Monday, December 26, 2016

IPO grade vs stock market performance - Just Dial

The company came IPO in 2013 with much funfair and promise.  The IPO was awarded grade 5 by CRISIL. (Maximum permissible). It was lead managed by Citigroup Global Markets and Morgan Stanley India.  

Among others FirstChoiceIPO had written the following in May 2013:


Just Dial IPO has been awarded grade 5 by CRISIL. Normally this grade is awarded to companies which are professionally managed, have impeccable track record and who have high business integrity & ethics.  However a closer scrutiny of the RHP of Just Dial tells a different story.   Among others, we found the following deficiencies / un-professionalism in conduct of the business:

               1. Improper keeping of records.                   

2. There were delay in a few cases in the deposit of undisputed statutory dues; and no payments were made to the Employees’ State Insurance Corporation, for which the company had been served show cause notice by ESIC.

3. The company had received FEMA violation notices.

4. There are outstanding criminal proceedings against the Company,  Managing Director and certain Directors and employees.

5.  Promoters have interests in entities which are in the same line of business as that of the Company.
One does not understand how CRISIL has awarded grade 5 for the IPO in spite of the above deficiencies / unprofessional conduct of the business.

The stock is trading around Rs 370 against the IPO price of Rs 530.

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