Cox and Kings (India) Limited

by Manshu on March 8, 2008

in IPO/NFO

Business of Cox and Kings

Cox and Kings is a travel organization which is engaged in three main verticals of leisure travel, corporate travel and Forex. Cox and Kings is one of the oldest and most reputed names in the travel business and has evolved during a period of more than 250 years and has created a brand name across the globe.

Within Leisure the vertical is further sub divided into Inbound travel, Outbound travel and domestic travel.

The inbound travel enables tour operators from across the world on providing destination services for tourists travelling to Indian subcontinent. This involves providing ground tour management services like hotel booking, event planning, airline bookings, car, rail, private air charter and excursion planning, conference management etc.

The outbound and domestic segment includes packaged holidays in India and abroad. The holidays abroad are in the nature of holidays which are escorted tours as well as for free individual travelers.

The domestic holidays include pilgrimage tours, weekend breaks, activity holidays, spa holidays, budget holidays and the like. The other products under the domestic vertical target tourists that are coming to India or organizing conferences, meetings and exhibitions.

Cox and Kings also happens to be one of the leading forex dealers within the country and has also entered the business of providing travel insurance.

Financials of Cox and Kings

The total revenues for the year ended March 31 2007 was Rs.994.19 million up from Rs.657.53 million the year before. The profit after tax for the years ended 2005, 06 and 07 was Rs.92.29 million, Rs.173.45 million and Rs.210.52 million respectively.

The consolidated EPS for the year ended March 31, 2005, 2006 and 2007 is Rs.102.33, Rs.23.10 and Rs.54.75

Objects of the Issue

Cox and Kings plans to raise funds from the IPO for the purpose of capital expenditure within India which is estimated at Rs.1173.90 million. Apart from this a sum of Rs.1000 million has been earmarked for acquisitions, Rs.762 million earmarked for investments in overseas subsidiaries and branches and Rs.750 million would be used for repayment of debt.

The capital expenditure in India would involve consolidation of office properties in Mumbai and Delhi and having one office in each of these locations instead of the multiple offices that exist today for the purpose of better administrative control.

Right now there are 14 branches cum shops located within India and Cox and Kings plans to segregate the branches from the shops and then set up an additional 30 shops in various cities across India. The shops act as point of sale for retail customers.

Cox and Kings already has subsidiaries in Dubai, UK, Japan, and Singapore. The company plans to set up a new subsidiary in Malaysia. The sum earmarked for investments would be utilized in these subsidiaries and setting up of the Malaysian subsidiary. In addition to this a sum of Rs.51 million would be spent in the subsidiary in USA.

Conclusion

The IPO of Cox and Kings is one of the few ones which is backed by solid fundamentals and a reputed global company. Right now the pricing for the IPO has not been decided but if the company prices its IPO reasonably then it would be one that the long term investor should certainly consider.

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