in green, up by 33 points. Stock Markets here too are expected to open in green and gain momentum afterwards.

STOCK WATCH: HERO MOTOR CORP - BUY

CMP / FV	RS 1881 / 2
NET PROFIT (2012)	2378CR
NPM (%)	10
52 WEEK HIGH / LOW	2279 / 1482
MARKET CAP	37574CR
EPS	RS 119
REVENUE	23579CR
INDUSTRY	2 / 3 WHEELERS

SPECIALITY RESTAURANTS IPO - FIRST DAY FLOP SHOW

The IPO received less than 1% subscription on day one.

SKS MICRO MARKET CAP BELOW RS 600CR

The market cap of SKS Micro has come down below Rs 600cr at today's price of Rs 82. In Sept 2010, the company had a market cap of Rs 10,000cr plus.

CBI RAIDS BSY AND CO

The premier investing agency has raided the residence of BSY in Bangalore and Shimoga. Raids were also conducted on the residence of close aids including his two sons and son-in-law.

The raids are in connection with corruption charges in granting  mining licenses and de-notification of lands.

SPECIALITY RESTAURANTS ROPES IN 5 ANCHOR INVESTORS

The company has allotted 17,60, 912 equity shares to anchor Investors at a price of Rs 150, including share premium of Rs 140. The anchor investors who have picked 20% each  of the above shares are - Morgan Stanley MF, International Opportunities Fund, SBI Magnum Global Fund, Reliance Capital Trustee and HSBC India Alpha Fund.

NORMAL MONSOON, TO HIT SOUTH COAST IN JUNE FIRST WEEK

The monsoon is likely to hit the south coast in the first week of June, according to Meteorological Department. This is the third successive year that India is having a normal monsoon.

HIRING UP IN SOCIAL SERVICES SECTOR

According to Monster.com, social services sector continued to see high growth in April 2012 compared to the same month last year.

Driven by increased hiring activity in a majority of sectors, led social services, the overall job market improved in April.

Similar trends were seen in healthcare, biotechnology and life sciences as well as pharmaceuticals sectors.

PANTALOON REPORTS 99% DECLINE IN PROFITS

Pantaloon Retail  reported 98.53 per cent decline in consolidated net profit for the third quarter ended March 31, 2012 at Rs 6 lakh due to increase in interest costs.

The company's consolidated net profit for the corresponding quarter of last year was Rs 4.09 crore. During the third quarter of this year, the company had minority interest cost of Rs 14.28 crore, compared to Rs 1.15 crore in the previous year. 

The group has undertaken various restructuring plans to cut interest burden.

BLACKBERRYS CONSUMERS ARE LESS HAPPY

The American Customer Satisfaction Index has  found that RIM’s customers were the least satisfied cellphone users among customers of the seven phone makers it tracked in its survey during the first quarter of this year.

On a scale of up to 100, RIM’s aggregate satisfaction score is 69. By contrast Apple, the cellphone satisfaction index leader, scored 83, although that measure was slightly below the ranking of 87 Apple gets for Macintosh computers and iPads.

FACEBOOK REVISES IPO SIZE

Facebook Inc  which had originally intended to sell about 337.4 million shares has increased the size by 85 million shares to about 422 million. Similarly the price range too has been revised up wards to $34 to $38 a share, from $28 to $35 previously. 

The world's No. 1 social network company would raise $15.2 billion in one of the largest U.S. initial public offerings ever.

SPECIALITY RESTAURANTS IPO OPENS TODAY

Speciality Restaurants IPO, in the price band of Rs 146-155 opens for subscription today. The valuation of the IPO is expensive. In the last few weeks, two IPOs, which were aggressively priced were withdrawn due to poor investor response.

PLASTENE INDIA IPO BOMBS

After Samvardhana Motherson IPO another issue has been bombed.  Plastene India received less than 30% subscription till the last day and hence BRLM has withdrawn the IPO.

IPO SUBSCRIPTION STATUS : PLASTENE INDIA

The IPO has received less than 30% subscription till the penultimate day. The response from retail investors is very disappointing. QIBs too have not shown interest. The IPO in the price band of Rs 81- 84, closes tomorrow.

STOCK WATCH: JUBILANT FOOD WORKS – IRRATIONAL VALUATION --SELL

CMP / FV	1150 / 10
NET PROFIT (2012)	106CR
NPM (%)	10.38
52 WEEK HIGH / LOW	1253 / 633
MARKET CAP	7485CR
EQUITY	65.08CR
EPS (FY12)	16
REVENUE	1018CR
INDUSTRY	RESTAURANTS

IPO ANALYSIS: SPECIALITY RESTAURANTS LIMITED – EXPENSIVE RESTAURANT. AVOID SUBSCRIPTION.

ISSUE OPEN / CLOSES ON	16-05-12 / 18-05-12
ISSUE SIZE	1,17,39,415 SHARES OF RS 10 FV
PRICE BAND	RS 146-155
IPO GRADE	4 BY CRISIL
PROMOTERS	ANJAN CHATTERJEE AND SUCHHANDA CHATTERJJE
BRLM	KOTAK MAHINDRA CAPITAL COMPANY
REGISTRAR	LINK INTIME

The IPO is being lead managed by one of the worst BRLM in the country. It appears Kotak has not learnt any thing from their past mistakes.  This IPO is priced around 25 PE and 4 times its book value. This is against the average cost of acquisition of shares by promoters is just 18 paise per share.

Speciality Restaurants is a leading fine-dining restaurant operator. Apart from its flagship Mainland China, the company has a chain of 68 restaurants under various brands like Oh! Calcutta, Machaan, Sigree, Flame & Grill and Haka.  Of  the  69  restaurants,  20  are  under  the  franchise  owned  and company operated model and the rest is owned and operated by the company. 

The company is co founded and promoted by Mr. Anjan Chatterjee, Managing Director, who has over 30 years of experience in the advertising and hospitality industry including his stint as a management trainee at Indian Hotels Company Limited.

OBJECTS OF THE IPO:

The funds are intended to be utilized for establishments of new corporate hospitals (Rs 145cr), developments of food plazas (Rs15cr), Repayment of term loan (Rs10cr) and the rest is for general corporate purposes.

FINANCIALS :( RS IN CRORES)

	31-03-10	31-03-11	31-12-11
TOTAL INCOME	129.75	175.06	152.11
PAT	9.65	16.02	15.01
EPS	3.18	4.44	6.00#
SHARE CAPITAL	1.70	34.93	35.21
NET WORTH	70.67	97.29	112.64

# ANNULISED.

NAV AS ON 31-12-11 IS RS 38.14.

MATTERS OF CONCERNS

1. The business is labor-intensive. The company depends on dedicated and capable employees.

      2. The costs of compliance with health, safety and environmental laws are significant, and the failure to comply with existing and new health, safety and environmental laws could adversely affect the fortunes of the company.

3. The average cost of acquisition of Equity Shares by its Promoters is just 18 per Equity Share. 

      4. The premises for all of the restaurants and confectioneries are taken on lease and inability to continue the lease rights and keep up with increasing lease rentals in certain key locations.

      5. Food-borne illnesses and resulting negative guest perceptions could adversely affect the business.

      6. Strong competition in the business. The fine dining sector of the restaurant industry in India is subject to competition in respect of price, service, location and food quality.

     7. The Indian food services industry has a history of being fragmented and unorganized and dominated by local players.

Business Strategy

The company intends to leverage on the flagship Mainland China brand while selectively expanding into existing and new markets using the brand equity.

 

VALUATION AND RECOMMENDATIONS

At Rs 146-155, the company is demanding a PE multiple of 20 on its expected earnings for FY13, on its post issue capital of Rs 46.95cr.

The BRLM is one of the worst performing lead managers in the country. Out of the 21 IPOs managed by Kotak in the last 2 years, only 3 are trading above the IPO price. Even an ‘at par’ issue managed is quoting below its issue price. This IPO too has been irrationally priced. It is ridiculous for promoters to ask the IPO investors to subscribe at Rs 146-154, when their cost of acquisition is just 18 paise and the company is not century old. The company was incorporated in 1999.