Saturday, March 20, 2010

FORTHCOMING IPOS


       



  1. Acropetal Technologies Limited  
  2. Genus Paper Products Limited   
     3.  Va Tech Wabag Limited

IPO NEWS - PERSISTENT SUBSCRIBED BY OVER 90 TIMES

The IPO of  Persistent Systems Limited, for which CRISIL  has awarded grade -4,  has been  subscribed by 93 times, as per NSE website.

FIRST CHOICE HAD STRONGLY RECOMMENDED FOR SUBSCRIPTION TO THE ISSUE.

Friday, March 19, 2010

IPO NEWS - INTRASOFT TECH TO OPEN ON 23-03-10. PRICE BAND RS 137-145

The IPO of electronic greeting company, IntraSoft Technologies, which owns 123 greetings.com, will open on 23-03-10. The company propose to raise around Rs53cr.The price band has been fixed at Rs 137-145.
AWAIT FOR DETAILED ANALYSIS.

Thursday, March 18, 2010

IPO OF GOENKA DIAMOND AND JEWELS OPENS ON 23-03-10

The initial public offer of 1,00,00,000 equity shares of face value of Rs10/- each,opens for public on 23-03-10.

AWAIT FOR IN-DEPTH ANALYSIS OF THE ISSUE.

Tuesday, March 16, 2010

IPO ANALYSIS: SHREE GANESH JEWELLERY HOUSE LIMITED - WILL SPARKLE - INVEST. PRICE BAND RS 260 - 270




The Kolkata based, manufacturer and exporter of hand crafted gold jewellery is entering the capital market with issue of 1,42, 69,831 equity shares of Rs 10/- each, including the offer for sale of 21, 33,334 equity shares. The issue opens on 19-03-10 and closes on 23-03-10.


Nilesh Parekh and associates are the promoters of the company.

A Four Star Export House, exports its products to U.A.E, Singapore and Hong Kong. The Company’s export income has grown at a CAGR of 72.71% from FY 2007 to FY 2009 and Company’s share in the India’s gold jewellery exports has increased from 1.83% to 6.10% during the same period. During the FY 2007, 2008 and 2009 the company exported 86.73%, 94.19% and 99.23% of its products, respectively.

The Company’s export performance has been recognized by the Gems and Jewellery Export Promotion Council (“GJEPC”) in 2007 – 2008 and in 2008 – 2009 and has been awarded the ‘Outstanding Export Performance and Contribution in the Trade for Plain Precious Metal Jewellery Exports by Unit from EoU/EPZ’ for both the years.

Shree Ganesh Jewellery intends to utilize the issue proceeds, apart from expanding the existing facilities, to set-up new manufacturing facilities and for meeting the working capital requirements.



FINANCIALS   (Rs in crores)
                   

07
08
09
TOTAL INCOME

827.24
1283.03
2218.20

NET PROFIT
48.53
89.66
132.45

EPS (Rs)
11.32
20.65
27.29
RONW (%)

51.39
33.45
33.31

The NAV per share as on 30-09-10 is Rs99.01


OUT LOOK FOR GOLD

Despite an 11% fall in demand for the metal in 2009, owing to weaker industrial and jewellery demand, the outlook for gold for 2010 appears good, according to World Gold Council. (WGC)
The Indian jewellery market currently is worth about Rs.700 bn as estimated by WGC. Out of this, the urban jewellery market is valued at Rs.280 bn and the rural & semi-rural market is valued at Rs.420 bn. Gold jewellery forms around 80% of the Indian jewellery market (approx. Rs.560 bn), with the balance comprising fabricated studded jewellery that includes diamond studded as well as gemstone-studded jewellery. While a predominant portion of gold jewellery manufactured in India is for domestic consumption, a sizeable portion of rough, uncut diamonds processed in India in the form of either polished diamonds or finished diamond jewellery is exported. The Indian gems and jewellery industry is competitive in the world market due to its low cost of production and availability of skilled labour.

RISKS

The company proposes to diversify into the manufacture of machine made jewellery, diamond studded jewellery at the proposed plants, and intend to expand the chain of retail outlets. The limited experience in setting up and operating a manufacturing facility and under taking retail operations at a larger scale poses risks.

VALUATION
At Rs 260-270 price band,the issue has been very attractively priced,considering the average EPS and RNOW for the last three years. Growth prospect is excellent. INVEST.

Monday, March 15, 2010

IPO GUIDELINES FOR INSURANCE COMPANIES SHORTLY



The IPO guidelines for insurance sector would be ready in a couple of weeks and SEBI will take a final call, according to IRDA chairman J Harinarayan.
He further said that the valuation norms for the company has been finalised and sent to the Institute of Actuaries.
IRDA, which has been working on the guidelines along with the market regulator Securities and Exchange Board of India (SEBI), is likely to come out with a draft for public comments before issuing the final norms.

NITESH ESTATES PLANS IPO

The Company is in the business of real estate development and is primarily engaged in the development of residential projects in Bengaluru. Nitesh is also developing a residential and an office project in Kochi. The company is in the process of diversifying into the development of shopping-malls and are expanding the geographic reach to Chennai and Goa. The residential projects include multi-unit apartment buildings targeted at high-income and middle-income customers. Nitesh is currently developing the first hospitality project, the first ‘Ritz-Carlton’ brand hotel, on Residency Road, in the central business district of Bengaluru.

The Company since its incorporation in 2004 has completed three residential projects totaling 0.55 million sq. ft. of Saleable Area. Nitesh undertakes most of the projects through the joint-development model as compared to acquiring a freehold or leasehold interest in the land, which reduces the upfront cost of land acquisition and the total project financing costs. This allows the company to deploy the more funds towards development of the projects.

CRISIL IPO grade 2/5reflects the company’s entry into the highly competitive mid-income housing segment, and development of retail, commercial and hospitality projects, in which the company has a limited track record. These plans also present significant funding and execution risk. In the past, the management’s strategies have not been very successful, with NEL registering very low margins. The company also defaulted on its debt and interest payments in 2008-09, which was subsequently restructured/repaid.

SHREE GANESH JEWELLERY PLANS IPO

The Kolkata based jewelery house, plans to enter the capital markets shortly. The rating agency CARE has awarded grade -3 for the IPO.

AWAIT FOR DETAILED ANALYSIS.

PUBLIC ISSUES – VALUATION THAT MATTERS, NOT MERCHANT BANKERS




The government, stung by the poor response to stake sale in NTPC, REC and NMDC has decided to review the performance of the investment bankers in the earlier issues managed by them, before it gives them the mandate. Under the new rules being considered, 70% Weight-age for quality aspects and 30% for transaction fees. Currently, the merchant bankers are selected purely based on bids. Again, the thinking of the government on the above matters is off the track. Although the credibility and reputation of the merchant bankers are required, you cannot sell an issue on that alone. Pricing and valuation are very important.

UBS Securities, CITI group global, Edelweiss Capital, Kotak Mahindra Capital, Morgan Stanely, managed NMDC FPO. These private merchant bankers are reputed and have good track record in issue management. However, the FPO of NMDC got poor response and had to be bailed out by government controlled financial institutions. As compared to that, in the same week NMDC FPO opened for public, SBI capital Markets Limited, a public sector out fit, managed the public issue of DQ international which was over subscribed by 86 times. There was nothing wrong with the timing of NMDC issue. Then what went wrong? Definitely, there was some thing wrong with the pricing.

NMDC FPO issue had all the plus points – operating margin is in excess of 75%, net profit margin of 51% and RNOW is around 40%. Zero Debt Company. Healthy dividend pay out record. The bonus component in the capital is 66.66%. However, the investor response to the issue was poor. In the FY 2010-11, government plans to mobilize Rs 40,000cr from disinvestment. The valuations of the issues have to be attractive to get good investor response. Government should think on this aspect instead of blaming the merchant bankers.

Other than preparing a quality offer document and giving sound investment advice, the strength and capability of all the merchant bankers, so far as attracting/inducing the investors for subscription for an issue, are the same. I don't think that there is any merchant banker in the country, who can sell an issue, only on his strength, irrespective of valuations and market conditions.

NMDC FIXES FPO PRICE AT RS 300

The follow on public offer of NMDC has been fixed at Rs 300,the lower of the price band. The issue which was closed on 13-03-10, was subscribed to the extent of 1.25 the stocks offered.

Sunday, March 14, 2010

DQ ENTERTAINMENT IPO -PRICE AT RS 80

D Q Entertainment which came out with an IPO recently, has fixed the issue price, which was subscribed nearly 86 times, at Rs 80 per share -- the upper end of its price band.

Saturday, March 13, 2010

IL&FS TRANSPORTATION NET WORKS LIMITED – IPO FULLY SUBSCRIBED. RETAIL RESPONSE LUKE-WARM

The surface transportation infrastructure company and is one of the largest private sector BOT road operators - IL&FS Transport Networks Limited’s public issue has been fully subscribed.

As against the total Issue size of 23719009 equity shares, the company received total bids for 44171925 equity shares.

However, the retail response was tepid. Retail individual investors were offered 88, 77, 686 shares and total bids received in this segment was for 11, 77,025 shares.


The above information is based on the data obtained from NSE web site, as on 12-03-10.

Friday, March 12, 2010

FPO - NMDC - SUBSCRIBED 1.24 TIMES

The follow on public offer of NMDC has received offers for 1.24 times the size of the issue. Most of the bids were at the cut-off price of Rs 300/-. The shares of NMDC was closed at Rs 360/- in the NSE.

IPO ANALYSIS – PERSISTENT SYSTEMS LIMITED –GROWTH OPPORTUNITIES -INVEST.





The Pune based software product development company is entering the capital market. The net issue would consist of fresh issue of 41, 39,000 equity shares and offer for sale of 12, 80,706 equity shares of Rs 10 face value, in the price band of Rs 290-310. The company plans to raise around Rs 160cr. The issue opens on 17-03-10 and closes on 19-03-10. Enam Securities private limited and J P Morgan India Private Limited are the BRLMs.

First-generation entrepreneurs, Dr Anand Deshpande and Mr S P Deshpande, are the promoters of Persistent Systems Limited. The company provides outsourced software product development (OPD) services to its customers, majority of whom are
independent software vendors (ISVs). The company provides services across the value chain of product development – product conceptualization, design, development, testing and support. As of March 31, 2009, the company had 297customers, of which the top 10 customers accounted for around 37 per cent of its revenues.

The company has been recognized as one of the leading technology companies in the Deloitte Touche Tohmatsu Technology Fast 500 Asia Pacific 2009.


THE OPD ADVANTAGE

Persistent is an OPD specialty company, offering customers the benefits of offshore delivery. The company designs, develop and maintain software systems and solutions, create new applications and enhance the functionality of customers‘ existing software products. Over the past five years, the company has contributed to more than 3,000 product releases for customers. Persistent focus on OPD has helped to achieve scale in the target segments, offer a comprehensive range of services, build an understanding of the needs of the industries in which the customers operate and the underlying technologies that drive those industries. The company offers customers OPD services that allow them to reduce time-to-market, improve the quality of their products, reduce risk of failure during the engineering development process, improve predictability and reliability of the engineering process.


NEW BUSINESS INITIATIVE

Persistent to capitalize emerging technology trends in the industry, has taken focused initiatives in cloud computing/SaaS, analytics, enterprise mobility and enterprise collaboration. These new models of products, services and storage delivery will meet enterprises’ requirements, as they are constantly on the lookout for solutions to increase capacity or add on capabilities with limited investment. Consequently, product companies will have to spend to upgrade their systems to match new business models, enable inter-compatibility and rake in cost efficiencies, thereby having a positive impact on OPD players. Moreover, Persistent Systems is proactively channeling efforts towards R&D to identify new trends to offer value proposition to its clients.


OBJECTS OF THE ISSUE

• For establishing development facilities
• Capital infusion to subsidiaries
• General corporate purposes.



FINANCIALS

The company achieved a turn over of Rs 600.68cr,450.46cr and Rs 317.71cr for the years 09,08 and 07 respectively. The net profit earned was Rs66.76cr,83.38cr and Rs57.24cr respectively. The company had EPS of Rs 18, 23 and Rs 67 for the same period. The average operating margin for the above periods was in excess of 26%.


VALUATION AND RECOMMENDATIONS


Persistent Systems commands a strong position in the OPD space by virtue of its ability to offer solutions across each stage of product development. The company has significant domain expertise in telecommunications, life sciences and healthcare and in infrastructure. Good business model. Strong corporate governance - with two of the independent directors on board since 2001. Good operating margins. Strong team of highly skilled professionals and management. CRISIL has awarded grade -4 indicating above average fundamentals. At the upper band of Rs 310, Persistent would be trading at P/E 16 on earnings of FY 09. The issue is very attractively priced. INVEST.

IPO NEWS -NMDC FPO subscribed 79%

The follow-on public offer (FPO) of state-run iron ore miner NMDC was subscribed 79% at the end of the second day of the issue, on 11 March 2010. The issue closes on Friday, 12 March 2010.

The government is divesting 8.38% stake in NMDC through the FPO as a part of its divestment drive to raise funds in a bid to bring fiscal deficit down. The price band has been fixed between Rs 300 and 350 a piece.

Thursday, March 11, 2010

MAN INFRA LISTS AT 45% PREMIUM

Man Infra, which came out with an IPO recently, listed at a premium of over 45%. Currently it is trading around Rs 366/-in the exchanges(at 9.10 a.m.),against issue price of Rs 252/.

FIRST CHOICE HAD RECOMMENDED TO INVEST IN THE ISSUE.

Wednesday, March 10, 2010

NMDC FPO -DECENT RESPONSE ON FIRST DAY



The NAVRATNA’S follow on public offer received decent recent response on the first day, with bids for 17 percent of the shares on offer. Considering the size of the issue this response is very good. However, the offer received bids mostly at the lower end of its price band of Rs300.

NMDC shares ended at 379.85 rupees, up 1.1 percent in the exchanges.

DQ Entertainment IPO subscribed over 80 times

Animation and gaming company - DQ Entertainment (International) Ltd's initial public offer to raise up to 1.28 billion rupees was subscribed over 80 times.

DQ Entertainment had offered 15.73 million shares to the public at a price band of 75-80 rupees each.

The institutional portion was over-subscribed 100 times and the retail portion was over-subscribed 15 times.

FIRST CHOICE HAD RECOMMENDED TO INVEST IN THE ISSUE.

IPO PRICING SHOULD BE INVESTOR FRIENDLY




After obtaining the necessary clearance from SEBI in a hurry, some of the real estate companies – Lodha Developers, Ambience, Emaar MGF and Nitesh Estates Limited are yet to decide their issue opening dates. This is, in spite of Sensex hovering around 17,000 mark. Out of the twenty odd companies that hit the market in the last six months, half of them are quoting below the offer price. In view of this the responses to the recent IPOs from the retail segment was lukewarm. The issues are so aggressively priced leaving nothing for the investors. There are lessons to be learnt by the Merchant bankers and issuers from the poor responses from retail investors, before it is too late.

Tuesday, March 9, 2010

ICRA AWARDS GRADE -1 FOR SEA TV IPO





Sea TV Network Ltd.(STNL), an Agra (U.P) based company engaged in providing services of Multi System Operator (MSO) to various Local Cable TV operators of Agra city. The promoters of STNL are in this line of activity for last 16 years.


STNL is proposing to come out with an Initial Public Offer of equity shares of face value of Rs. 10/- each aggregating to Rs. 50.20cr.

The IPO Grade 1 assigned by ICRA reflects risks arising out of STNL’s small scale of operations, significant expansion plans in relation to its existing operations, geographic concentration risk arising out of presence in only one city - Agra.

NMDC PRICE BAND RS 300-350

The Empowered Group of Ministers has fixed the price band for the FPO of NMDC at Rs 300-350 a share. Currently the share is quoting at Rs 400 in the exchanges. Retail investors will get a 5% discount on the determined price. Very attractive priced. INVEST. MOVE ON TO BLOG ARCHIVE FOR DETAILED ANALYSIS OF THE ISSUE.

Monday, March 8, 2010

IPOS FOR THE WEEK

NAME OF THE COMPANY -- OPENS ON

1.DQ entertainment 08-03-10 --INVEST
2.NMDC(FPO) 10-03-10 --INVEST
3.ILFS Transport 11-03-10 --AVOID
4.Pradip Overseas 11-03-10 --AVOID

FOR IN-DEPTH ANALYSIS OF THE ABOVE ISSUES MOVE ON TO BLOG ARCHIVE.

IPO ANALYSIS: IL&FS TRANSPORTATION NET WORKS LIMITED: UNREASONABLE PREMIUM - AVOID



The surface transportation infrastructure company and is one of the largest private sector BOT road operators IL&FS Transport Networks Limited is planning to raise Rs 700cr by issue of equity shares of Rs 10 face value,in the price band of Rs 242-258. The issue also consists of offer for sale of 42,78,844-equity shares by Trinity Capital Limited. The issue opens on 11-03-10 and closes on 15-03-10. Enam Securities, Nomura Financial Advisory, HSBC Invest Direct and JM Financial Consultants Private Limited are the BRLMs.

BUSINESS

IL&FS is an established surface transportation Infrastructure Company and are one of the largest private sector BOT road operators in India. The company is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualization through commissioning to operations and maintenance. The company was incorporated in 2000 as an infrastructure development and finance company. In March 2008, the company acquired Elsamex S.A., a provider of maintenance services primarily for highways and roads in Spain and other countries.

IL&FS has a pan-India presence in the BOT road sector and have interests in a diverse project portfolio consisting of 16 road projects, comprising approximately 8,875 Lane kms, which includes 3,601 Lane kms under operation and maintenance and 5,274 Lane kms under development. IL&FS’s six projects that are in operation are:

- North Karnataka Expressway (from Belgaum in the States of Karnataka to Maharashtra Border),
- West Gujarat Expressway (connecting Jetpur to Rajkot in the State of Gujarat),
- NOIDA Toll Bridge (connecting Delhi to NOIDA, in the States of Delhi and Uttar Pradesh),
- Vadodara Halol Toll Road (connecting Vadodara to Halol in the State of Gujarat),
- Ahmedabad Mehsana Toll Road
- Mega Highways Road Project (Rajasthan).


FINANCIALS

The company’s total revenue for the years 2008 and 09 was Rs 437cr and Rs 1332cr. Net profit earned was Rs 93cr and Rs 28cr respectively. The EPS was Rs 5.62 and Rs 1.52 for the same period. The NAV as on 31-03-09 was Rs 56.38.
In Fiscal 2007 and Fiscal 2008, the company acquired interests in several projects, hence, figures are not comparable for the year 2009.

RISKS FACTORS


- Promoters - IL&FS, has been involved in SEBI proceedings in the past and has been subjected to certain penalties by SEBI.

- IL&FS’s business is significantly dependent on policies of the Government of India.

- Funds are raised, mainly for pre payment/repayment of laons (Rs 500cr).

- The growth of the business mainly depends on winning new contracts.

- Company operates in an industry that is capital intensive in nature, which requires capital infusion periodically to sustain growth.

- Operates in a regulated environment, the toll road operations are regulated by the NHAI.

RECOMMENDATIONS

The issue,in the price band of Rs 242-258, is very aggressively priced. Refrain from subscription.

Sunday, March 7, 2010

COAL INDIA IPO - EMPLOYEES OF SUBSIDIARY COMPANIES INCLUDED





SEBI has approved Coal India's proposal to offer one per cent share to its own as well as to those employed in its subsidiary companies through an IPO. This will benefit nearly four lakh employees of the subsidiaries wholly owned by CIL.

IPO - INSTITUTIONAL INVESTORS ON PAR WITH RETAIL INVESTORS

SEBI has brought institutional investors at par with retail investors for public issues. Institutions will now have to pay 100 per cent margin at the time of application for all initial public offers, follow-on offers and rights issues. The market regulator has also given an in-principle approval for physical settlement in the equity derivatives segment.

In the primary issuance process, qualified institutional buyers (QIBs) currently pay only 10 per cent margin while applying will be required to pay 100 per cent money in line with what other investors.Currently, while QIBs have to pay only 10 per cent margin with their applications, retail investors and high net worth individuals pay 100 per cent money upfront.

Saturday, March 6, 2010

IPO ANALYSIS: PRADIP OVER SEAS LIMITED - FADING MARGINS - AVOID





The Ahmedabad based textile manufacturer, with niche focus on Home Linen Products is planning to raise around Rs 100cr through initial public offer. The net issue to the public will be 1, 01, 00,000 equity shares of Rs 10 face value,in the price band of Rs100-110. The issue opens on 11-03-10 and closes 15-03-10. Anand Rathi Advisors limited are the BRLM.

PROMOTERS: Pradip Kumar Karia and associates.Promoters holding, post issue will be 68.68% of the diluted equity.


BUSINESS

Pradip Over Seas Limited (POL) since its inception in 2005, has established itself as a large processing house focused on the niche segment of home linen products-both Narrow Width (up to 65” width) and „Wider Width (up to 120” width). The company processes grey fabric and manufactures home textile made ups like beds-sheets, curtains, comforters, quilts (poly/cotton filled), duvet covers, pillow covers and mattress covers to be sold in domestic as well as international markets. As of 31 December 2009, the company has a total installed capacity of 136.5 million meters per annum (MMPA). Besides being a leading domestic player, POL products are exported to twenty countries. In 2008-09, exports accounted for 47.5% of the turn over. However, direct export was less than 5% of the total revenues.

OBJECTS OF THE ISSUE

POL intends utilize the issue proceeds to part finance the setting up the Proposed Manufacturing Facility in the Textile SEZ and to part finance the incremental margin money requirement for working capital. The cost of the project is estimated at Rs 200cr, including Rs 100 cr towards incremental working capital.

FINANCIALS

POL’s operating income at Rs. 1174 cr in 2008-09 marked a growth of 77% over the previous year, aided by capacity enhancement and higher capacity utilization, including a trading income of Rs. 225cr. POL’s operating profitability declined by 300 basis points to 10.0% in 2008-09 on account of significant trading income and also the pushing of sales through discounts because of demand decline especially in the US and Europe. The net profits at Rs. 44.37cr in 2008-09 marked a growth of 14% over the previous year.

MATTERS OF CONCERN

The company is setting up a textile Special Economic Zone (SEZ) near Ahmedabad which could bring in some strategic benefits especially in the exports segment. The lower value addition and business risks arising out of company’s limited product diversification, absence of long term contracts with customers, exposure of the textile industry to risks related to changes in government regulations and exposure to raw material price and supply fluctuations besides the high competitive intensity in the industry resulting from high level of fragmentation and competition from neighboring countries like Pakistan, China and Bangladesh. POL has not tied up for the funds for the implementation of proposed textile SEZ. The company is yet to fulfill the export obligations under an advance license.

RECOMMENDATIONS - AVOID

The stocks of this sector is not fancied by the investors. Industry leaders - Alok Industries and Welspun India shares are quoting below 6 PE level. Investors may refrain from subscribing to the issue.

ENGINEERS INDIA LIMITED -FPO IN SECOND QUARTER

The technical service provider for petroleum refineries and other industrial projects - EIL is likely to hit the market with its follow on offer in second quarter of next fiscal.The government intends to sell around 10% of its stake.

PRADIP OVERSEAS IPO OPENS 11-03-10





Ahmedabad based Pradip Overseas Limited, one of the few textile manufacturers with niche focus on Home Linen Products, plans an initial public offer 1,01,00,000 equity shares of Rs 10 each. Among others, the company intends to utilize the proceeds of the issue for setting of manufacturing facilities at proposed SEZ. AWAIT FOR IN DEPTH ANALYSIS.

IPO NEWS - EMAAR MGF





The New Delhi based realty major has received SEBI approval for its IPO. Emaar MGF is developing 29 projects, including the Commonwealth Games Village.
Emaar MGF will utilise over half of the fund to repay its debt. The company has a debt of Rs 5,807.79 crore as on August 31 and plans to utilise Rs 1,972.1 crore raised from IPO in part repayment.
The repayment will also include the debt of special purpose vehicle - created for developing the Commonwealth Games Villages -- Emaar MGF Construction.
Besides, it would pump in Rs 820 crore for redemption of redeemable preference shares. It would also invest Rs 276.8 crore in paying development and licence renewal charges.
Emaar MGF had made an aborted attempt in 2008 to raise around Rs7000cr through IPO.

Friday, March 5, 2010

HT MEDIA VENTURES PLANS IPO




Hindustan Media Ventures has filed the draft red herring prospectus with SEBI with respect to its proposed IPO. The company plans to raise around Rs 300cr.
Hindustan Media Ventures Ltd is the subsidiary of HT Media Limited.
HT Media Ltd is the publisher of English daily The Hindustan Times and Mint.

Hindustan Media Ventures is the publisher of Hindi daily newspaper Hindustan.

IPO NEWS- BAJAJ CORP PLANS LISTING




Bajaj Corp Ltd - one of India’s leading producers of hair oils, part of the Shishir Bajaj Group of companies, is planning to issue 45,00,000 equity shares of Rs 5/- each.

The price band and the minimum bid amount shall be announced two days before the bid opening date. Kotak Mahindra Capital Company Limited is the Book Running Lead Manager.
Await for in depth analysis.

IPO NEWS: REALTORS MAY MISS THE BUS



Many real estate companies, who have obtained SEBI approval for IPO, are waiting for favorable market conditions to launch their issues. Out of the recent 15 IPOs, shares of nine companies, are quoting below the offer price in the exchanges. The aggressive pricing of issues by merchant bankers is the main reason for luke-warm response from the retail investors and consequent negative listing. If the pricing is right, any time is right for the issues. The IPO pricing has to be investor friendly. Otherwise, it will be the story of killing the goose, which was laying golden eggs. Merchant Bankers have not learnt any lessons from Emmar-MGF-fiasco, in 2008.

Thursday, March 4, 2010

GLENMARK GENERICS LTD – IPO GETS 4/5 GRADE FROM CRISIL



The IPO grade reflects the company’s status as a fast growing Indian generics company. According to estimates by CRISIL Research, drugs worth an estimated USD 137 billion is scheduled to go off-patent in the US and Europe over the next 5 years, which implies significant generics opportunity for India. GGL, given its dominant position among Indian players in the global generics market, is well placed to capitalise on the emerging opportunities in generics and to consolidate its presence in the regulated markets of US and Europe. The grading takes into account the company's strong product pipeline and strategy of focusing on niche and complex molecules in the US market. The grading also takes into account the relevant experience and domain expertise of the promoter and the top management and their demonstrated capabilities in driving business growth.

IPO NEWS - CRISIL AWARDS GRADE -2 TO NITESH



The Bengaluru based real estate company, which is planning to raise around Rs 450cr through initial public offer,has been awarded grade -2 by CRISIL.

CRISIL IPO grade 2/5 reflects the company’s entry into the highly competitive mid-income housing segment, and development of retail, commercial and hospitality projects, in which the company has a limited track record. These plans also present significant funding and execution risk. In the past, the management’s strategies have not been very successful, with NEL registering very low margins. The company also defaulted on its debt and interest payments in 2008-09, which was subsequently restructured/repaid.

IPO NEWS -1.UCO BANK FPO 2. BSNL INFRA IPO 3. STANCHART IPO

The Kolkata head quartered public sector bank has received the necessary approval from the government and the share holders for further issue of capital. The bank may come out with a FPO in May this year. Final decision will be taken by the board in its meeting scheduled to be held on 19-03-10. Currently, the share is quoting around Rs 60/- in the exchanges.

Sam Pitroda, advisor to the prime minister, among others, has suggested to form a new unit/subsidiary for tower infra business of BSNL and un lock the value by IPO.

The London based British bank indicated it would list in Indian exchanges.

SENSEX AT 17,000 - RUSH HOURS FOR IPOS








The Sensex touched 17,000 mark on continued buying from Foreign Institutional Investors. Many companies who have deferred their IPOs due to unfavorable market conditions have started re working their plans,to take advantage of the buoyancy in the secondary market.

INDIGO MULLS IPO




The low cost airline IndiGo may come out with an IPO. However the total funds required to be raised and the timing of the IPO is not yet finalised, according to DNA Money.

Wednesday, March 3, 2010

IPO NEWS – PERSISTENT SYSTEMS LIMITED

The Pune based software product development company plans to come out with an IPO in few weeks. The net issue would consist of fresh issue of 4.14 million shares and offer for sale of 1.28 million shares. The proceeds of the issue will be utilized for expanding the development facilities at Pune and Nagpur.

CRISIL has assigned IPO Grade '4/5' to the initial public offer of Persistent Systems Ltd, which indicates that the fundamentals of the issue are above average, in relation to other listed equities in India.

The grading reflects the company’s presence across the value chain of product development--product conceptualization, design, development, testing and support--its diversified client base, growing cash accruals coupled with the management’s proven execution capabilities. Apart from catering to leading independent software vendors (ISVs), Persistent offers end-to-end solutions to smaller software product companies.

IPO ANALYSIS: DQ ENTERTAINMENT (International) LIMITED - HIGH GROWTH SECTOR- REASONABLY PRICED. INVEST






The Hyderabad based animation company plans to issue 1,57, 27,000 equity shares of Rs 10 each, in the price band of Rs 75-80. The issue opens on 08-03-10 and closes on 10-03-10. SBI Capital Markets Limited are the BRLM. The net issue constitutes 19.84% of the total paid up capital of the company. The promoters, post issue, will hold 75% of the paid up capital.

The company will announce the price band and the minimum bid lot at least two working days prior to the issue opening date.


COMPANY BACK GROUND AND BUSINESS

Tapaas Chakravarti, the current CEO, had earlier promoted DQ Entertainment Limited, which was engaged in the development of animation production services. DQ Entertainment Limited was amalgamated with DQE (International) with effect from May 1, 2007, pursuant to which DQ Entertainment Limited’s business was transferred to this company. DQE (International) is a wholly owned subsidiary of DQ Mauritius, which inturn is wholly owned by DQ Entertainment plc - an Isle of Man entity. DQ Entertainment Plc is listed in the AIM in London.


DQEL is one of the leading producers of animation, visual effects, game art and entertainment content for the Indian and as well as for the global media and entertainment industry. The company has forayed into production and distribution of live action television and feature films. DQEL has an asset base of over 350 hours of animation content from which they earn revenue through licensing and distribution activities. These includes, among others, Little Nick, The Jungle Book, Fan Boy and Chum Chum.

According to NASSCOM report, the global animation industry is one of the fast growing components of the global media and entertainment industry. The global animation market was estimated at USD 68 billion in 2008 and is expected to grow at a CAGR of 10 per cent to reach USD 100 billion by 2012.

Increased outsourcing from overseas countries due to India’s inherent cost advantage, emphasis on IP (intellectual property) creation, and attractive domestic opportunities have been the principal growth drivers.



OBJECTS OF THE ISSUE

I. Investment in co-production agreements, focusing on IP content creation;

II. Development of office premises and production facilities; development of infrastructure and additional facilities at SEZ.

III.Investment in subsidiary - DQ Entertainment (Ireland) Limited; and

IV.General corporate purposes.



GROWTH AND PROFITABILITY

The company has shown a high growth rate in revenues over FY08 -FY09. Most of the revenues (91%) of the company in FY09 were from television production. Licensing and distribution activities contributed a meager 5% of revenues, whilst full motion video and game development contributed 4%.


The company achieved a turn over of 150.90cr and net profit of Rs 16.04cr for the year 09. On the total income of Rs, 73.75cr, for the first six months in the current fiscal, the net profit earned is Rs 10.16cr.





RISK FACTORS AND CHALLENGES


The company has limited experience in Intellectual Property (IP) content creation and as a result may not be able to achieve the high level of growth, as anticipated.

Significant portions of the production revenues (over 40%) are dependent on clients from select geographical regions – US and European countries. Moreover, any adverse economic impact in such geographical regions could adversely affect the company’s business.

DQE plc, the Promoter Group Company is admitted to trading on Alternate Investment Market (AIM) of the London exchange and is currently trading at a price below the issue price of its equity shares.

While amalgamating the company the accounting was not in strict compliance of Accounting Standards. (AS14).

Piracy of animated content, including piracy of motion pictures are extensive in many parts of the world and is made easier by technological advances, may decrease revenue.

The animation industry requires highly creative manpower and continuous access to skilled manpower and production facilities is yet another challenge.

The rating agency, FITCH, has awarded grade 3 for the IPO indicating average fundamentals.



RECOMMENDATIONS
The company has healthy order book of Rs 430cr to be executed in next2/3 years.
The company recently made a pre-IPO allotment of shares @ Rs 68.11. Taking this and the funds requirements into account, the issue is likely to be priced around Rs 75-80/-The Company operates in high growth sector. Reasonably priced. INVEST.







Tuesday, March 2, 2010

SUTLUJ IPO IN APRIL

The initial public offer of Satluj Jal Vidyut Nigam (SJVNL)is likely to hit the market in April this year. The government plans to raise around Rs 1200cr from the dis investment. The others in the pipe line, where the government is looking for divestment are SAIL, Hindustan Copper, Shipping Corporation, Manganese Ore and MMTC. The finance minister Pranab Mukherji indicated that the government intend to mop-up around Rs 40,000cr in this fiscal through disinvestment.