Powergrid - Follow-on-public offer
Tuesday, June 23, 2009
Power Grid Corporation of India is considering floating a follow-on-public offer (FPO) by the end of this financial year or in the start of next year to mop-up Rs 3,000 crore.
The state-run entity looks to infuse 15% fresh equity through the issue, as added by the company's CMD S K Chaturevedi.
The company has reported decent numbers for fiscal 2008-09, its net profit surged 16.72% during the fiscal to Rs 1,690.61 crore while the total income rose 38.32% to Rs 7,028.54 crore.
Recently, it bagged an order worth Rs 1,033 crore from Punjab State Electricity Board for turnkey execution of transmission lines and substations.
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Published by DalalStreet Business @ 11:50 AM IST.
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Mahindra Holidays Resorts - Review
Mahindra Holidays and Resorts Ltd is India's largest holiday timeshare company enjoying a market share of over 70% in the industry. The company currently has 27 resorts, with 1261 apartments / cottages and over 96,000 members. MRHL, with a highly respected promoter group, excellent execution of projects and a track record of delivering an apparently good holiday experience to members,is the strongest player in the timeshare industry in India.
Business Performance:
Membership enrollments have grown at a CAGR of 32% over the last three years. Its revenues and net profits have grown faster at a CAGR of 41.3% and 58.6%, respectively over this period. Timeshare is a very high entry barrier business model that requires relatively low equity capital and generates predictable annuity revenues.
The following table shows the Profit and Loss Account of the company over the past 4 years.
Current IPO Details:Fresh issue of shares : 5,896,084
Offer for sale of shares : 3,369,191
Retail portion: 2,779,583 shares
Price Band - Rs 275 to Rs 325
Some Concerns:
The company recognizes the non-refundable portion of the membership fees (about 60% of total) in the year of booking. The remaining (about 40%) is recognized evenly over 25 years (the membership period). Revenue recognition policy somewhat aggressive since it is unlikely that 60% of the costs of servicing a member are incurred in the first year. The number is more likely to be closer to 30%.
Recommendation:
At the lower and upper band of the issue price the stock would discount its FY2010E earnings by 23.9x and 28x respectively and its FY2011E earnings by 19.5x and 23x respectively. The issue is very aggressively priced leaving very little room for upside on the basis of fundamentals.
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Published by DalalStreet Business @ 10:31 AM IST.
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Mahindra Holidays Price Band Rs 275-325/sh
Friday, June 19, 2009
We have just received confirmation that Mahindra Holidays has fixed IPO price band for its forthcoming IPO at Rs 275-325 / share. The size of the issue will be Rs 301 crore at the upper end of the price band and Rs 255 crore at the lower end of the band.The IPO will open for subscription on June-23rd and will close on June-26th.
Mahindra Holidays & Resorts, the 25 year old entity started with an investment of Rs 20 crore, is growing at whopping 43% consolidated annual growth rate (CAGR) from the last four years and enjoys about 75% of the total pie of the domestic resorts market.
The company reported FY09 sales of Rs 400 crore and a Net Profit of Rs 80 crore. Fitch has assigned a rating of 4 on a scale of 5. Stay tuned for complete analysis of the same.
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Published by DalalStreet Business @ 11:18 AM IST.
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Coal India on disinvestment radar of the govt
Wednesday, June 17, 2009
Riding on its ambitious plan of disvestment of PSUs, the coal ministry is toying with a proposal to disinvest 5-10% stake in navratna PSU Coal India in order to pave the way for listing of the coal giant on the bourses. The coal ministry has informed the finance minister about the development. CIL shares would be allotted to people whose land is acquired for mining purposes and also to the employees of the company.
For the purpose of divestment, the coal ministry is required to introduce a bill to amend the Coal Mines Nationalisation Act in order to facilitate divesting of government's equity in the company for listing of the entity.
CIL was accorded navratna status in October 2008, as per which its has to be listed within the timeframe of three years elapsing in October 2011. The coal ministry has also demanded for a reduction in customs duty on heavy machines used for mining purposes. Coal India has ambitious plans of acquiring sophisticated mining equipment to improve output.
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Published by DalalStreet Business @ 12:17 PM IST.
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Full money upfront mandatory for QIPs in IPOs - SEBI
Monday, June 15, 2009
In a bid to make a level playing field in favour of retail investors, the Securities and Exchange Board of India (SEBI) has finally geared to make full payments upfront mandatory for qualified institutional investors (QIPs) when they apply for shares in initial public offers (IPOs). On the other hand, retail investors are required to pay the full amount with their applications. As of now, QIPs are required to pay only 10% of the amount required for the shares for which they apply upfront.
SEBI has focused on a better price discovery since retail investors are inclined to be influenced by QIP participation. The proposal was on the back seat for a year due to the crunch in the IPO market. As the markets have started recovering, SEBI has now decided to implement it.
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Published by DalalStreet Business @ 12:51 PM IST.
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EdServ IPO gets poor response
Monday, February 09, 2009
EdServ Softsystems, an e-learning company, which has tapped the capital market to raise up to Rs 24 crore through an initial public offer (IPO), has not been able to get the support of investors. The IPO has received mere 11,600 bids compared to the issue size of 39.73 lakh shares that are on offer.
The IPO, which opened on February 5, is slated to close today. In view of the poor response, the company will have to choose between the two options - either to extend the issue or to suspend it.
Most of you readers maybe new here, I would like to tell you that there was a time in the Indian Capital markets when IPOs were priced at par - Rs 10 Face Value share were issued at the same price. A premium of Rs 40 could be commanded only by Big Brands and Companies :-)
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Published by DalalStreet Business @ 12:25 PM IST.
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Gemini Engi-Fab IPO of 55 lakh shares
Wednesday, January 28, 2009
Gemini Engi-Fab is engaged in manufacturing and salvaging of process equipments through fabrication for various process industries namely, cement, dairy, refinery, pharmaceutical, petrochemical, power and chemical.
Gemini Engi-Fab is set to tap the capital with its initial public offering (IPO) of 55 lakh equity shares of Rs 10 each for cash. The proposed issue represents 46.40% of the fully-diluted post issue paid-up capital of the company.
The IPO will open for subscription on February 3, 2009 and will close on February 6. The issue will take the book-building route with a price band of Rs 75 to Rs 80 per equity share.
The company hopes to mop up around Rs 41.25-44 crore from the issue plans to use the proceeds for setting up of a manufacturing workshop at Umbergaon in Gujarat.
Domestic rating agency CARE has assigned IPO grade 2 to this issue. [On a scale of 5, 5 being the best] The equity shares will be listed on the BSE and NSE.
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Published by DalalStreet Business @ 10:56 AM IST.
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HCC Considering Lavasa Project IPO
Thursday, January 22, 2009
Hindustan Construction Company (HCC) is planning to raise about Rs 1,500 crore through an initial public offering (IPO) for the Lavasa project near Pune. It is free India's first and largest hill city being developed by Lavasa Corporation an HCC Group Company.The company is planning an IPO to fund the cost of the project and will be entering the primary market by October 2010.
The size of the offering is said to be about 10 % of the valuation of the project which currently stands at Rs 10,000 crore and is expected to go up to Rs 15,000 crore.
The hill city is a joint development project by HCC, Avantha Group and Venkateshwara Hatcheries, with 65%, 15 % and 12.5 % stake respectively. On the other hand the project has received an investment of Rs 450 crore from Axis Bank, Allahbad Bank and Bank of India for a stake of 2.5%, 1.5% and 0.5 %, respectively.
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Published by DalalStreet Business @ 1:34 PM IST.
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NHPC will wait for opportune time for floating IPO
Thursday, January 15, 2009
State-run National Hydro-electric Power Corporation is monitoring the market situation watchfully and is waiting for an opportune time for floating its initial public offer (IPO). Reacting to the news earlier surfaced about canceling the public offer, the management has contended that there was no plan of canceling IPO but it was considering deferring till a suitable time is reached.
The company has planned to raise Rs1,680 crore by issuing a record 168 crore shares of a face value of Rs 10 each. Owing to financial requirements to feed the ongoing 11 projects with a capacity of 4,622 MW, the company has been ogling for suitable market situations to raise funds.
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Published by DalalStreet Business @ 3:41 PM IST.
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36 Cos await to raise Rs 75K cr via IPOs
Monday, January 05, 2009
After being unsuccessful in 2008 to raise Rs 75,000 crore through initial public offering (IPO) route, over three dozen firms are holding back IPO plans to raise an estimated Rs 75,000 crore or over $15 billion for the right market conditions, which analysts believe is unlikely before the year-end.
The overall size of the IPO backlog from 2008 is incidentally more than four times of the total amount raised during the year through this route and almost equals the cumulative capital raised over the past three years.
The slackening in the primary market was primarily due to the poor response to the post-IPO listings in the secondary market and the slump in the investors' sentiments due to overall sluggish market conditions.
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Published by DalalStreet Business @ 4:13 PM IST.
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