IndiaBulls Power IPO - Analysis & Vote for the listing price

Indiabulls Power's IPO was subscribed 5 times, as the issue opened on 12th Oct 2009 (today). The issue details are as follows:

No of Equity Shares                                    39.07 crore
Value of each share                                    Rs.10
Price offered (band)                                    Rs.40 to Rs.45
Minimum lot                                                150 shares
Further lot in multiples of                           150 shares
Issue Closes on                                         15-Oct-09

With the recent power issues (Adani & NHPC) quoting below or near the issue price, I do not think that the retail investors would be interested in this issue.

My concerns:
  • The price of Rs.40 (the lower band) is itself high
  • Adani & NHPC available at good valuations in the secondary market
  • The promoters have no experience in mega Power projects
  • No operating history, as the company is just 2 years old
  • Long gestation period for the 5 projects, though some are in the advance stages
If at all there are any positive in this IPO, they are:
  • Listing gains (if the market maintains it momentum) of about 3%
  • The promoters have access to capital market (Indiabulls Securities) and can sustain the price above the issue price.
Here are 2 questions:
  1. What would be the issue price?
  2. At what price the stock would be listed?
I have created a poll on the right hand top of this blog page. You can vote and let us see where we are in terms of understanding the market?



Ganesan on Oct 13, 2009, 8:14:00 AM said...

Gopal, who is the market - India Bulls and brokers of its ilk. Wait and see at what price it gets listed. If it can pull it off (listing) before Diwali, some of them are making a big kill and leave a lot or retail investors licking their wounds for months to come!

Gopal on Oct 13, 2009, 11:12:00 AM said...

Yes Sir, that is the only hope for the investors for a listing gain, if at all it can get a decent premium on listing and exit. I think for long term, we can get it in the open market at a reasonable lower rate.
Cheers, Gpoal

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