Credit Rating Agency CARE has assigned CARE IPO Grade 4 to the proposed IPO of Cox and Kings (India) Ltd. CARE IPO Grade 4 indicates above average fundamentals. CARE assigns IPO gradings on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.
The company had filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Friday, August 21, 2009. The proposed IPO of Cox and Kings(India) will consist of 18,496,640 Equity Shares, each having a Face Value of Rs.10 each
Stay tuned for more updates on Cox and Kings IPO!
More posts on Cox and Kings (India) IPO:
> Cox and Kings IPO Price Band
> Cox and Kings (India) IPO Details
> Cox and Kings IPO to open for subscription from Wednesday, November 18, 2009
> Cox and Kings IPO may hit the markets soon
> All posts on Cox and Kings (India) IPO
Monday, November 9, 2009
Cox and Kings IPO Rating
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Fundamental Analysis of Cox & Kings Public Issue after reading Draft Pospectus thoroughly.
ReplyDelete2008-2009 Figures:
Consolidated PAT : 62.76 crore
Consolidated Net Value of Assets :227.94 crore
No of issued shares till Mar 2009 :2.79 crore
Consolidated EPS :22.18
Cosolidated Book Value per share : 81.62
Everything looks good till above information as we can see P/E seems to be about 14.2 to 14.9 at lower band(316) & upper band respectivly(330) for FY09
But important point is that company issued fresh equity of 1.95 crores on 23rd July 09 after 09 accounting period was over through Rights issue in ratio of 7:10 at Par value only (10 Rs). By Doing so 2.79 cores shareholders till march 2009 were awarded 1.95 crores fresh shares & that with issue price at Par value which is Rs 10.This process have following implications which is not mentioned in draft prospectus & I have derived myself.
Networth : 227.94 + 19.5 = 247.44 crore (Increased by 19.5 crore because of money recieved from rights issue)
EPS : 13.24
Book value per share :52.20
We can see EPS as well as Book value both have decreased substantially after rights issue.
P/E FY09 with new values will be 23.86 to 24.92
Offered Price is 6 * Bookvalue
Present Fresh issue of 1.54 crores share will dilute EPS further to Rs 10 which will bring P/E FY09 to 31.6 & 33 at lowerband & upperband respectively.
With Raising of 486.64 crore at lower band & 508.20 crore at upper band company can reduce their debt burden & invest in new subsidaries.With this I think company can increase their profit to 80 crore for FY10.EPS will be
around 12.73 ,With this assumption still P/E for FY10 comes out to be 24.80 - 25.90.
Conclusion : Will not recommend to invest with high P/E value,low book value,Competion with Thomas Cook & SOTC.
Would have been good offer if rights issue at par value(10 Rs) have not been offered & which would have changed things substantially.It can prove spoilsport for this issue.
Disclaimer : Not applying in issue with current price range but can invest in future if it goes below 220.