Avoid - Spice Telecom
Tuesday, June 26, 2007
Value investors should avoid investing in the IPO of Spice Communications. I am a subscriber of Spice in Karantaka and it is the worst Telecom company in the History of India.
They were the first one to introduce Telecom services in Karnataka. Today Karnataka is the largest Telecom Circle and Spice is Last in the race. What have they done in the past 10 years ? They are promising they will do a lot in the next 10-12 months is a straight forward lie.
Spice is backed by non-investor friendly promoters, Modis, who are like fly by night operators.
National Stock exchange refused to list the shares of Spice because they have acumulated losses more than their net worth.
Blindly Avoid the IPO of Spice. Instead look at RCom or Bharti Airtel.
Vishal Retail Allotment Status is now available online and can be checked here.
Published by DalalStreet Business @ 10:04 PM
Meghmani Organics Allotment Status
Thursday, June 21, 2007
You can now check the status of your application of Meghmani Organics Limited IPO here. Good Luck for your listing gains.
Published by DalalStreet Business @ 12:12 AM
ICICI Bank FPO Bidding Details
Tuesday, June 19, 2007
For long term retail individual investors who are willing to hold the stock, here is how you can bid for the ICICI Bank Follow On Public Offering.
Payment option I (Part payment)
- Retail bidders: Rs. 250 per Equity Share on application. Rs. 250 on allotment and the balance on call to be made within six months of allotment.
- The retail client can maximum bid for 114 x Rs. 885 = 1,00,890 wherein he will have to pay 114 x Rs. 250 = 28,500/-.
- At lower side, client can bid for 108 x Rs. 950 = 1,02,600 wherein he will have to pay 108 x Rs. 250 = 27,000/-
Payment option II (Full payment)
- Retail customer can bid for maximum 114 shares at bid amount of Rs. 885/- (lower price band), whereby bid value which will go in Exchange will be Rs. 1,00,890/- (114 x 885) and bank account will be debited for Rs. 95,190/- (114 x 835) [Rs 835 after considering discount of Rs. 50].
- Further, retail client can bid for 108 shares at bid amount of Rs. 950/- (upper price band) whereby bid value which will go in Exchange will be Rs. 1,02,600/- (108 x 950) and bank account will be debited for Rs. 97,200/- (108 x 900) [Rs 900 after considering discount of Rs. 50].
Published by DalalStreet Business @ 2:48 PM
ICICI Bank - Public Offer
Monday, June 18, 2007
ICICI Bank is diluting its equity yet again with a follow on Public Offer. They are also playing a gimmick of partly paid up shares for Individual Retail investors at Rs 250 on application and Rs 250 on allotment. The partly paid up stock will also be listed separately for trading.
The IPO Price band for fully paid up share is priced between Rs 885 and Rs 950 per share. The bank has given retail investors the second option of paying the full bid amount minus the discount at the time of application. So even if you end up bidding for 100 shares at Rs 900, it is the near ICICI Bank's Friday's closing price of Rs 908.
With such a large equity dilution, short term retail investors may get the stock lower than the IPO price. With markets in correction mode, it is better to AVOID the FPO of ICICI Bank and look for opportunities in the secondary market or look for very small gains through this Follow on Public Offer.
Their is another way to play this IPO - Buy ICICI Bank Put Option or go Short in Futures and Bid for the stock in FPO. So in either case of the stock movement, you can make some money.
Published by DalalStreet Business @ 8:29 AM
DLF Limited Subscribed 3.47 times
Thursday, June 14, 2007
The DLF IPO managed to subscribe 3.47 times with most of the demand coming from Institutional Investors. High Networth Individuals and Retail investors participation was very very low. Here are the final figures that National abd Mumbai Stock exchange compiled and sent to us in a fax message.
| Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| (QIBs) | 104400000 | 535447120 | 5.1288 |
| Non Institutional | 17400000 | 19894650 | 1.1434 |
| Retail Individual Investors (RIIs) | 52200000 | 50903990 | 0.9752 |
All retail investors will be allotted in FULL. Good Luck for your Listing Gains (if any).
Published by DalalStreet Business @ 11:03 PM
Vishal Retail Oversubscribed 69.08 times
Wednesday, June 13, 2007
The IPO of Vishal Retail for which we had a Blind Subscribe recommendation is oversubscribed by 69 times according to NSE Release. Here are the final subscription figures.
| Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| Qualified Institutional Buyers (QIBs) | 2689565 | 122513375 | 45.5514 |
| Non Institutional Investors | 448261 | 139664900 | 311.5705 |
| Retail Individual Investors (RIIs) | 1344783 | 67779075 | 50.4015 |
The figures given by CNBC TV 18 MoneyControl are saying that the issue is subscribed 82 times is WRONG. Issue is oversubscribed by just 69.08 times. Don't TRUST MoneyControl, they are Misleading Investors.
As we had already predicted, the fate of all applications will be decided by Lottery. Good Luck for your allotment. Grey Market Premium is very high Rs150+.
Published by DalalStreet Business @ 10:15 PM
Avoid DLF Limited - Review
Tuesday, June 12, 2007
DLF India - Building India by looting Small Retail Indian Investors IPO is now open for subscription. We at Dalal Street Business, after a careful review put an AVOID Recommendation for DLF IPO.
Kindly Read the Indian Real Estate Stocks and Sector Research reports here.
Sure DLF is a big company backed by few Congressmen in the corridors of New Delhi. However, the issue pricing is expensive. Fair Value of its Land Bank is between Rs 375 to Rs 425.
Financials of DLF:
The company has reported fairly flat topline between 2002 and 2005 at around Rs 550 crore. For the year ending March-31st 2006, the company reported a 100% rise in topline to Rs 1,242 crore and for the following year it reported Rs 4,034 crore. Out of this Rs 4,034 crore, the company has other income component of Rs 1,416 crore which is the value of property sold to promoters group company - A Shady Deal.
DLF reported a net profit of Rs 1,941 crore for year ended March,2007.
The debt-equity ratio as on March 31, 2007 was 2.5:1. It paid interest of Rs.789.6 cr in FY07 on loans of Rs.9,932 cr (incl floating interest loans of Rs.7,489 cr). Any extended slowdown in the real estate industry will hit DLF badly due to its debt servicing obligations. This combined with the fact that DLF had large negative operating cash flows in FY06 and FY07 (Rs.949 and Rs.5831 cr respectively) could impair its capacity to raise large debts on a continuing basis.
IPO Offer:
Fully Diluted Equity after IPO: 170.48 crore shares of Rs 2.0 each
IPO Offer: Price band of Rs 500 to Rs 550 amounting to Rs 8,750 to Rs 9,625 crore
Why should You Avoid the Issue ?
- DLF is mainly banking for the IPO to sail through on the value of its Land Bank. Cash Flow has been negative as indicated above. Approximately 60% of its DLF's reserves comprise land for which DLF have not yet obtained a certificate for change of land use.
- More than 50% of the land reserves is concentrated in NCR, mainly in and around Gurgaon and another 23% is in Kolkata (incl Dankuni project). With very little jobs being created in those Areas, DLF is under increasing threat from oversupply.
- Shady Deals: DLF has 112 related parties including subsidiaries and associates and substantial inter-company transactions.
- In anticipation of DLF issue, another comparable stock Unitech made an all time high of Rs 601 on May-29th where it saw substantial delivery based SELLING and the stock currently trades at Rs 490 levels.
Post-Listing Strategy:
At Rs 550 the issue is really really expensive and you can avoid this. Long Term investors can pick the stock around Rs 425 levels.
Published by DalalStreet Business @ 11:48 AM
Subscribe to Vishal Retail - Review
Monday, June 11, 2007
Investors willing to take exposure in the booming Retail Sector in India, can subscribe at "Cut-Off" to the IPO of Vishal Megamart.Vishal Retail focuses on value retailing in tier-II and tier-III cities. 43 of its 50 stores are located in these cities. Sure their is enough potential for retailing in these cities as well. Through backward integration, in-house design and manufacture of
apparels, the Company substantially controls cost of production and pass on the cost benefits to customers.
Financials:
Over the past 3 years, the company has reported a top line growth of 100% YoY. For they ear ended March-31st 2007, the company had total income of Rs 771 crore and a Net Profit of Rs 24.9 crore. ICICI in its research report expects the Vishal Retail to report a Net Profit of Rs 45.6 crore for year ending March-2008.
IPO Offer:
Offer: Rs 110 crore worth of shares in the price band of Rs 230 to Rs 270.
Fully Diluted Equity Post-IPO: 22.4 crore
Expected EPS assuming Vishal Retail reports a net profit of Rs 45 crore = Rs 20.4
So in the current IPO the shares are offered at a forward P/E of mere 13.5 compared to 30+ for other retailers. Blindly subscribe to the issue. Retail Individual Investors category of the issue is just Rs 33 crore, so allotment will be LOTTERY for even Rs 1.0 lakh application.
Post-Listing Strategy:
The company has no immediate threat and is a good investment bet in the medium term. Vishal Retail will benefit from low real estate prices and staff costs in tier II and tier III cities. However, on strong listing, you are requested to book profits.
Published by DalalStreet Business @ 10:24 PM
Nelcast IPO Subscribed 7.36 Times
Friday, June 08, 2007
The IPO of Nelcast which closed for subscription this evening was subscribed 7.36 time according to a fax received just a while ago.
Here is the breakup of subscription.
| 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) | 2175000 | 24411780 | 11.2238 |
| 2 | Non Institutional Investors | 652500 | 604740 | 0.9268 |
| 3 | Retail Individual Investors (RIIs) | 1522500 | 6991290 | 4.5920 |
All Retail Individual Investor's application for more than 150 shares will get firm allotment of at least 30 shares. Good Luck and keep checking back for more information on basis of allotment and grey market pricing.
Published by DalalStreet Business @ 6:39 PM
Nelcast Review and Recommendation
Nelcast is dependent on the auto industry ramping up of exports and increasing machining are required to maintain growth as domestic users face a slowdown.
Right now, Neelcast exports about 9% of its sales Globally, export of castings to developed nations is on the rise on account of rising costs, lack of skilled foundry people and environmental restrictions in these markets. The company plans to increase its focus on exports and become the preferred full service supplier to original equipment manufacturers (OEMs) across the globe. The export target is 30% of sales by 2010.
Strengths:
The composition of machined castings is about 10% of production. This is to be increased to about 20%-25% over the next two years so as to improve margin.
Weakness:
More than 70% of revenue is derived from the HCV and tractor segments. Both these user industries are set to slow down significantly in FY 2008 when the company’s substantial capacity expansion is under implementation.
Ancillaries to domestic auto and auto components sectors often have to maintain their prices despite rising raw material cost due to a limited number of clients. Margin is down from 11.9% in FY 2004 to 8.9% in FY 2006, though it jumped to 13.4% in FY 2007.
Valuation:
At a price band of Rs 195 – 219, Nelcast’s P/E works out to 17.2 – 19.3 times FY 20007 earning on post-diluted equity. Industry peer Ennore Foundries is trading at a P/E of 19.0.
Investors with some risk appetite may apply at Cut-Off.
Published by DalalStreet Business @ 10:33 AM
