ICICI Bank Limited is entering Indian primary market with a Public issue of * equity shares. Below are the salient features of this issue:
Business of the Company
ICICI Bank Limited is a household name in India. Incorporated in 1994, it is currently the largest private sector bank and the second largest bank in India in terms of assets. Company is a leading name in both corporate and retail banking. It has a total of 710 branches, 45 extension counters and 3,271 ATMs. The bank has approximately 24.0 million retail customer accounts. Their corporate customers include India’s leading companies as well as growth-oriented small and middle market businesses.
Promoters
The company has no identifiable promoters. Nearly 25% of total capital is in form of ADS. There are a total of 113.73 million outstanding ADSs. Life Insurance Corporation of India has nearly 7.8 percent of equity. Surprisingly, Bajaj Auto Ltd. has nearly 4% of equity shares of the bank. The bank is however professionally managed.
Financials
ICICI Bank Ltd. is a consistent profit making company. For the FY ended March 31, 2007, the company clocked a total interest income of Rs. 230 billion rupees. The net interest income for the same period was about Rs. 66.36 billion and total income was about Rs.125.65 billion. The PAT for the year was Rs.31.10 billion. For FY 2006, company had clocked a turnover of Rs.88.90 billion and a net profit of Rs.25.4 billion. For both the above periods, corresponding diluted EPS was Rs.34.64 and Rs. 32.49 respectively.
Particulars of the Issue
The issue is for * equity shares of Rs.10 each for cash at a price of Rs.* per share aggregating to Rs.* crores. The issue will constitute about * of fully diluted post paid up equity capital.
Basis for Issue price
ICICI Bank Ltd. is India’s largest private sector bank, and the second largest bank in India in terms of total assets. At May 10, 2007 the bank had the largest market capitalization among all banks in India. Its subsidiaries in life and non-life insurance have achieved leadership positions among private sector life and non-life insurance companies. Its Net NPA Ratio was 0.98% at March 31, 2007. Its advances increased 34% to Rs. 1,958.66 billion at March 31, 2007
Objects of the Issue
Main object of this issue by the bank is to augment its capital base to meet future capital adequacy requirements arising out of growth in its businesses and for other general corporate purposes. Other general corporate purposes will include development of channel infrastructure to support business growth and service customers in a better way.
Risks
Following are the key risks which can impact company’s performance:
a. Volatility in interest rates could adversely affect net interest margin, the value of fixed income portfolio, income from treasury operations, the quality of loan portfolio and financial performance.
b. Like for any other bank, level of non-performing assets remains as a major risk.
c. Decrease in value of collateral is a potential risk for the bank.
d. Reorganization of holdings in insurance and asset management subsidiaries remains a challenge for the bank.
e. Foreign exchange rates fluctuations can affect the company.
f. Government policies also have major impact on the company’s business.
* indicate that information is yet to be declared by the company.
Category: IPO/NFO
Spice Communications Ltd.
Spice Communication Limited is entering Indian primary market with a Public issue of 137,985,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Spice Communications Ltd. is in the business of providing mobile telephony services. It started its operations in 1997. It is the second largest cellular service provider in Punjab and the sixth largest in Karnataka. Company till the date of 31st March, 2006 has a subscriber base of about 2.45 million in these states. Out of this, about 1.92 million were pre paid and about 0.53 million were post paid customers.
Promoters
The company is promoted by the Mr. Dilip Modi. He is also promoter of other companies in the Modi family.
Financials
Spice Communication Ltd. is a loss making company. For the FY ended June 30, 2006, the company clocked a turnover of Rs. 680 crores. The restated net loss for the same period was about Rs. 69 crores. For FY 2007, till September’2006, company had clocked a turnover of Rs.185 crores and a net loss of Rs.25 crores. For FY 2005 and FY 2004, the top line was Rs. 643 and Rs. 554 crores approximately. The net profit for FY 2005 was Rs. 7 crores and for FY 2004 net loss was Rs. 23 crores.
Particulars of the Issue
Spice Communication Ltd. IPO is a fresh 100% Book Building issue of 137,985,000 Equity Shares of Rs. 10 each. At least 135,985,000 Equity Shares of Rs. 10 each is reserved for the retail investors.
Basis for Issue price
Spice Communication Ltd. claims that it’s a strong player in its circle of operations. It claims it is the second largest operator in Punjab. Its strategic investor TM is considered as one of its strong point. It claims it has a vibrant brand name and strong management team.
Objects of the Issue
Primary objects of the issues are payment of long term debt, payment for NLD/ILD license fees and meet capital expenditure requirements. About Rs. 64 crores will be used for NLD and ILD fees and related expenses. Also another object of the issue is the obvious listing gains of its equity shares.
Risks
Following are the key risks which can impact company’s performance:
a. Certain Persons forming part of Promoter Group are involved in certain legal proceedings and regulatory matters, some of which may have a significant impact on business, financial condition and results of operations. Some of these are for defaulting on loan re-payments.
b. Company is a regional player in the cellular services industry and significant competition from larger, national cellular service providers may have a material adverse effect on our profitability.
c. Customer base is small.
d. Company has made significant losses in current financial year and also in the past.
Magnum Ventures Ltd.
Magnum Ventures Limited is entering Indian primary market with a Public issue of 1, 76, 40,750 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Magnum Ventures Limited is a company which has business interest in multiple fields. It is involved in trading and manufacturing of paper for more then 25 years. The existing manufacturing capacity includes writing and printing paper, and duplex boards with the total annual capacity at 85,000 MT. Company has 3 manufacturing units located at Sahibabad, UP.
Promoters
The company is promoted by the Jain family. The key promoters of the company are Mr. Praveen Kumar Jain, Mr. Pradeep Kumar Jain, Mr. Parmod Kumar Jain and Mr. Vinod Kumar Jain. There are more members of the Jain family in the promoter group. Rose Corner Trading Company LLC., Dubai; Delhi Paper Company (Partnership Firm) are the other group companies.
Financials
Magnum Ventures Ltd. has shown consistent profits in last 5 years. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 74 crores. The restated net profit for the same period was about Rs. 8.10 crores. For FY 2007, till September’2006, company had already clocked a turnover of Rs.59 crores and a net profit of Rs.4.7 crores. For FY 2005 and FY 2004, the top line was Rs. 61.59 and Rs. 58.36 crores approximately. The net profit for FY 2005 was Rs.2.31 crores and for FY 2004 was Rs. 1.14 crores.
Particulars of the Issue
Magnum Ventures Ltd. IPO is a fresh 100% Book Building issue of 1,76,40,750 equity shares. Issued, Subscribed and Paid up Capital before the Issue is 1, 99, 60,700 Equity Shares of Rs.10/- each. Paid up Share Capital after the Issue will be 3,76,01,450 Equity shares of Rs.10/- each.
Basis for Issue price
Magnum Ventures Limited is a 26-year-old Company engaged in the Paper industry. The Company is strategically located in close proximity to the source of raw materials and main customers for supply of finished products. Company has captive power plant and a de-inking plant to manufacture better quality paper. The proposed hotel is near to Delhi. Plus, the promoters believe that they have more then 2 decades of experience.
Objects of the Issue
The primary purpose is to modernize its production facilities of its Paper Unit II and III by technological upgradation including replacement of plant and machinery with regard to manufacturing of duplex board, writing and printing paper, and allied sections such as chemicals and Fibre Recovery Section, Recycling of Backward System etc., at a project cost of Rs. 50 crores. The other main purpose is to venture into hospitality industry by setting up a 4 Star Business Hotel with 212 rooms, conference halls, food & beverages and other facilities, at a project cost of Rs. 102.63 crores.
Risks
Following are the key risks which can impact company’s performance:
a. Paper industry is a cyclical and labor intensive industry.
b. Both paper and hotel industry are highly competitive sectors.
c. Government tax benefits changes, economic growth changes, foreign exchange rates are some other external risk factors to be considered before applying for this IPO.
d. Company is fighting various tax related cases. Disputed tax amount totals up to around Rs.3.30 crores.
e. License agreement between the company and Country Inn & Suites by Carlson is non-exclusive.
Indowind Energy Ltd.
Indowind Energy Limited is entering Indian primary market with a Public issue of 1,25,00,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Indowind started developing wind farms in a small way by installing a 225 KW Wind Electric Generator, in September 1995. Since then, the Company has been expanding wind farm capacity every year to reach the present capacity of 16.825MW and 17.915 MW for clients & group companies whose O&M is with the Company. The Company is currently in the process of implementing additional capacity of 9MW capacity in Karnataka.
The current scope of operations of Company includes:
A) Wind Power Generation
B) Operations & Maintenance of WEG’s
C) Turnkey operations for windmill projects
Promoters
The company is promoted by the entrepreneur Mr. K V Bala. Subuthi Finance Limited and Loyal Credit and Investments Limited are the other promoters of the company.
Financials
Indowind Energy Ltd. has shown consistent profits in last 5 years. For the FY ended June 30, 2006, the company clocked a turnover of Rs. 26 crores. The restated net profit for the same period was about Rs. 5.20 crores. For FY 2007, till September’2006, company had clocked a turnover of Rs.4.66 crores and a net profit of Rs.2.15 crores. From past 2 years, nearly 50% of sales come from Project Income. However, for the 3 months of FY 2007, no Project Income is shown in the financial results. For FY 2005 and FY 2004, the top line was Rs. 19.83 and Rs. 8.66 crores approximately. The net profit for FY 2005 was Rs. 4.14 crores and for FY 2004 was Rs. 3.08 crores.
Particulars of the Issue
Indowind Energy Ltd. IPO is a fresh 100% Book Building issue of 1,25,00,000 Equity Shares of face value of Rs. 10/- each constituting 25.53% of the fully diluted post issue paid up capital of the Company. At least 42,84,000 Equity Shares of face value of Rs.10/- each constituting at least 35% of the Net Issue is reserved for the retail investors.
Basis for Issue price
Indowind Energy Ltd. claims that it’s a consistently profit making company. It generates power without using any raw materials. Company has become the first Wind Energy company from India to get the Carbon Credits (Certified Emission Reductions) issued by UNFCCC for its recently commissioned 12.3 MW projects in Tamilnadu under the Clean Development Mechanism of Kyoto Protocol.
Objects of the Issue
The Setting up 9 MW Wind Farm Project in at Chitradurga, Karnataka is one of the main objects of issue. Then purchase of Hydraulic cranes and acquisition of second hand Wind Energy Generators (WEG) from Banks are other key objects. Company intends to foreclose lease with ICICI Bank and UTI Bank with issue proceeds.
Risks
Following are the key risks which can impact company’s performance:
a. Project has not been appraised by any financial institution.
b. There is risk related to purchase of second hand windmill machinery and no definitive agreement to do so have been entered so far by the company.
c. Company has not yet signed a Power Purchase Agreement with Karnataka State government.
d. Company is fighting various tax related cases.
e. Company enjoys various government incentives like Section 80-IA. If this is withdrawn, it can adversely impact the company performance.
Zylog Systems Limited
Zylog Systems Limited is entering Indian primary market with a Public issue of 3,600,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
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Zylog Systems Limited is a Chennai based IT services and products Company. Established in 1995 and business commencement in 1997, is a 100% EOU registered with STPI (Software Technology Parks of India). By its onsite offshore model, it provides IT services to its clients as per their requirements. Telecom, Banking Financial Service and Retail companies are prime contributors to its top line.? It has products like Z*Connect, Z*Prism, insured Vehicle Accident Recovery Systems (iVARs), Claim Management System, RTGS PayManager, VISTEM and WAP Page.
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Promoters
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The company is promoted by Mr. Sudarshan Venkartaman and Mr. Ramanujam Sesharathnam.
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Financials
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Zylog Systems Ltd. is a consistent profit making company. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 261.20 crores. The restated net profit for the same period was about Rs. 41 crores. For FY 2007, till Oct?2006, company had already clocked a turnover of Rs.209 crores and a net profit of Rs.30 crores. For both the above periods, corresponding Networth was Rs.104 and Rs. 135 crores respectively.
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Particulars of the Issue
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Zylog Systems Ltd. IPO is a fresh issue of 3,600,000 equity shares. After keeping aside 100,000 shares for its employees, the net issue for public is 3,500,000. The net Retail portion is upto 1,050,000 equity shares. Post IPO, the total outstanding equity will rise from 12,846,420 to 16,446,420 equity shares.
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Basis for Issue price
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Zylog Systems Ltd. claims that it has established a Global Delivery Model with office in USA, UK and Singapore. This set up has helped them do low cost delivery to clients. Further, it claims that is has ability to scale rapidly. It further banks on its quality delivery and long term client relationship to give it continuous business. For Fiscal 2006, it had an EPS (Earning per Share) of Rs.37.24. For the Seven months of FY 2007, the same stood at Rs.28.58.
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Objects of the Issue
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The primary purpose is expansion of current operations. Out of the total proceeds of the issue, about Rs.67 crores will be utilized for setting up 2 Offshore Delivery centers. A whopping Rs.81 crores will be kept aside for Working Capital requirements. The rest will be used for acquisitions and issue expenses.
Risks
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Following are the key risks which can impact company?s performance:
a. Zylog Systems Ltd. has 3 Direct Taxes and 2 Indirect Taxes litigations pending against it. The combined claim is about 4.40 crores.
b. Except for working capital requirements, rests of objects of issue have not been appraised by any independent appraiser.
c. Failure to get contracts can result in a huge bench of workforce which would translate in significant spending without any significant return.
d. Heavy dependency on US clients is a typical risk factor found in Indian IT companies.
e. Dollar weakness can impact company.
f. Chinese IT industry is a big potential threat.
The following table shows the upcoming IPO that have been covered under this section and their status. You can click on any of these to read more about them.
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Mundra Port and Special Economic Zone Limited
Mundra Port and Special Economic Zone Limited is entering Indian primary market with a Public issue of 40,250,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Mundra Port and Special Economic Zone Limited is the developer and operator of Mundra Port, located in Kutch district of Gujarat. Company has exclusive rights to develop and operate the same for 30 years. Company has also received rights to develop a multi-product SEZ at Mundra and its surrounding areas. The port is primarily engaged in providing bulk cargo services, container cargo, crude oil cargo and value-added port services, including railway services. Partial commercial operations commenced in Oct, 2001.
Promoters
The company is promoted by the famous Adani group. The group is engaged in commodities trading, power trading & generation, coal mining, real estate development, agro processing & logistics and shipping.
Financials
For the FY ended March 31, 2006, the company clocked a turnover of Rs. 397 crores. The restated net profit for the same period was about Rs. 75 crores. For FY 2007, till September’2006, company had already clocked a turnover of Rs.246 crores and a net profit of Rs.126 crores. For the six months ended 30th Sept, 2006, Company’s P/L statement, as in the Red Herring prospectus, shows Tax credit of Rs.38 crores. For FY 2005 and FY 2004, the top line was Rs.277 and Rs.173 crores approximately. The net profit for FY 2005 was Rs.70 crores. In FY 2004, company had a net loss of about Rs.10 crores.
Particulars of the Issue
Mundra Port and Special Economic Zone Ltd. IPO is a fresh 100% Book Building issue of 40,250,000 equity shares. After keeping aside 150,000 shares for its employees, the net issue for public is 40,100,000. The net Retail portion is a minimum of 30% of total equity shares. For retailers, full bid amount needs to be paid while bidding.
Basis for Issue price
Mundra Port and Special Economic Zone Ltd. claims that its strategic location serving the landlocked Northern India and North Western India will give it huge amount of business. Land with port back-up area and infrastructure will help future expansion and SEZ advantages are other basis for issue price. The adjusted EPS for FY 2006 stands at Rs.1.98. There are no listed companies in India which can be compared with Mundra Port and SEZ.
Objects of the Issue
The primary purpose is construction and development of basic infrastructure and allied facilities in the proposed Mundra SEZ. Construction of a south basin terminal for coal and other cargo at Mundra Port is the other objective of issue. Company also intends to fund group companies like Adani Petronet (Dahej) Port Pvt. Ltd; Adani Logistics Ltd; and Inland Container Pvt. Ltd.
Risks
Following are the key risks which can impact company’s performance:
a. Government’s volatile policies on SEZs remain the biggest risk.
b. Company heavily depends on concessions and licenses from government and quasi-government organizations.
c. Company has agreement with P&O Ports (Mundra) Pvt. Ltd. for container handling services. P&O Ports got acquired by Dubai Ports World. Hence, the agreement is reviewed again by Gujarat Maritime Board.
d. Many contracts with its customers contain provisions which if exercised by the customers can adversely affect the company.
e. Company relies on small number of customers for a large proportion of its revenues.
f. Company in the past has entered into related party transactions and will continue to do so in future.
g. Severe weather conditions can adversely impact its operations.
The following table shows the upcoming IPO that have been covered under this section and their status. You can click on any of these to read more about them.
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Rathi Bars Limited
Business of Rathi Bars Limited
Rathi Bars Limited, a member of the famous Rathi group, is presently involved in manufacturing steel bars. Steel bars are used in construction of huge structures such as Dams, Multi storied building, Bridges, Flyovers as a basic reinforcement material. There a variety of steel bars. Rathi Bars manufactures Cold Twisted Deformed (CTD) and Thermo mechanically Treated (TMT) bars. These two varieties fall in the Long products group of the steel bar industry. Ms-Ingot is the main raw material.
Promoters
The company is promoted by the Rathi family. The key promoters are Kamlesh Kumar Rathi, Anurag Rathi, Anupam Rathi and other Rathi family members.
Particulars of the Issue
The issue is for 71,42,857 equity shares of Rs.10 each for cash at a price of Rs.35 per share aggregating to Rs.25 crores. The issue will constitute about 44% of fully diluted post paid up equity capital.
Basis for Issue price
Company claims that it is a manufacturer with high demand in Northern India. Plus, it has superior technology and quality certifications. “Rathi” is a well established brand in the market. Earning Per Share (EPS) for FY 2005-06 was Rs.10.90. Eight months EPS for the current financial year is Rs.6.83. Industry average P/E multiple is 8.60. As per the company’s prospectus, Kamdhenu Ispat Limited, Rajpur Alloys Limited, Vardhaman Industries Ltd and Zenith Birla (all having P/E above 10) are its peer companies.
Objects of the Issue
Company’s products are popular in Northern states like Haryana, Rajasthan and HP. Primary motive of this issue is to fund its expansion products. Company also intends to start production and sale of steel billets. Out of the total issue proceeds, Rathi Bars Ltd. intends to spend about Rs.20 crore on plants and machinery. About Rs.11 crore will be for working capital. The issue expenses are Rs.2 crore.
Risks
Following are the key risks which can impact company’s performance:
a. There are 2 excise related and 16 sales tax (amounting to about Rs.9 crore) and one Service tax related cases pending against the company.
b. Objective of the issue has not been appraised by any independent agency.
c. Surprisingly, there are other companies in the Rathi group who are in the same line of business as Rathi Bars Ltd. Hence, there is competition within the group.
d. Certain statutory approvals are yet to be received.
e. Company has non-exclusive rights to use the brand name “Rathi”.
f. Steel industry is cyclical in nature.
g. Chinese steel industry is a big potential threat.
The following table shows the upcoming IPO that have been covered under this section and their status. You can click on any of these to read more about them.
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Page Industries Limited
Business of Page Industries Ltd.
The company was set up in 1995 to bring in the high end innerwear JOCKEY to the Indian market. While the promoters were associated with JOCKEY for the last 36 years as there sole licensees in the Philippines market with the opening up of the Indian markets in the early 1990s the promoters sought to fill a void in the Indian innerwear market by setting up shop in India and manufacturing, distributing and marketing JOCKEY products in the country. The company has been awarded “the best licensee of the year” for the year 2006 by JOCKEY and enjoys a relationship with the promoters which goes as back as 1959.
Strengths of Page Industries
While the market is being flooded with a host of IPOs following factors differentiate Page Industries with some of the other IPOs slated to enter the market:
- Long history which ensures that the promoters are not fly by night operators but rather experts in their chosen field of business having been successfully delivered for over 4 decades now.
- High product differentiation in terms of the brand loyalty enjoyed by JOCKEY which is a result of the existence of brand for over 130 years now.
- Integrated in house operations which ensure productivity and efficiency. Page Industries have eight adjacent factories in a single location which is engaged in everything that the company does right from cutting the fabric to packaging the finished product.
- The company exists in the retail and apparel segment which is expected to grow by leaps and bounds in the Indian market.
Financials
The company has grown steadily and at a decent rate in the last few years and the revenues have climbed up from Rs.377 million to Rs.1037 million from 2002 to the fiscal 2005, for the nine months ended 30.9.2006 the company clocked in revenues of Rs.741 million. The company also has a profitable record in the last few years and profits after tax have grown at a steady rate from Rs.17.56 million in 2002 to Rs.113.91 million in the last fiscal. The same is reflected in the EPS which for the last fiscal was Rs.467.75. On top of this the company also had a positive cash flow from operations in the last few years.
Objects of the Issue
Page Industries plans to raise funds for the following purposes:
1. Brand building
2. Expansion of garment manufacturing capacity in existing facility
3. Setting up of new garment manufacturing facility at Bommasandra, Bangalore
4. Expansion of elastic manufacturing facility
5. Expansion of Socks manufacturing facility
6. Corporate head office in the Central Business District
7. Implementation of new generation ERP software ( SAP)
8. Modernization of production process
9. General Corporate Purposes and
10. To meet the expenses of issue
Conclusion
In all one looks forward to this IPO with the hope that the company does not over price its issue and gives investors the chance to buy into this fairly stable and growing company at a decent issue price.
Puravankara Projects Limited
Business of Puravankara Projects Limited
Puruvankara is in the business of acquisition, development and marketing of real estate both residential and commercial properties. The promoters have over 31 years of experience in this field and the area of operations cover Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Colombo and the United Arab Emirates (“U.A.E”).
The promoter group company has so far completed 12 residential projects and 1 commercial project covering approximately 3.18 million sq. feet of Saleable area and currently is engaged in 12 residential project and one commercial project covering 10.02 million square feet of saleable area.
The company has also entered into a partnership with Keppel Investment Mauritius Ltd. And is currently engaged in developing a residential venture in Kolkata.
Risks that Puravankara Faces
There are litigations that amount to Rs. 150 million as on December 2006 which Puruvankara faces and in the case that some of these proceedings are decided against the company the bottomline will be impacted by that amount of money.
Apart from the above risk the real estate market in India is hotting up and this would lead to an increase in the prices of land and can further dent the profitability of the company.
Financials
The company has shown phenomenal growth in top line with profits growing from just Rs.169.75 million in 2002 to Rs.2804.22 million in 2006. Similarly the profits have also grown from just about Rs.17.6 million to Rs.766.36 million in the last year. The EPS for the last fiscal has been Rs.2.71 however the company may not be justified in charging a very high P/E because the growth has really exploded rather than one that has been steady and can be expected in the future years as well. The reason for this is as the numbers keep growing and the base keeps increasing it s simply not possible to grow at past rates.
Conclusion
The real estate market is hotting up and expanding and even though there have been a slew of players intensifying the competition there may still be room for everyone. The RBI in recent times has also shown concern and is of the view that the real estate market runs the risk of over heating and may place controls via interest rate manipulations which will dent investor confidence and ability to raise loans.
All in all at decent valuations this may be a good stock to hold in one’s portfolio.
House of Pearls Limited
Business of House of Pearls Limited
The company is a multinational engaged in the business of manufacturing, marketing, distribution an sourcing of ready to wear apparel. The company started off in 1987 with one facility in Gurgaon and since then has expanded with sourcing from China and Bangladesh, marketing and distribution in UK, US, Canada and Spain and manufacturing facilities in Bangladesh and Indonesia. The company has a production capacity of 20 million pieces per annum and some of its well known customers include JC Penny, TESCO, ASDA Walmart, The GAP, NEXT, ESPRIT and has a total of 60 customers. In addition to this it also has developed two in house brands by the name of DCC and Kool Hearts in the US. The company employs a total of 6496 employees of which 4193 are based out of India.
The big difference between other Indian apparel manufacturers and House of Pearls is the global nature of the company and the fact that it has spread out its operations in different parts of the world and maximizes the efficiency by doing what is done best in that particular country.
Financials
The company has seen steady growth in its revenues over the last few years and has clocked revenues of Rs 4.48 billion in the six months ended September 2006, compared to a total revenue of Rs. 1.69 billion in 2006, 1.29 billion in 2005 and 1.04 billion in 2004. However the profit situation of the company has not been as stable as the revenue situation because of some extra ordinary expenses like loss on sale of a sweater division in the year 2005. Apart from this the operating profits have been healthy and growing every year.
The company is issuing its shares at a price band of Rs. 525 to 600 and the IPO starts from January 16 and closes on January 23rd. The EPS for the company for the year ended March 31st 2006 comes out to be Rs.4.63 and clearly the issue is quite aggressively priced at Rs.525.
Conclusion
The market is at all time highs and the issue price is quite aggressively priced. In such a situation the risk of the investors also increase quite a bit when subscribing to an IPO of this nature. Another important point to note is that since the company has been involved in a fair bit of restructuring of which the full financial impact will come out only in 2007 and is not fully reflected in the books in the year 2006.