December 2012 - Indian IPO Blog

Indian IPO Blog

Insights into investing world in India

Friday, December 28, 2012

Bharti Infratel to list today

December 28, 2012 0
Bharti Infratel to list today
The shares of Bharti Infratel would go live for trades from today, December 28, 2012. The Issue Price under the IPO was fixed at Rs.220/- a piece whereas the shares offered under the IPO were under a price band of Rs.210/- to Rs.240/- a share

Bharti Infratel Limited is a provider of tower and related infrastructure. Bharti Infratel is one of the world's largest telecom tower infrastructure providers which deploys, owns and manages telecom towers and communication structures for all wireless operators. The business of Bharti Infratel and Indus is to acquire, build, own and operate tower and related infrastructure.

CRISIL had assigned a IPO Grade 4/5 to the IPO of Bharti Infratel. This grade indicates that the fundamentals of the Bharti Infratel IPO are 'above average' relative to the other listed equity securities in India. CRISIL assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals. However, the IPO had received a weak subscription of 1.30 times on an overall basis chiefly on support from QIB investors. Click here to view PC Jeweller IPO Final Subscription Status

While the share had a grey market discount and also the lack of interest in the issue pushes for a likely listing below issue price, it remains to be seen how much resistance the share throws up to maintain a respectable level closing on the listing day

Thursday, December 27, 2012

PC Jeweller IPO lists at 11 percent premium

December 27, 2012 0
PC Jeweller IPO lists at 11 percent premium
Jewellery Retailer PC Jeweller, which listed on the exchanges today, ended the listing day at a premium of close to 11% over the issue price. The shares under the IPO, which was open for subscription between December 10 to December 12, were offered in a price band of Rs.125/- to Rs.135/- per share with a discount of Rs.5/- to Retail Investors and Employees on the Issue Price

PC Jeweller Ltd is an established jewellery retailer in North India. The company's operations include the manufacture, retail and wholesale of jewellery. PCJ offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles

On the Bombay Stock Exchange, the share touched an Intra-day High of Rs.154.75 and an Intra-day low of Rs.135.5 before concluding the trade at Rs.149, up nearly 10.4 percent over the Issue Price of Rs.135/- a share. The Total Traded Quantity on BSE was 286.13 Lakh Equity Shares with a weighted average price of Rs.146.64 a share

Eco Friendly Food Processing Park IPO opens today

December 27, 2012 0
Eco Friendly Food Processing Park IPO opens today
Eco Friendly Food Processing Park Ltd (EFFPP), engaged in the operations of agriculture and wood plantation, is coming up with an IPO proposing to list shares on BSE SME.

The following are details of IPO:

Eco Friendly Food Processing Park Ltd (EFFPP) IPO Details:
Issue Size: 3,006,000 Equity Shares of Rs. 10 
Issue opens on: December 27, 2012
Issue closes on: December 31, 2012
Issue Type: Fixed Price Issue IPO
Face Value: Rs. 10 Per Equity Share
Issue Price: Rs. 25 Per Equity Share
Listing At: BSE SME

Wednesday, December 26, 2012

CARE closes listing day at 23 percent premium

December 26, 2012 0
CARE closes listing day at 23 percent premium
The Equity Shares of CARE Limited, the Indian credit rating agency listed on the exchanges today. These were offered under the IPO at a price of Rs.750/- per share. The share opened in hefty green and touched an Intra-day high of Rs.986.20 on BSE before concluding the listing day at Rs.923.95 (Premium of 23.2 percent over the issue price)

According to BSE website, a total of 48.25 lakh shares were traded on the exchange on the listing day with total traded value amounting to Rs.450.08 Crs. The Wd. Average Price for the day at the BSE was Rs.932.88. Although the share never touched the circuits, the upper circuit limit was set at price of Rs.1,138.80 and lower circuit at Rs.759.25

CARE IPO was open for subscription between Dec 07, 2012 - Dec 11, 2012 and had received overwhelming response from all categories of investors

Click here for CARE IPO Category-wise Final Subscription Status
Click here for CARE IPO - Basis of Allotment

CARE shares to list shares today on December 26

December 26, 2012 0
CARE shares to list shares today on December 26
Credit rating agency Credit Analysis and Research Limited (CARE) will list its equity shares on exchanges today on Wednesday, December 26, 2012. The company had fixed its issue price at Rs.750/- per share.

The IPO had received an overwhelming response with the response from QIB Investors being 45.8 times while non-institutional and retail investors' portion received subscription of 110.96 times and 6.18 times respectively. CARE is one of the leading rating agency in India apart from CRISIL and ICRA.

Stock market analysts are predicting a clear premium listing with opening bell easily above Rs.900/- for the share. While the grey market premium for the share is also up to those levels, it remains to be seen whether the listing would reach or exceed expectations

Tuesday, December 25, 2012

CARE IPO - Basis of Allotment

December 25, 2012 0
CARE IPO - Basis of Allotment

Saturday, December 15, 2012

Bharti Infratel Final Subscription Figures

December 15, 2012 0
Bharti Infratel Final Subscription Figures
Bharti Infratel Limited IPO was finally subscribed 1.30 times despite a rather subdued response from investors. The IPO had received bids for 20,84,92,050 Equity Shares as against 16,05,65,000 Equity Shares offered

The shares were offered in a price band of Rs.210/- to Rs.240/- per equity share with a discount of Rs.10/- per share for Retail Individual Investors and Eligible Employees on the Final Issue Price. Despite this incentive, the Retail Investors were aloof from the issue with the category getting subscribed a relatively tiny 19 percent. The following is the final subscription status of the IPO:


Thursday, December 13, 2012

Bharti Infratel IPO crawls to 1 time subscription on Day 3

December 13, 2012 0
Bharti Infratel IPO crawls to 1 time subscription on Day 3
The IPO of Bharti Infratel Limited has been receiving muted response from investors. The IPO, at the close of Day 3 of its opening, has managed to crawl to 1 time subscription solely due to rescuing support from QIB Category which is subscribed 2.84 times

The IPO has been subscribed 1.21 times on an overall basis at the close of Day 3, December 13, 2012, which is also the closing day for subscription for QIB Investors. The issue will close for subscription on December 14, 2012 for other category of investors. The response from HNI and Retail investors has been fragile with 0.10 times and 0.06 times subscription in each of these categories respectively

The shares under the IPO are offered in a Price Band of Rs.210/- to Rs.240/- a piece with a discount of Rs.10/- on the final issue price for Retail Investors. Despite this incentive, the retail investors have so far and are also expected to away from the IPO

PC Jeweller IPO Final Subscription Figures

December 13, 2012 0
PC Jeweller IPO Final Subscription Figures
PC Jeweller IPO has been subscribed 6.85 times on an overall basis. The IPO was open for subscription between December 10, 2012 and December 12, 2012

The category-wise subscription statistics are as under:


Wednesday, December 12, 2012

Bharti Infratel IPO subscribed 35 percent

December 12, 2012 0
Bharti Infratel IPO subscribed 35 percent
Bharti Infratel IPO, which opened for subscription from yesterday, December 11, 2012, has been subscribed 0.35 times or 35 per cent on an overall basis. The IPO has received bids for 5,59,07,100 Equity Shares according to data available on the NSE website.

The Total Bids Received at Cut-off Price are 18,95,250. The Issue consists of Public offer of 188,900,000 equity shares of Rs.10 each issued in a price band of Rs.210/- to Rs.240/- per equity share with entitlement of discount of Rs.10/- for Retail Investors

Barclays Securities (India) Private Limited, Deutsche Equities India Private Limited, Enam Securities Private Limited, HSBC Securities and Capital Markets (India)Private Limited,Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the Issue, while BNP Paribas,DBS Bank Ltd,HDFC Bank,ICICI Securities are the Co-Book Running Lead Managers to the Issue

CARE IPO Final Subscription Status

December 12, 2012 0
CARE IPO Final Subscription Status
CARE IPO has been subscribed 41 times on an overall basis. The IPO, which closed today, received overwhelming response on the closing day of the issue.

The IPO received bids for 1,55,62,400 Equity Shares in the Retail Category as against 25,19,895 Equity Shares reserved in the category, thus making the category subscribed 6.18 times. The category-wise final subscription status is as under:


Tuesday, December 11, 2012

CARE IPO subscription blasts its way to 40 times

December 11, 2012 0
CARE IPO subscription blasts its way to 40 times
The subscription figures for CARE IPO has rocketed on the closing day of the issue. The IPO has received bids for a staggering 41 times the size of its issue.

According to data available on the NSE website as on December 11, 2012 2100 hrs IST, the IPO has been subscribed 40.98 times, having received total bids for 25,08,00,220 Equity Shares. The total bids received at cut-off prices is 1,39,91,680 Equity Shares as per NSE website, thus translating into a Retail oversubscription of close to 6 times the shares available in the category.

More than the Retail subscription, it is the subscription in the QIB and HNI categories that has shot up on the closing day of the IPO, which may act as a significant positive for the retail investors. The subscription in the HNI category has already crossed 100 times

Credit Analysis & Research Ltd (CARE) is the second largest full-service credit rating company in India. CARE offers rating and grading services across a diverse range of instruments and industries including IPO grading, equity grading, and grading of various types of enterprises, including shipyards, maritime training institutes, construction companies and rating of real estate projects, among others. The final category-wise subscription status will be updated on Indian IPO Blog. With SEBI's new allotment mechanism in place, it would be interesting to see how the allotment would practically take place. Click here to read more on SEBI's New IPO Allotment mechanism

Bharti Infratel IPO gets 15 percent response on opening day

December 11, 2012 0
Bharti Infratel IPO gets 15 percent response on opening day
Bharti Infratel IPO, which opened for subscription today, has received scant response on the opening day. The IPO has received bids for 2,45,34,650 Equity Shares as against Issue Size of 16,05,65,000 Equity Shares, thus taking the coverage of subscription of IPO at 0.15 times

Total Bids Received at Cut-off Price as per data available on NSE website, are for 7,68,500 Equity Shares. The shares under this issue are offered under a Price Band of Rs.210/- to Rs.240/- per equity share. The IPO would remain open for subscription till December 14, 2012

Bharti Infratel Limited is a provider of tower and related infrastructure. Bharti Infratel is one of the world's largest telecom tower infrastructure providers which deploys, owns and manages telecom towers and communication structures for all wireless operators. The business of Bharti Infratel and Indus is to acquire, build, own and operate tower and related infrastructure. In India, Bharti Infratel has over 34,000+ towers, across 18 states, and 11 Telecom circles, and still growing. Bharti Infratel also has a 42% stake in Indus Towers which was created as a Joint Venture between Bharti Infratel, Vodafone and Aditya Birla Telecom to hive off the Towers business in 15 telecom circles

PC Jeweller IPO covered around 40% till Day 2

December 11, 2012 0
PC Jeweller IPO covered around 40% till Day 2
PC Jeweller IPO, which opened for subscription from yesterday, has been bid around 40% on an overall basis as per data available on NSE website till December 11, 2012 1900 hrs IST

The IPO has received bids for 1,70,46,990 Equity Shares on an overall basis with bids received for 55,82,790 at cut-off price. The issue consists of Public offer of 45,133,500 equity shares of Rs.10 each (including Anchor Portion of 67,16,250 equity shares). The shares are issued in a price band of Rs.125/- to Rs.135/- per equity share with retail investors and eligible employees being entitled to Rs.5/- discount on the issue price

PC Jeweller Ltd is an established jewellery retailer in North India. Company's operations include the manufacture, retail and wholesale of jewellery. PCJ offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles. The company provides 100% Hallmarked jewellery and Certified Diamond jewellery.

Monday, December 10, 2012

Bharti Infratel IPO - Analysis

December 10, 2012 0
Bharti Infratel IPO - Analysis
Bharti Infratel is entering the capital markets with an IPO of 18.89 crore equity shares of Rs.10 each, comprising of an offer for sale of 4.27 crore shares by 4 PE investors and balance shares consisting of fresh issue. The IPO would open for subscription from December 11, 2012 and would close for subscription for QIB investors on December 13, 2012 and for other investors on December 14, 2012.

The shares are offered in a price band of Rs.210/- to Rs.240/- per equity share. The Retail Investors and eligible employees would be entitled to a discount of Rs.10/- per share

Company Profile:

Bharti Infratel is one of the world's largest telecom tower infrastructure providers which deploys, owns and manages telecom towers and communication structures for all wireless operators. The business of Bharti Infratel and Indus is to acquire, build, own and operate tower and related infrastructure.

Bharti Infratel and Indus currently provide access to their towers primarily to wireless telecommunications service providers. Bharti Infratel's and Indus's three largest customers are Bharti Airtel (together with Bharti Hexacom), Vodafone India and Idea Cellular. They are the three leading wireless telecommunications service providers in India by wireless revenue. Bharti Infratel, having presence in all 22 telecom circle in India, enjoys 23% market share in terms of tenancies, as of March 2012. The promoter of the company is Bharti Airtel


IPO Rating:
CRISIL has assigned a CRISIL IPO Grade "4/5" (pronounced "four on five") to the proposed initial public offer (IPO) of Bharti Infratel Ltd (Bharti Infratel). This grade indicates that the fundamentals of the IPO are ‘above average’ relative to the other listed equity securities in India. CRISIL assigns IPO grading on a scale of IPO Grade 5 to IPO Grade 1, with IPO Grade 5 indicating strong fundamentals and IPO Grade 1 indicating poor fundamentals. According to the grading document from CRISIL, the assigned grade also reflects the strong and stable operating cash flows resulting from long-term contracts.

The company’s robust back-end processes, which ensure higher reliability of network uptime for its clients, support the grade. However, low return on capital employed (RoCE) is a concern. Since tower infrastructure is a business with high operating leverage, RoCE is expected to improve in line with an increase in the tenancy ratio albeit from a lower base. The grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument’s future market price or its suitability for a particular investor.


Key Strengths:
  • The company stands to gain from the increase in penetration of voice and data services, which is expected to drive the telecom companies' demand for base transceiver stations (BTS) and additional towers.
  • Bharti Infratel and Indus Towers will benefit from any expansion of the network by India’s leading telcos - Bharti Airtel, Vodafone and Idea Cellular Ltd - as they are the preferred players for passive infrastructure requirements of the three telcos. 
  • Large-scale operations, first-mover advantage and pool sharing arrangement among the top three telcos have resulted in better-than-industry tenancy ratio for Bharti Infratel. It is expected to improve further leading to high operating leverage and improvement in profitability

Risks and Concerns:
  • Tower infrastructure is a business with high operating leverage. Low asset turnover and minimal use of leverage in a capital intensive industry have resulted in low return on equity (RoE) for Bharti Infratel over the past three years, which can increase if the leverage is corrected
  • The overcapacity in the industry is expected to limit the demand for rollout of new towers. Further, regulatory changes and the resultant uncertainty pose a risk to telecom players as their network rollout plans could be hampered.

Concluding Remarks:

The company has sound operating model in place. At the upper band of Price Band of Rs. 210 to Rs. 240 per share, shares are being issued at a PE that is undoubtedly expensive. Such higher price may be justified considering the long term story of the company, but investors may want to exercise caution before jumping into the ship, particularly if they are seeking listing gains, which seem unlikely

CARE IPO subscribed 2.25 times till Day 2

December 10, 2012 0
CARE IPO subscribed 2.25 times till Day 2
CARE IPO has been subscribed 2.25 times on an overall basis till Monday, December 10, 2012 as per data available on the NSE website. The IPO has received bids 1,37,55,080 Equity Shares as against 6,119,746 Net Equity Shares offered. The IPO consists of Public offer of 7,199,700 equity shares of a Face Value of Rs. 10 each.(including Anchor Portion of 1,079,954 equity shares)

The shares are offered under a price band of Rs.700/- to Rs.750/- per equity share with a bid lot of 20 Equity Shares and in multiples thereof. Kotak Mahindra Capital Company Limited, DSP Merrill Lynch Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IDBI Capital Market Services Limited and SBI Capital Markets Limited are BRLMs to the Issue. The IPO closes on December 11, 2012

The following is the subscription status till Day 2, Monday, December 10, 2012 1700 hrs IST:

CREDIT ANALYSIS AND RESEARCH LIMITED
Sr.No. Category No.of shares offered/reserved No. of shares bid for No. of times of total meant for the category
1 Qualified Institutional Buyers (QIBs) 2519896 8824980 3.50
1(a) Foreign Institutional Investors (FIIs)
7245620
1(b) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)
1045860
1(c) Mutual Funds
533500
1(d) Others
0
2 Non Institutional Investors 1079955 414120 0.38
2(a) Corporates
0
2(b) Individuals (Other than RIIs)
0
2(c) Others
6740
3 Retail Individual Investors (RIIs) 2519895 4515980 1.79
3(a) Cut Off
0
3(b) Price Bids
0

Total 6119746 13755080 2.25

PC Jeweller IPO - Bidding Status on Day 1

December 10, 2012 0
PC Jeweller IPO - Bidding Status on Day 1

CARE IPO Fully Subscribed

December 10, 2012 0
CARE IPO Fully Subscribed
CARE IPO, which opened for subscription from Friday, December 7, 2012, has been fully subscribed on second day of its opening.

The IPO consists of Public offer of 7,199,700 equity shares of a face value of Rs. 10 each.(including Anchor Portion of 1,079,954 equity shares) offered in a Price Band of Rs.700/- to Rs.750/- per equity share. Credit Analysis & Research Ltd (CARE) is the second largest full-service credit rating company in India. CARE offers rating and grading services across a diverse range of instruments and industries including IPO grading, equity grading, and grading of various types of enterprises, including shipyards, maritime training institutes, construction companies and rating of real estate projects, etc.

According to data available on NSE website, the IPO is subscribed 1.11 times on an overall basis till 4 PM. Precise subscription figures at the end of Day 2 would be updated here.





Sunday, December 9, 2012

PC Jeweller IPO - Indian IPO Blog Analysis

December 09, 2012 0
PC Jeweller IPO - Indian IPO Blog Analysis
PC Jewellers (PCJ) is coming out with an initial public offering (IPO) of 4.51 crore equity shares with a Face Value of Rs.10 each (including employee reservation of 3.6 Lakh shares). The shares will be offered in a price band of Rs.125/- to Rs.135/- per equity share. The Issue will remain open between December 10, 2012 and December 12, 2012. Retail Investors and Employees of the company will be offered a discount of Rs.5/- per equity share


Company Profile and Promoters:

PC Jeweller Ltd is an established jewellery retailer in North India. Company's operations include the manufacture, retail and wholesale of jewellery. PCJ offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles. The company provides 100% Hallmarked jewellery and Certified Diamond jewellery. PC Jeweller have 30 showrooms under the "PC Jeweller" brand located across 23 cities in north and central India. Company is planning to expand their showroom network across India by adding 20 more in next two years, including in southern and western parts of India. They have manufacturing facilities at 5 locations. The company is promoted by Balram Garg and Padam Chand Gupta


IPO Rating:

CRISIL has assigned a CRISIL IPO Grade "3/5" (pronounced "three on five") to the proposed initial public offer (IPO) of PC Jeweller Ltd (PCJ). This grade indicates that the fundamentals of the IPO are ‘average’ relative to the other listed equity securities in India. CRISIL assigns IPO grading on a scale of IPO Grade 5 to IPO Grade 1, with IPO Grade 5 indicating strong fundamentals and IPO Grade 1 indicating poor fundamentals. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument’s future market price or its suitability for a particular investor

According to the grading report, the assigned grade reflects its seven-year-old presence and the ensuing strong reputation in an industry quintessentially benefited by the country’s obsession for gold. Strong brand recall, successful branch expansion (from one to 30 showrooms in the past seven years) and stellar increase in gold prices have added shine to PCJ’s top line, which has grown at a three-year CAGR of 69%.

However, competition in the jewellery retailing market - likely to intensify following planned expansions by regional/traditional players - poses a significant risk



Key Strengths:
  • Compared with other gold jewellery players, PCJ’s revenue mix leans towards higher-margin diamond jewellery
  • The organised players account for approximately 16-18% share (including the regional players) of the Indian jewellery industry. The low penetration presents a good growth opportunity for a player like PCJ on account of the rising disposable incomes, which are likely to fuel the growth of jewellery consumption in the country
  • The operating profit grew at a CAGR of 96.3% in the last 4-5 years from around Rs.20 crore in FY2008 to Rs.330 crore in FY2012. The operating profit margin of the company at approximately 11%, is respectable enough when compared with peers. The Net Profit Margin stands at around 7.7% which also is one of highest amongst peers

Risks:
  • The company generates a major portion of its domestic sales from its showrooms in Delhi 
  • PCJ’s plans to add 20 showrooms by FY14 across India should mitigate the risk of regional concentration but the opening of new stores in a competitive market is likely to put pressure on profitability due to higher marketing expenses and working capital requirement. 
  • Moreover, the compensation structure for key management personnel appears low, which can lead to attrition.
  • Uncertain macro environment may put pressure on sales. The jewellery segment is discretionary in nature and is a luxury item. The current uncertain macro economic environment may drag on the company’s performance for the near term.

Remarks:

The share offered at roughly 7-8 times PE multiple, which is neighter generous nor blown out of proportions. Though participating in the IPO may be apt, however, investors may not be willing to go full throttle on the IPO

Friday, December 7, 2012

CARE IPO Subscription Status on first day

December 07, 2012 0
CARE IPO Subscription Status on first day

CARE IPO, which opened for subscription from today, has received quiet response on opening day, with the IPO getting subscribed about 9% on an overall basis

The following is the subscription position of the IPO on Day 1:



Thursday, December 6, 2012

New IPO Allotment Process explained

December 06, 2012 0
New IPO Allotment Process explained
SEBI has come out with new allotment process for IPOs, which will incorporate a mechanism. Here's an attempt to understand the new mechanism of IPO allotment through an illustration:

For our exercise, let us assume the total number of specified securities (read equity shares) on offer to be 1 crore specified securities. Let's say these securities are on offer at Rs.600/- a share. Thus, specified securities on offer for Retail Individual Investors category would translate to 35,00,000 specified securities. Let's add that the issuer decides to fix the minimum application / bid size as 20 specified securities (falling within the range of Rs. 10,000 - Rs. 15,000). Application can therefore, be made for a minimum of 20 specified securities and in multiples thereof.

Let's further assume that the issue is over-subscribed 2.5 times whereas the Retail Individual Investors’ category is oversubscribed 4 times. Assume that a total of 100,000 Retail Individual Investors have applied in the issue, in varying number of bid lots i.e. between 1 – 16 bid lots, based on the maximum application size of upto Rs. 2,00,000 (i.e. Bid Lot 1 is for 20 shares, Bid Lot 2 for 40 shares, Bid Lot 3 for 60 shares and so on till Bid Lot 16 which will translate to 320 shares)

Out of the 100,000 Retail Individual Investors, let's say there are five retail individual investors A, B, C, D and E who have applied as follows:
  • A has applied for 320 specified securities
  • B has applied for 220 specified securities
  • C has applied for 120 specified securities
  • D has applied for 60 specified securities and 
  • E has applied for 20 specified securities
Now, as per allotment procedure, the allotment to retail individual investors shall not be less than the minimum bid lot, subject to availability of shares, and the remaining available shares, if any, shall be allotted on a proportionate basis

The actual entitlement for allotment, thus, shall be as follows:


Okay. Now, in the above example, we assumed an overall over-subscription of 2.5 times and retail over-subscription of 4 times. But what happens if subscription if higher? Let's find out:

This time around, let's keep total no. of specified securities on offer (at Rs. 600 per share) unchanged at 1 crore specified securities. Specified securities on offer for Retail Individual Investors’ category therefore would be again: 35 lakh specified securities. Issuer decides to fix the minimum application / bid size as 20 specified securities (falling within the range of Rs. 10,000 - Rs. 15,000). Application can be made for a minimum of 20 specified securities and in multiples thereof

Let's now assume the issue is over subscribed 7 times whereas the Retail Individual Investors’ category is over subscribed 9.37 times.

Assume that a total of 200,000 Retail Individual Investors have applied in the issue, in varying number of bid lots i.e. between 1 – 16 bid lots (i.e. 16th lot at Rs.192,000 since the maximum application size of upto Rs.2,00,000)

Again, as per allotment procedure, the allotment to retail individual investors shall not be less than the minimum bid lot, subject to availability of shares, and the remaining available shares, if any, shall be allotted on a proportionate basis

Now since the total number of shares on offer to retail individual investors is 35,00,000 and the minimum bid lot is 20 shares, the maximum no. of investors who can be allotted this minimum bid
lot will be 1,75,000.

In other words,
  • 1,75,000 Retail Investors will get the Minimum Bid Lot and  
  • Remaining 25,000 retail applicants will not get allotment

The allotment in this case will be as follows:



Wednesday, December 5, 2012

CARE IPO - Analysis and Insight

December 05, 2012 0
CARE IPO - Analysis and Insight
Credit Analysis & Research Ltd. (CARE), the second largest full-service credit rating company in India, is coming up with an Initial Public Offering (IPO) consisting of 7,199,700 Equity Shares of Rs.10/- each for cash in a price band of Rs.700/- to Rs.750/- per equity share. Applications can be made in a bid lot of 20 Equity Shares and in multiples thereof, translating into minimum application size of Rs.15,000/-. The Equity shares are proposed to be listed on both BSE and NSE

Company Profile and Promoter Background:

CARE offers rating and grading services across a diverse range of instruments and industries including IPO grading, equity grading, and grading of various types of enterprises, including shipyards, maritime training institutes, construction companies and rating of real estate projects, among others. They also provide general and customized industry research reports.

The Company as such, has no promoter, domestic banks and financial institutions being the chief stakeholders. IDBI Bank, Canara Bank, SBI are amongst CARE's current shareholders. Post IPO, IDBI Bank will continue to be the largest shareholder retaining 17.2% stake in the company


IPO Grading:

CARE itself is the top rating agency of IPOs in India, having graded the largest number of IPOs since the introduction of IPO grading in India. CARE Ratings has completed over 19069 rating assignments having aggregate value of about Rs. 44051 Billion (as of September 30, 2012), since its inception in April 1993. As such, none of the rating companies including CRISIL, ICRA, Fitch, Brickworks would be rating the Initial Public Offer of CARE, which goes on air from Friday, December 7, 2012. The IPO is exempted from credit rating


Strengths and Positives:
  • The company gets most of its revenue from the ratings business, which is clearly a high margin business. This coupled with debt free and cash rich status of the company, translates into a concrete strength for the company
  • The Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin for the half-year ended September is 69%, comparing very well to listed peers with ICRA at 32.9% and CRISIL at 31.7%. CARE's Return on Equity also was 30.7% in FY12, clearly better than ICRAs 16%, though lower than CRISIL's 42%
  • The Company has a low-cost back-office in Ahmedabad, which helps it restrict its employee costs to less than 25% of its sales, compared with nearly 50% as in the case of CRISIL and ICRA
  • If an estimated Rs.100 Crore of Net Profit for FY 2013, translating to EPS of about Rs.35. Thus, the shares under IPO are offered in a relatively attractive prospective PE of about 20-22 times

Significant Risks:
  • For the year ended March, 86.4% of its revenue came from ratings. Thus, the mainstream revenue come from concentrated pocket. If banks decide to rate their loans internally, which the RBI may allow them to do so in future, it may impact CARE Ratings significantly
  • The company is planning to emulate its listed peers by expanding and diversifying its business into research wings, which may take time to materialize

Overall Comments:
The strengths of the company clearly outweigh the risks involved. The quality of financials coupled with relatively attractive pricing offers a very strong reason to go for the IPO

Tuesday, December 4, 2012

Veto Switchgears IPO subscribed 70 percent till second day

December 04, 2012 0
Veto Switchgears IPO subscribed 70 percent till second day
The SME IPO of Veto Switchgears and Cables Ltd., which has gone on air from December 3, 2012, has received 70% subscription so far till Day 2 on an overall basis.

Veto Switchgears and Cables Ltd is an ISO 9001:2008 certified company, engaged in the manufacture and sale of wires & cables and electrical accessories in India. Veto Switchgears product portfolio ranges from industrial cables, stand cables to telephone & co-axial wires, from general switches to modular switches, from ceiling fans to rechargeable fans, compact fluorescent lamps and other electrical accessories.

The IPO has received a CRISIL SME fundamental grade of "SME 4/5" (SME Four on Five) to the proposed IPO of the Company. The grade indicates that the fundamentals of the Company are superior compared to other SMEs in India. The IPO would remain open for subscription till December 5, 2012

Bharti Infratel IPO Rating from CRISIL

December 04, 2012 0
Bharti Infratel IPO Rating from CRISIL
Credit Rating Agency CRISIL has rated the upcoming IPO of Bharti Infratel Limited with an IPO Grade 4/5 (Pronounced Grade Four out of Five)

This grade indicates that the fundamentals of the Bharti Infratel IPO are 'above average' relative to the other listed equity securities in India. CRISIL assigns IPO grading on a scale of IPO Grade 1 to IPO Grade 5, with IPO Grade 5 indicating strong fundamentals and IPO Grade 1 indicating poor fundamentals. This grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument's future market price or its suitability for a particular investor.

Bharti Infratel is one of the world's largest telecom tower infrastructure providers which deploys, owns and manages telecom towers and communication structures for all wireless operators. The business of Bharti Infratel and Indus is to acquire, build, own and operate tower and related infrastructure. The company is promoted by Bharti Airtel Limited

Monday, December 3, 2012

CARE IPO Exempted from IPO rating

December 03, 2012 0
CARE IPO Exempted from IPO rating
The IPO of Credit Analysis & Research Ltd (CARE), the second largest full-service credit rating company in India, will be exempted from obtaining credit rating for its IPO, being a credit rating agency itself.

CARE itself is the top rating agency of IPOs in India, having graded the largest number of IPOs since the introduction of IPO grading in India. CARE Ratings has completed over 19069 rating assignments having aggregate value of about Rs. 44051 Billion (as of September 30, 2012), since its inception in April 1993. As such, none of the rating companies including CRISIL, ICRA, Fitch, Brickworks would be rating the Initial Public Offer of CARE, which goes on air from Friday, December 7, 2012.

The shares under the IPO would be offered in a Price Band of Rs.700/- to Rs.750/- per share. The applications can be made in a bid lot of 20 Equity Shares and in multiples thereof. The IPO would remain open for subscription till Tuesday, December 11, 2012

Sunday, December 2, 2012

Bharti Infratel IPO - Retail Investors to get discount

December 02, 2012 1
Bharti Infratel IPO - Retail Investors to get discount
Retail Individual Investors would be entitled to a discount in the upcoming Initial Public Offer of Bharti Infratel from the Bharti Group. The price band for the IPO is fixed at Rs.210/- to Rs.240/- per equity share. The IPO would run between December 11, 2012 and December 14, 2012

Bharti Infratel Ltd. is expected raise as much as Rs.4,530 crore through the divestment of a 10% stake. According to Bloomberg, the largest IPO prior to this was of state-run Coal India Ltd, which raised some $3.5 billion in October 2010. Bharti Infratel is a provider of tower and related infrastructure. Bharti Infratel and Indus currently provide access to their towers primarily to wireless telecommunications service providers. Bharti Infratel's and Indus's three largest customers are Bharti Airtel (together with Bharti Hexacom), Vodafone India and Idea Cellular

The discount would be 5% on the final issue price subject to Rs.10 per equity share. In India, Bharti Infratel has over 34,000+ towers, across 18 states, and 11 Telecom circles

Saturday, December 1, 2012

Bharti Infratel IPO to be the biggest in two years

December 01, 2012 0
Bharti Infratel IPO to be the biggest in two years
Sunil Mittal promoted Bharti Group will come up with an Initial Public Offering (IPO) next week which is set to become the biggest IPO in last two years. Bharti Infratel Ltd. is expected raise as much as Rs.4,530 crore through the divestment of a 10% stake. According to Bloomberg, the largest IPO prior to this was of state-run Coal India Ltd, which raised some $3.5 billion in October 2010

Currently, Temasek Holdings Pte. Ltd, Goldman Sachs, Citigroup Inc., KKR and Co. are major holders in the company. The MD of the Company Akhil Gupta believes the IPO would hit the streets at the right time. “The timing is perfect for a number of reasons,” said he adding “We are not a start-up dotcom company. We have a perfect business model with predictable revenues and globally comparable size.”

Bharti Infratel IPO would entail offer of 189 million shares in a price band of Rs.210/- to Rs.240/- each. The IPO would be open between December 11, 2012 and December 14, 2012.  Credit Rating Agency CRISIL has assigned a rating of IPO Grade 4/5 [IPO Grade 4 out of 5] to the issue indicating that the fundamentals of the company are above average compared with other listed companies in India

Bharti Infratel IPO Price Band announced

December 01, 2012 0
Bharti Infratel IPO Price Band announced
The price band for the upcoming IPO of Bharti Infratel has been declared. The shares will be offered in a price band of Rs.210/- to Rs.240/- a piece. Bharti Infratel is one of the world's largest telecom tower infrastructure providers which deploys, owns and manages telecom towers and communication structures for all wireless operators

The promoter of the company is Bharti Airtel Limited. The Issue Size of the IPO would be Rs.3966 to Rs.4533 Crores for shares having a Face Value of Rs.10 each. The IPO would remain open for subscription between December 11, 2012 and December 14, 2012. Besides general corporate purposes, the following are the objects of the issue:
  • Installation of 4,813 new towers;
  • Upgradation and replacement on existing towers; and
  • Green initiatives at tower sites;

Neogen Chemicals IPO subscription status on Day 2

QIB: 0.95x HNI: 1.12x Retail: 3.14x Overall: 2.08 times