IPO Updates: 29-1-2010

IPO News Dt.: 29-1-2010

Company Name	Open Date	Close Date	Issue Size	Offer Price	Rating	Recomm.
Aqua Logistics (BOOK Building)	25-1-2010	2-2-2010	65,21,738 Shares (Rs. 150 Cr.)	200 to 225	41 %	Risky
Syncom Healthcare (BOOK Building)	27-1-2010	29-1-2010	75,00,000 Shares (Rs. 56 Cr.)	65 to 75	42 %	Listing Gain
Thangamayil Jewellery (BOOK Building)	27-1-2010	29-1-2010	38,33,666 Shares (Rs. 29 Cr.)	70 to 75	40 %	Average
Vascon Engg. (BOOK Building)	27-1-2010	29-1-2010	1,08,00,000 Shares (Rs. 200 Cr.)	165 to 185	44 %	Good (Long Term)
D. B. Realty (BOOK Building)	29-1-2010	2-2-2010	30,864,197 Shares (Rs. 1500 Cr.)	468 to 486	--	--
Emmbi Polyarns (BOOK Building)	1-2-2010	3-2-2010	95,74,000 Shares (Rs. 43,08,30,000)	40 to 45	--	--

Aqua Logistics IPO Subscribed

	25-1-2010	27-1-2010	28-1-2010
QIB	0.000	0.000	0.1026
HNI	0.000	0.1041	0.7225
Retail	0.1845	0.2605	1.4143
Average	0.06	0.11	0.60

Syncom Healthcare IPO Subscribed

	27-1-2010	28-1-2010
QIB	0.2643	0.4667
HNI	1.058	1.1344
Retail	0.5375	0.9723
Average	0.48	0.74

Thangamayil Jewellery IPO Subscribed

	27-1-2010	28-1-2010
QIB	0.2011	0.2011
HNI	0.000	0.8139
Retail	0.1180	0.5888
Employee	0.000	0.1935
Average	0.11	0.46

Vascon Engg. IPO Subscribed

	27-1-2010	28-1-2010
QIB	0.3489	0.9267
HNI	0.0244	0.3796
Retail	0.0784	0.1158
Employee	0.0973	0.1929
Average	0.23	0.62

DB Realty: Nice Estate

D B Realty is entering the capital market from 29th Jan 2010 to 2nd Feb 2010 with a public issue of Rs. 1,500 crores in the price band of Rs. 468 to Rs. 486 per equity Share.

The present equity of the company is at Rs. 211.20 crores, which is likely to get raised to Rs. 243 crores, considering issue made at the lower price band of Rs. 468 per share. This will result in a 13.20% equity dilution and expected to have a market capitalisation of close to Rs. 11,500 crores.

The strong point goes in favour of the promoters of the company are, its strong presence in Mumbai City, especially in Central Mumbai, where selling price rules between Rs. 18,000 to Rs. 25,000 per sq. feet, coupled with almost debt free status and strong execution capability.

The company as on 31st December 09, has 11 ongoing projects with saleable area of 19.51 million square feet, 8 forthcoming projects with saleable area of 19.28 million square feet and 6 upcoming projects of 22.24 million square feet of saleable area. The total area of 61.03 million sq. feet, represents the share of the company. Also, the company has presence in pockets of Mumbai like Jacob Circle (6.22 lakh sq. ft.) Mahalaxmi (14.84 lakh sq. ft.) Andheri (East) (12.49 lakh sq. ft.) Dahisar (16.16 lakh sq. ft.) Goregaon (East) (8.80 lakh sq. ft) Kandivali (West) (4.91 lakh sq.ft.) and Mahul with 87.01 lakh sq. feet. All these projects are being developed in the location most preferred by the prospective buyers, with average selling price in central Mumbai ruling above Rs. 20,000 per sq. feet. Even in suburban Mumbai, all the projects are in the western part, where average selling price is at around Rs. 10,000 per sq. ft.

The promoters of the company have the track record of developing composite housing complexes in the period of 1985 to 2005. About 37 lakh sq. ft. has been developed at Kandivali (West) with about 42 lakh sq. ft. in Goregaon (East). All these projects and complexes are equipped with school, shopping malls, commercial and shopping complexes, multiplexes, community hall, temples, medical centres etc., which has resulted in better saleability and preferred locations of the buyers.

Presently, HDIL has good presence in Mumbai, of which over 50% is in distant suburbs of western Mumbai at Vasai Virar. Also, redevelopment of Mumbai Airport land is in JV with GVK. So all these gives less of development land and more of TDRs, which are largely sold by HDIL. This results in low margin and inspite of this, HDIL has market cap of Rs. 11,000 crores and EV of Rs. 14,500 crores.

The company also has its forthcoming projects coming up at Goregaon, Dahisar, Malad, Mumbai Central, Byculla, Bandra, Kurla Complex and Mira Road. All these projects are going to give very good margins, as also fast selling of the units and apartments. Thus, the company has an advantage and edge of probably the only and largest company, amongst the listed peers, to have such a strong presence in Mumbai. Also, due to saleable area of close to 61 million sq. feet, it should be able to have strong pipeline of projects for next 7-8 years,of which, one third are under development.

Considering all this, due to strong presence in Mumbai coupled with debt free status, issue looks good and recommended even at the upper band of Rs. 486. The issue should be able to give good returns, if held with 6-12 months view, as also listing gains, as it is found to be reasonably priced while comparing it, with its listed peers.

One can subscribe the issue.

Grey Market Premium Dt. 27-1-2010

Latest Grey Market Premium Dt. 27-1-2010

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)
Jubilant Food Works	135 to 145	20 to 21	--
Infinite Computer	165	33 to 35	--
Birla Shloka	45 to 50	Discount	--
Aqua Logistics	220 to 230	12 to 13	2050 to 2100
Syncom Healthcare	65 to 75	6 to 6.50	1950 to 2000
Thangamayil Jewellery	70 to 75	3.50 to 4	1850 to 1900
Vascon Engg.	165 to 185	20 to 21	1900 to 1950
D. B. Realty	468 to 486	22 to 23	--
Emmbi Polyarns	40 o 45	4 to 6	--

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Vascon Engineers: Whats on?

Vascon Engineers is entering the capital market from 27 Jan 2010 to 29 Jan 2010, with a public issue of 108 lakh equity shares of Rs. 10 each, in the price band of Rs. 165 to Rs. 185 per share.

The business model of the company is quite mixed and confusing, with major chunk of its topline coming from contracting or EPC business, but the company is relying more on its land bank, for its valuations.

The performance of the company is on a declining trend and FY09 and H1 of FY10 has disturbing and declining trend of profitability. For FY09, the total income of the company was at Rs. 530 crores with PAT at Rs. 21.05 crores, resulting in an EPS of Rs. 2.80. For H1 of FY10, the total income of the company was at Rs. 319 crores with PAT at Rs. 18.53 crores, which results in an annualized EPS of Rs. 4.70. Even in this, the major contribution, to the extent of about Rs. 260 crores, has come from EPC while realty has contributed just Rs. 50 crores.

Even present paid up equity of the company is quite high at Rs. 79.20 crores, which will rise to Rs. 90.35 crores, post IPO. This would result in a market capitalization of Rs. 1,670 crores at the upper band of Rs. 185 per share, with enterprise value of Rs. 1,800 crores.

The company can neither be treated as a contracting or EPC company nor realty company. Also, it falls in mid category segment of both the sectors, where PE multiple of such stocks are anywhere between 8 to 10 times. The Company is issuing shares at a PE of over 30 times, based on FY 10 earnings, which is very expensive, even at the lower band of Rs. 165. Even the present net worth of the company at Rs. 450 crores does not justify such valuations.

There are many players available in this space, in the secondary market, which are ruling at 50% valuations, of the primary market valuations asked by the company. So, no point in considering this IPO,even at the lower band of Rs. 165.

Clear advice is to avoid the issue.

Thangamayil Jewellery: Fine Jewellery

Thangamayil Jewellery is entering the capital market 27th Jan 10 to 29th Jan 10, with a public issue of Rs. 28.75 crores, with the price band of Rs. 70 to Rs. 75 per share.

The company is a regional player with presence in Madurai and engaged in jewellery retailing. To broad base its presence, the company is planning to open retail outlets in Tuticorin, Dindigul, Theni,Nagarcoil, Thirunelveli, Kovilpatti and Sivakasi and want to spread to the whole state, instead to a city. For this, fund requirement is estimated at Rs. 48 crores, which has been partly mobilized from pre-IPO placement of Rs. 6.25 crores, at Rs. 75 per share, while Rs. 12.84 crores is coming from internal accruals. Balance of Rs. 28.75 crores is to come via IPO. As the company has a net worth of Rs. 37 crores, as at 30-9-09, it may not be difficult to source a part fund from internal accruals. The company had a total loan of Rs. 51.25 crores as at 30-9-09, which is largely to finance the working capital requirement of the company, as it has been holding net current assets of close to Rs. 80 crores, of which, Rs. 78 crores is as inventory.

The company has also been improving on its financial performance year after year. For FY 09, the total income of the company was at Rs. 247 crores, with PAT at Rs. 7.50 crores, giving an EPS of Rs. 8.30. For 6 months ending 30-9-09, the total income improved to Rs. 209 crores, with PAT at Rs. 7.97 crores, resulting in an annualized EPS of Rs. 17.50.

The company is a tiny player and would continue to remain a small cap company, with an expected market cap of close to Rs. 100 crores. Its present paid up equity of Rs. 9.89 crores is likely to move to Rs. 13.75 crores, post IPO.

We all know that, it is the time to move to branded jewellery with quality assurance provided to the customers. Also, retail jewellery segment has better margin as compared to exports or trading in bullion and diamonds. The company is trying to expand in Tamil Nadu state with minimal capex, which will help the company to post a growth of about 40% every year, over next 3-4 years.

Expecting an EPS of Rs. 15 for FY 10 on conservative basis, share at the upper band of Rs. 75 is being issued at a PE of 5 times, which looks reasonable, while comparing with the other listed peers. Also, expected growth in the coming years can make the stock looks attractive, due to fall in its PE multiples. However, due to small cap status and being a regional player with presence in about 2 states, it may be a limiting factor for the stock.

Still, on an overall basis, stock at upper band of Rs. 75, looks reasonably priced, which is likely to give listing gain as well as gain over next 6-12 months.

Aqua Logistics: On Fragile Grounds

Aqua Logistics is entering the capital market from 25th Jan 10 to 28th Jan 10, with a public issue of Rs. 150 crores, in the band of Rs. 220 to Rs. 230 per share.

The company is full scope third party logistic service provider delivering end to end solutions in the logistic and supply chain domain, which include Multimodal Transportation, Contract Logistics, Regulatory Compliance, Warehousing, Valued added Services and Project Logistics.

The company has been rapidly expanding its operations with an annual growth of over 100%, in its topline and bottomline, over the last 5 years. For FY 09, the total income of the company was placed at Rs. 214 crores with PAT at Rs. 9.84 crores, resulting in an EPS of Rs. 7.62. For 6 months ending 30-9-09, the total income was at Rs. 154 crores with PAT at Rs 8.36 crores, resulting in an annualized EPS of Rs. 12.30.

The proposed fund of Rs. 150 crores is earmarked for purchase of specialized equipments (Rs. 30.50 crores) Acquisitions ( Rs. 35 crores) expansion of office (Rs. 17.10 crores) and for working capital requirements. The comforting feature of the company is that, inspite of over 100% increase in its performance, the debt of the company are quite low at Rs. 33 crores as at 30-9-09, on net worth of Rs. 75.42 crores. The company also has Enam Share and H T Media as its shareholders, though Enam has subscribed to it, in Jan. 08, at Rs. 100 per share. H T Media subscribed to just 1 lakh share in August 08, at Rs. 500 per share. Error of judgement? No, they have been subsequently compensated by further issue of 1.33 lakh shares, on 4-8-09, free of cost, thus bringing down the cost, to about Rs. 215 per share.

This industry has been growing rapidly in the last 4-5 years, while there are very limited listed peers available, like Gati, TCI, Gateway Distripark, Allcargo Global and Arshiya International. Based on FY 10 performance, share at Rs. 230 is being issued at a PE of 18 times, at the upper band of Rs. 230 per share, with expected market capitalization of Rs. 500 crores, on expected post issue equity of Rs. 20.50 crores.

It is certain that fresh infusion of the funds would improve the financial performance of the company. But still, PE of 18 times via primary market route, looks quite stretched. Allcargo Global, a leading and established player, with expected revenue of Rs. 500 crores for FY 10, is likely to have a PAT of Rs. 125 crores, resulting in an EPS of close to Rs. 10. Share of this company is ruling at Rs. 200, resulting in a PE of about 20 times.

So, this company is yet to prove itself and considering a gap required between secondary and primary market price, of about 15%, share does not deserve a valuation of over Rs. 200 per share. Hence, one may consider skipping it and go for listed peers like Gati, Allcargo or TCI.

Grey Market Premium Dt. 25-1-2010

Latest Grey Market Premium Dt. 25-1-2010

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)
Jubilant Food Works	135 to 145	20 to 21	--
Infinite Computer	165	33 to 35	--
Birla Shloka	45 to 50	Discount	--
Aqua Logistics	220 to 230	12 to 13	2050 to 2100
Syncom Healthcare	65 to 75	6 to 6.50	1950 to 2000
Thangamayil Jewellery	70 to 75	3.50 to 4	1850 to 1900
Vascon Engg.	165 to 185	20 to 21	1900 to 1950

Note: Dont subscribe for issue by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamental of the companies