Wednesday, October 31, 2007

IPO Talk: Religare Enterprises

Religare Enterprises is entering the capital market on 29th October 07 with a public issue of 75.76 lakh equity shares of Rs.10 each, in the band of Rs.160 to Rs.185 per share. The proposed issue is 10% of the expanded equity of Rs.75.76 crores.

The company is 100% holding company for various subsidiaries engaged in stock broking, personal finance, commodities broking, insurance broking, wealth management services, venture capital, investment banking and art initiatives. Reliance Insurance Holding Co. Ltd., an insurance holding company, is 75% subsidiary of the company. The companies are all in place with strong organization network and capable to achieve scalability, over a period of time. Senior level executives and personnel have been recruited by various subsidiaries and business of all these subsidiaries would witness a sharp increase in time to come.

For FY07, on consolidated basis, total income of the company was placed at Rs.320.12 crores with PBT of Rs.47.60 crores and PAT of Rs.25.02 crores resulting in an EPS of Rs.3.67, on pre-issue equity of Rs.68.19 crroes. For 6 months ending 30-09-07, the total income was placed at Rs.307.96 crores with PBT of Rs.57.64 crores and PAT of Rs.36.73 crores, resulting in an annualized EPS of Rs.10.80. This means, present issue is being made at a PE multiple of 17, based on FY 08 earnings, and at the upper band of Rs.185 per share.

Presently, the company with its subsidiaries have 1,217 business locations managed by the company and its subsidiaries as also Business Associates in 392 cities and towns in India. The company proposes to establish 100 more branches for which Rs.26.50 crores has been allocated. Rs.50 crores has been allocated for funding retail finance business. Rs.60.60 crores has been earmarked for lending business and this amount has been sourced from pre-IPO placement, having made at Rs.160 per share.

The post issue equity of the company will be at Rs.75.76 crores and at Rs.185 per share, it has a market capitalization of close to Rs.1,400 crores which is very low, thus having huge scope of expansion. Also, in view of low-base and recent creation of organization for various subsidiaries, CAGR of atleast 40% for the next three years in bottomline is visible. This kind of performance would be well received by the market, post listing.

The issue is very attractively priced and investment is advised at the upper band of Rs.185 per share. This is probably the most economical broking stock which can give handsome returns to the short term and medium term investors as also good listing gains.
Source:sptulsian.com
*****Latest Grey Market Premium: Rs. 250-270/-

IPO Talk: Mundra Port & SEZ

Mundra Port and Special Economic Zone is entering the capital market on 1st November, 07 with a public issue of 402.50 lakh equity shares of Rs.10 each, in the band of Rs.400 to Rs.440 per share.

The company is the developer and operator of Mundra Port, which has a deep water draft ranging from approx. 15 meters to 32 meters in depth, at a distance of about 15 km. from shore, where it is used to unload crude, a big business potential. The port is principally engaged in providing port services for bulk cargo, container cargo, crude oil cargo, and value added port services including railway services. The commercial operations of the port has commenced from October 2001. Total cargo volume at Mundra Port increased from 11.7 million MT in FY 06 to 19.8 million MT in FY 07.

The concession agreement for the port is 30 years, which would expire on 17-02-2031, and 3,404 acres of land has been permitted to get used for the port alongwith a right to use the foreshore land and waterfront, and on 17-02-2031 the port shall be transferred to Gujarat Maritime Board.

The company presently has 15,665 acres of land available and 16,688 acres of additional land are at various stage of being transferred to the company, thus aggregating 32,353 acres for Port and SEZ.

The present equity of the company is Rs.360.04 crores which will increase to Rs.400.68 crores post IPO, of which, promoters stake would be 81.30% while 10% is being issued to the public, while about 8.7% is held by private equity investors like ICICI Bank, IDFC, Govt. of Singapore, Indivest PTE and 3i Venicle (Mauritius) Ltd.

For FY 07, the income of the company was placed at Rs.596 crores with PBT of Rs.175 crores and PAT of Rs.187 crores, due to deferred tax credit of Rs.13.32 crores. The total debt of the company as at Rs.30-06-07 was at Rs.1,399 crores while net worth was at Rs.764 crores.

If we calculate the enterprise value, post IPO, at the upper band of Rs.440 per share, the same works out at Rs.17,600 crores and adding debt of Rs.1,400 crores it works out to Rs.19,000 crores, which is very low compared to the size and operations of the Port and SEZ.

The company now has estimated a requirement of Rs.3,160 crores, which is mainly being Rs.700 crores for SEZ, Rs.2,000 crores for coal terminal project, Rs.255 crores in Adani Petronet (Dahej) Port, Rs.49 crores for Adani Logistic and Rs.156 crores for Inland Conware P. Ltd. This is being financed by debt of Rs.1,200 crores, internal accruals of Rs.525 crores and Rs.1,435 crores from proposed IPO. At the upper band, issue would mobilize Rs.1,770 crores which would take care of this requirement.

The noteworthy feature of the project is that such a big port is already operational, with virtually, entire land for port and SEZ having acquired. The potential of revenue generation is huge in view of all weather nature as also huge cargo inflow of coal mainly for Tata Power (4,000 MW) Ultra Mega Power Project and Adani Power, 2,640 MW, project. The crude cargo would also give huge revenue to the port. SEZ income would be added to the revenue and profitability of the company, in the coming years. However, concession period of 30 years, expiring in 2031 is considered to be of shorter duration.

As the infrastructure projects have huge potential and this being an operational Port, it represents an excellent investment bet and is recommended for investment even at the upper band of Rs.440 per share.
Source:sptulsian.com
*****Latest Grey Market Premium : 300-320

Markets Today

The markets ended marginally in green off day's high ahead of the Fed meet announcement. Selective buying was seen in power, bank, real estate stocks. Action was seen in the midcap space as the index is up nearly 1% and the smallcap index is giving it good company up 1.5%.
Market is eyeing Fed's crucial decision on rate cut, anayst are expecting a 25 bps rate cut.
On the results front, Bharti's results beat street expectations as non mobile business has helped in the outperformance. However HUL came out with weak set of numbers.
Realty majors Unitech and DLF are trading in green on the back of good set of numbers
Reliance Energy, Ranbaxy, NTPC, Sterlite Ind, Bharti, Reliance Communication, Reliance, Tata Steel, SBI were among the top gainers on the indices.
Top losers on the Sensex are HUL, Grasim, BHEL, Tata Motors, TCS , HDFC Bank and Wipro.
Sensex was up 54.48 points or 0.28% at 19837.99, and the Nifty up 31.90 points or 0.54% at 5900.65.
About 1537 shares have advanced, 1435 shares declined, and 87 shares are unchanged.
The BSE Midcap Index ended at 8,135.21 up 1.1%.
The BSE Smallcap Index ended at 9,796.86 up 1.6%.
The BSE Bankex was up 1% at 10,655.33. Bank of Baroda, PNB, HDFC Bank, Canara Bank, ICICI Bank moved upwards.
The BSE Capital Goods Index was down 1% at 19,795.32. Reliance Infra, Kalpataru Power, Carborundum, Alfa Laval, Greaves Cotton closed lower.
The BSE Auto Index closed at 5,507.17 up 0.5%. Exide Industrie, MRF, Bharat Forge, Mah and Mah, Cummins closed higher.
The BSE Metal Index closed at 17,884.93 up 3.4%. Jindal Steel, Jindal Saw, Hind Zinc, JindalStainless, Sesa Goa closed higher.
The BSE FMCG Index closed down 1% at 2,126.59. HUL, United Spirits, United Brewerie, Godrej Consumer closed lower.
BSE Oil and Gas Index closed at 11,658.48 up 1.2%. Reliance Petro, Petronet LNG, Reliance Natura, IOC, ONGC, BPCL ended higher.
The BSE IT Index was at 4,618.72 down 0.6%. Patni Computer, Tech Mahindra, TCS, Wipro closed lower.
The NSE cash turnover was at Rs 22652.01 crore and the NSE F&O turnover was at Rs 71090.73 crore. The BSE cash turnover was Rs 10018.18 crore. Total market wide turnover was at Rs 103760.92 crore.
Source:moneycontrol.com

Intraday Calls for 31st October

Market may open nagetive and see some profit booking but later recovery expected.

Buy for Intraday: (Buy at lower levels)

Exide Industries (67)
Nagarjuna Fert. (60)
Essar Oil (56)
JP Hydro (84)
REL (1795)
Ansal Properties & Infra (244)
ABB Ltd. (1552)
Poly Medicure (135)
Ruchi Soya (90)
Apar Industries (253)
Lok Housing (196)

Keep an eye on small psu banking stocks like Vijaya Bank, Dena Bank, UCO Bank, buy at dip for short term gain.

Good Luck

Disclaimer

The information in this publication is provided by http://www.moneybazzar.blogspot.com/ is intended for use for Readers & Traders . Every effort is made to provide accurate information, but http://www.moneybazzar.blogspot.com/ cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.



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