Pipavav Shipyard came with an IPO which was open between Sep 16 and Sep 18, 2009. The price band was fixed between Rs.55 - Rs.60. Finally, the price was fixed at Rs.58 (may be knowing that it cannot sustain Rs.60 in the market).
The issue was subscribed about 9 times and the company raised about Rs.500 crores by way of this IPO.
Why this IPO? Pipavav plans to fund the IPO funds for their expansion plan - Constructing new facility for their shipbuilding, repairing of ships and offshore businesses.
If you compare it with the near competing shipyard like ABG Shipyard and Bharati Shipyard, this price is really high.
<------------- on 9-Oct-09------------------>
Price PBV EPS PE
ABG Shipyard 213 1.29 33.92 6.28Bharati Shipyard 191 0.75 48.08 3.96
Piapavav Shipyard 57 14.65 0.08 712
(source: Moneycontrol.com & Pipavav's RHP)
For a copy of the 510 page Red Herring Prospectus, Click HERE
It is very clear that the price is fixed at a very high level, taking into consideration of the future businesses. The market players are very much educated and they are taking good calls on the prices.
Let us see how the share performed during the first day of listing (i.e 9th October 2009)
NSE BSE
Opened at 61.10 (5.34%) 60.05 (3.53%)
High Price 61.10 64.70
Low price 53.85 53.85
Close price 56.70 (-2.24%) 56.80 (-2.07%)
Given the fact that all the current IPOs are trading below or around their issue price, it is advisable to wait for listing and take a call on investment for long term, instead of applying and worrying.
Cheers,
Gopal
1 comments:
It is ridiculous. People are taking the investors for a ride.
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