Category: India IPO Reviews and Updates

You can now check the status of your application of Meghmani Organics Limited IPO here. Good Luck for your listing gains.

For long term retail individual investors who are willing to hold the stock, here is how you can bid for the ICICI Bank Follow On Public Offering.

Payment option I (Part payment)

• Retail bidders: Rs. 250 per Equity Share on application. Rs. 250 on allotment and the balance on call to be made within six months of allotment.
• The retail client can maximum bid for 114 x Rs. 885 = 1,00,890 wherein he will have to pay 114 x Rs. 250 = 28,500/-.
• At lower side, client can bid for 108 x Rs. 950 = 1,02,600 wherein he will have to pay 108 x Rs. 250 = 27,000/-

In case a client applies for first bid of 114 shares and second bid for 108 shares cheque amount would be for 114 x 250 = 28,500 i.e the maximum no of shares x Rs 250.

Payment option II (Full payment)

• Retail customer can bid for maximum 114 shares at bid amount of Rs. 885/- (lower price band), whereby bid value which will go in Exchange will be Rs. 1,00,890/- (114 x 885) and bank account will be debited for Rs. 95,190/- (114 x 835) [Rs 835 after considering discount of Rs. 50].
• Further, retail client can bid for 108 shares at bid amount of Rs. 950/- (upper price band) whereby bid value which will go in Exchange will be Rs. 1,02,600/- (108 x 950) and bank account will be debited for Rs. 97,200/- (108 x 900) [Rs 900 after considering discount of Rs. 50].

ICICI creates confusion on bidding process and we have to clarify it for our readers.

ICICI Bank is diluting its equity yet again with a follow on Public Offer. They are also playing a gimmick of partly paid up shares for Individual Retail investors at Rs 250 on application and Rs 250 on allotment. The partly paid up stock will also be listed separately for trading.

The IPO Price band for fully paid up share is priced between Rs 885 and Rs 950 per share. The bank has given retail investors the second option of paying the full bid amount minus the discount at the time of application. So even if you end up bidding for 100 shares at Rs 900, it is the near ICICI Bank’s Friday’s closing price of Rs 908.

With such a large equity dilution, short term retail investors may get the stock lower than the IPO price. With markets in correction mode, it is better to AVOID the FPO of ICICI Bank and look for opportunities in the secondary market or look for very small gains through this Follow on Public Offer.

Their is another way to play this IPO – Buy ICICI Bank Put Option or go Short in Futures and Bid for the stock in FPO. So in either case of the stock movement, you can make some money.

The DLF IPO managed to subscribe 3.47 times with most of the demand coming from Institutional Investors. High Networth Individuals and Retail investors participation was very very low. Here are the final figures that National abd Mumbai Stock exchange compiled and sent to us in a fax message.

All retail investors will be allotted in FULL. Good Luck for your Listing Gains (if any).

The IPO of Vishal Retail for which we had a Blind Subscribe recommendation is oversubscribed by 69 times according to NSE Release. Here are the final subscription figures.

The figures given by CNBC TV 18 MoneyControl are saying that the issue is subscribed 82 times is WRONG. Issue is oversubscribed by just 69.08 times. Don’t TRUST MoneyControl, they are Misleading Investors.

As we had already predicted, the fate of all applications will be decided by Lottery. Good Luck for your allotment. Grey Market Premium is very high Rs150+.

DLF India – Building India by looting Small Retail Indian Investors IPO is now open for subscription. We at Dalal Street Business, after a careful review put an AVOID Recommendation for DLF IPO.

Kindly Read the Indian Real Estate Stocks and Sector Research reports here.

Sure DLF is a big company backed by few Congressmen in the corridors of New Delhi. However, the issue pricing is expensive. Fair Value of its Land Bank is between Rs 375 to Rs 425.

Financials of DLF:
The company has reported fairly flat topline between 2002 and 2005 at around Rs 550 crore. For the year ending March-31st 2006, the company reported a 100% rise in topline to Rs 1,242 crore and for the following year it reported Rs 4,034 crore. Out of this Rs 4,034 crore, the company has other income component of Rs 1,416 crore which is the value of property sold to promoters group company – A Shady Deal.

DLF reported a net profit of Rs 1,941 crore for year ended March,2007.

The debt-equity ratio as on March 31, 2007 was 2.5:1. It paid interest of Rs.789.6 cr in FY07 on loans of Rs.9,932 cr (incl floating interest loans of Rs.7,489 cr). Any extended slowdown in the real estate industry will hit DLF badly due to its debt servicing obligations. This combined with the fact that DLF had large negative operating cash flows in FY06 and FY07 (Rs.949 and Rs.5831 cr respectively) could impair its capacity to raise large debts on a continuing basis.

IPO Offer:
Fully Diluted Equity after IPO: 170.48 crore shares of Rs 2.0 each
IPO Offer: Price band of Rs 500 to Rs 550 amounting to Rs 8,750 to Rs 9,625 crore

Why should You Avoid the Issue ?

• DLF is mainly banking for the IPO to sail through on the value of its Land Bank. Cash Flow has been negative as indicated above. Approximately 60% of its DLF’s reserves comprise land for which DLF have not yet obtained a certificate for change of land use.
• More than 50% of the land reserves is concentrated in NCR, mainly in and around Gurgaon and another 23% is in Kolkata (incl Dankuni project). With very little jobs being created in those Areas, DLF is under increasing threat from oversupply.
• Shady Deals: DLF has 112 related parties including subsidiaries and associates and substantial inter-company transactions.
• In anticipation of DLF issue, another comparable stock Unitech made an all time high of Rs 601 on May-29th where it saw substantial delivery based SELLING and the stock currently trades at Rs 490 levels.

Grey Market: It is very unfortunate that a Grey Market which is completely illegal exists for IPOs in India. We advise caution to all our Retail Investors not to go by rumors and get trapped, really especialyl for DLF IPO.

Post-Listing Strategy:
At Rs 550 the issue is really really expensive and you can avoid this. Long Term investors can pick the stock around Rs 425 levels.