MBL Infrastructures Ltd - AVOID
Friday, November 27, 2009
MBL Infrastructure Ltd (MBL) is engaged primarily in construction and maintenance of roads and highways.
MBL has a strong order book of Rs 815 crore (including order inflow of Rs 203 crore post June), which is at 1.6x FY09 revenues. This provides revenue visibility over the next 1.5-2 years. However, the current order book to FY09 revenues ratio is relatively lower than its peers.
MBL has successfully completed the execution of the BOT project of the 114 km Seoni-Balaghat-Rajegaon state highway under the PPP mode. According to the management, this BOT asset generates monthly toll collections of Rs 70 lakh
Financials:
MBL's revenues grew at a CAGR of 37.7% during FY05-FY09. The revenues from the construction and project related activities grew 38.6% while waste management and trading activities revenues grew 35.7%.
MBL is available at 9.5x the upper band of its FY09 EPS. Considering the lower revenue visibility compared to its peers and MBL valuation, we believe the risk-reward ratio for MBL is unfavourable and hence AVOID the IPO.
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Published by DalalStreet Business @ 11:58 AM IST.
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Allotment of Astec Life Sciences IPO
Thursday, November 19, 2009
The Basis of Allotment of Astec Life sciences IPO is now available here. The IPO was oversubscribed and hence partial allotment has been done to all applicants. You can check the status of your application here.We did not cover the IPO and hence have no recommendation on the same.
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Published by DalalStreet Business @ 2:24 PM IST.
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Cox & Kings - Add Leisure to Portfolio - Subscribe
Saturday, November 14, 2009
Cox & Kings (India) is amongst the oldest travel brands [is also a Global Brand] in the country offering travel (both leisure & business), forex and visa processing services. The company acts as a One Stop Shop for all the travel related needs of Indian and international travelers.In India, tourism as a % of GDP accounted for just 6% in 2008, as compared to about 9% for the world. Thus the domestic and inbound market offers a vast scope for all the operators to expand revenues.
Cox & Kings Current IPO Details:
Face value 10
Price band 316-330
Issue opens November 18, 2009
Issue closes November 20, 2009
Retail Size - 6,403,824 Shares or Rs 211 cr
Fully Diluted Equity after the IPO - 62.92 cr or 6.29 cr equity shares of FV 10
Financial Performance:
C&K reported revenue CAGR of 65.5% over FY06-09 period while OPM was in the 40%-42% range over the same period. PAT witnessed 80% CAGR over FY06-09. Excellent Performance, we should say.
Advantage Cox & Kings:
Apart from India, C&K has a presence in 19 countries through a mixture of
subsidiaries, branch and representative offices.
Higher business volumes would provide the company a better bargaining power to make bulk bookings for air travel, hotel accommodations, car rentals and ground handling
Risks:
Foreign Currency Fluctuations and some competition from other players from the un-organized sector are the key risks.
Cox & Kings Versus Thomas Cook:
Thomas Cook another listed company in the same line of business is directly comparable. Sales of both the companies are almost the same. Thomas Cook is expected to report an EPS of Rs 1.4 to 1.6 for year ending Dec-2009 and is quoting at a P/E of 40.
Cox & Kings, even if it reports a PAT of 63 cr as reported in FY09 [Conservatively], its EPS after full equity dilution will be Rs 10. At a P/E of 33, the management has definitely left something on the table for INVESTORS. However, the company in our view will definitely earn more in FY10.
Since Thomas Cook sales has been growing at a far slower pace than Cox & Kings, its is highly likely that Cox & Kings will enjoy higher discounting 3 to 6 months after the IPO when FIIs would have cornered their chunk of shares :-)
Labels: cox-kings-Vs-Thomas-cook
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Published by DalalStreet Business @ 11:59 AM IST.
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SEBI Must Not amend Rules for Anchor Investors
Wednesday, November 11, 2009
Going by the recent dull listings of IPO on the Street, Anchor Investors [Mostly, FIIs] are back at the doors of SEBI begging to relax rules for Anchor Investors.
Unlike pre-placement which may have lockin period of 12 months, Anchor Investors have just lock-in period of 30 days. They pay 25% upfront and the remaining 75% upon the closure of the IPO. However, they have come in as long term investors and are expected not to SELL the shares on the day of listing or atleast for the first 30 days.
Now why do they want relaxation on 30 days lockin ? It is the abnormal pricing that has led to destruction of Anchor Investors wealth. In any case, as an Anchor Investor why should you be bothered as you are BUYING the Long Term Growth Story of SHELL companies like IndiaBulls Power or Pipavav Shipyard ?
The Goal of these Anchor Investors is very clear - Make Short Term Money. If SEBI is an entity of integrity, then they should increase the lockin period for any kind of pre-placement IPOs to 12 months.
We Strictly Warn the Board of SEBI that any relaxation of rules for Anchor Investors will be challenged and the Finance Minsitsry shall not be spared as well.
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Published by DalalStreet Business @ 1:48 PM IST.
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