Cox & Kings - IPO is it a good bet?

With the recent IPOs not cheering up the investors, COX & KINGS are confident in getting into the market with their IPO. With the market being in an uptrend, would it give a thumbs up for the IPO? Let us see how the issue is, through an SWOT analysis.

Strength:

• 200+ years in the industry
• Presence in many countries around the world
• Well known in the industry

Weakness:

• Not having a good financial track record
• The recent performance is not good
• The collection period is very high
• IPO proceeds deployed for Working Capital, which may not give much return
• The PE and the price is too high, considering the performance
  

Opportunities:

• With the market getting matured, there are good opportunities
• More people are willing to travel abroad and take a holiday package
  

Threats:

• The market competition (KUONI, SOTC etc.,)
• The Airlines themselves giving schemes

Some facts on the issue:

Issue opens on : 18th Nov 2009 (today)
Issue closed on : 10th Nov 2009
Price range       : Rs.316 - Rs.330
IPO grading      : 4 (by CARE)

Given the performance, the poor working capital management, the IPO proceeds being used for Working Capital, mounting competition, I would suggest my friends to stay away from the issue. I don't see any capital appreciation in this stock.

Those who have risk appetite can invest in the stock!

Views solicited.

Cheers,

Gopal