L&T Infotech Ltd IPO review

Low valuations, but lower growth too

Incorporated in 1996, Larsen & Toubro Infotech, a subsidiary of Larsen & Toubro Ltd is Mumbai, India based IT Solutions & Services Company.

L&T Infotech is ranked 6th largest IT company in India in terms of export revenues and among top 20 IT service provider in the world. The services offered by L&T Infotech includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions.

Issue Details :

Issue Opens On: Monday July 11th, 2016

Issue Closes On: Wednesday July 14th, 2016

Issue Type:100% Book Building

Issue Price Band: Rs.705–Rs.710 per share

Discount: Rs.10 to Retail Category Only

Face Value Per Share: Rs.1

Minimum Bid Lot: 20 Equity Shares and in multiples of 20 equity shares thereafter

Minimum Order Value: Rs.13,900 to Rs.14,000 (after discount)

Issue Size: Rs.1,225 crore

Proposed Listing: Bombay Stock Exchange and National Stock Exchange

Lead Managers: Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited and ICICI Securities Limited

Registrar: Link Intime India Private Limited

Objects

The public offering is purely an offer for sale with the parent firm Larsen and Toubro Ltd looking to divest about 10.3% of its stake in the company.

The company is offering a special discount of Rs. 10 per share to retail investors.

Financial

On performance front, the company has (on a consolidated basis) posted turnover of Rs. 3873.54 cr., Rs. 4837.18 cr., Rs. 5069.54 cr. and Rs. 6143.02 cr. and net profits of Rs. 561.61 cr., Rs. 996.41 cr., Rs. 768.53 cr. and Rs. 922.18 cr. for the fiscal 2013, 2014, 2015 and 2016 respectively. For the fiscal 2014 it has other one time income of Rs. 300.24 cr.

Latest earnings shows EPS of Rs. 54.30 and thus asking price is at a P/E of around 12 plus that augurs well as industry composite P/E is around 19. Thus offer price appears to be reasonable. Management is confident of doubling its revenue in next three years.

LT

In terms of geographies covered, L&T Infotech derives the largest chunk of its revenue from North America at 69.4% followed by Europe at 17.2%. Asia Pacific accounts for only 2.2% while the remaining 6.2% of the revenue is contributed by rest of the world.

Post the restructuring of its engineering business which the parent hived off into a separate company, L&T Infotech has employee strength of 21,073. Around 52.5% of these employees are working onsite while 47.5% have offsite assignments.

L&T Infotech is India’s Sixth largest IT services firm by revenue draws majority of its revenue from Banking, Financial Services and Insurance (BFSI, 47percent – 26.3 percent BFS, 20.7 percent insurance), followed by energy & process (12.7 percent), CPG, retail & pharma (9.3 percent), automotive and aerospace (6.8 percent), media & entertainment (6.2 percent) and hi-tech & consumer electronics (5.2 percent). Digital services accounted for 11.1 percent of revenue in FY16.

Positive

NASSCOM has ranked L&T Infotech as sixth largest company in India in terms of export revenue. Company has accounted more than 68% of its revenue through the North America which is one of the biggest importers of Indian IT services

Strong revenue growth of 20% CAGR in last 5 years.

Good profit over 15% in last couple of years.

Extensive portfolio of IT services and solutions

Strong management culture, focus on emerging technologies

Company has been working to expand its operations in new geographical areas including Australia, Singapore, Japan, South Africa, India, Germany, France, Nordic region and the Middle East.

L&T Infotech is a part of one of the biggest diversified industry in India. Being a part of L&T Group whose business ranges from hydrocarbons, aerospace, automotive, heavy engineering and oil and gases etc. company gets benefited from insight experience of the businesses that operates in these verticals.

Negative

There are outstanding criminal proceedings pending against the company, its promoters and one of its directors.

Company revenues are highly dependent on clients primarily located in North America and Europe.

Since most of the company’s revenue comes from export, company is exposed to exchange rate fluctuations which could negatively impact our business, financial condition and results of operations.

L&T Infotech will not be enjoying the proceeds of the present issue as this being an offer for sale, the entire sale amount of around Rs 1,200 crore will go the parent L&T.

Exchange rate fluctuations in various currencies.

Restrictive immigration reforms in the US may have a substantial impact on business model and practices.

Concentration risk: Largest client alone contributed 14.9 per cent of firm’s revenue in FY16.

Valuations

Low valuations, but lower growth too

Current Market premium @ Rs. 62/- to Rs.67/-

L&T Infotech Comparison With Peers

Tata Consultancy Services Limited ( TCS ) per share  FV 1,  EPS 123.15 , PE 19.94x

Infosys  per share  FV 5,  EPS 58.73 , PE 19.96x

Wipro  per share  FV 2,  EPS 35.99 , PE 15.73x

HCL Technologies per share  FV 5,  EPS 43.74 , PE 16.41x

Tech Mahindra per share  FV 5,  EPS 32.12 , PE 15.83x

Hexaware Technologies   per share  FV 5,  EPS 13.06 , PE 17.21x

Mindtree per share  FV 5,  EPS 35.95 , PE 18.48x

L & T  Infotech Limited  per share  FV 1,  EPS 56.13 , PE 12.6x

Industry P/E ratio: Average: 19.35x

Conclusion : Reasonable pricing makes this IPO a worthy bet for medium to long term. ( MARKET PREMIUM IS 62-67 ONLY )

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here

Mahanagar Gas IPO review

Incorporated in May 1995, Mahanagar Gas Limited (MGL) is an equal stake joint venture between Indian gas transmission player GAIL and British Gas (BG Group) plc. Both parties hold 45% stake each while the government of Maharashtra holds 10% ownership. Since BG Group has been taken over by Royal Dutch Shell, the latter now has the ultimate ownership of the stake BGAPH (BG Asia-Pacific Holdings Pte. Limited) owns in Mahanagar Gas.

MGL is presently the sole authorized distributor of compressed natural gas (CNG) and piped natural gas (PNG) in Mumbai, its adjoining areas and the Raigad district in Maharashtra. Mahanagar Gas’ monopoly in the distribution business is valid until 2020 for Mumbai, until 2030 for the Adjoining Areas and until 2040 for the Raigad district. Furthermore, this exclusivity is extendable in blocks of 10 years as per the government regulations.

Issue Detail :

Issue Open: Jun 21, 2016 – Jun 23, 2016
Issue Type: Book Built Issue IPO
Issue Size: Rs.939 crores on lower price band
Face Value: Rs 10 Per Equity Share

Minimum Investment: Rs.14735/- on higher price band
Issue Price: Rs. 380 – Rs. 421 Per Equity Share
Market Lot: 35 Shares
Minimum Order Quantity: 35 Shares
Listing At: BSE/NSE

Lead Mangers: Kotak Mahindra capital and Citi group group global markets

Promoters :

GAIL (India) Limited; and

BG Asia Pacific Holdings Pte. Limited

Objects of the Issue:

To achieve the benefits of listing the Equity Shares on the Stock Exchanges.

MAHANAGAR GAS LTD.

Company Financials:

The company posted profit of Rs.225.5 crores for the year ended Mar-11 and profit of Rs. 301 crores for the year ended Mar-2015.

The company generated revenue of Rs. 1073.56 crores for the year ended Mar-11 and Rs.2135.63 crores for the year ended Mar-15.

For last three fiscals it has been posted an average EPS of Rs. 34.05 (basic) and Rs. 30.89 (diluted). Thus the asking price is at a P/E of 12.3 on the equity as on 31.03.16 and if we consider current equity with FY 16 earnings, then the asking price is at a P/E of 13.4 plus which is justified compared to composite industry P/E of 30 plus. Peers have the lowest P/E of 17 and the highest P/E of 44 as stated in RHP.

Both the promoters i.e. GAIL and BG Asia are selling equal quantity of 12347250 shares to dilute around 25% of the post issue paid up equity capital. With this IPO the company is trying to mobilize Rs. 938.39 cr. / 1,039.64 cr. based on the lower and upper price band. BRLM to the offer are Citigroup Global Markets India Pvt Ltd and Kotak Mahindra Capital Company Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE and NSE.

Ujjivan Financial Services IPO review

Positive

The Company is in virtual monopolistic business with steady growth and bright prospects ahead.

Good profits of over 14% in FY15

Strong financial performance with consistent growth and profitability

Well positioned in Mumbai metro.

Cost effective availability of domestic natural Gas.

Promoters with strong national and multinational experience.

Infrastructure exclusively and established infrastructure network.

Negative

The majority of its total revenue is attributable to its CNG business. Any  decrease in volume of CNG sold by them may have an adverse effect on its buisness,financial condition and cash flows.

If alternative fuels become more cost effective, or a fuel of choice to its customers, its business result of operations and cash flows and could be adversely affected.

Any increase in the cost price of natural gas or any reduction in the allocation amount of natural gas may have an adverse effect on its business, result of operation and cash flows.

The price of domestic natural Gas and RLNG (Regasified Liquefied Natural Gas ) We purchase is denominated in U.S Dollars,while the selling price is in Indian Rupees.

Thyrocare Technologies IPO review

Conclusion:

Mahanagar Gas commands 30% premium in grey market ( i.e. Rs.129/- )

Grey market operators are offering investors up to Rs 550 per share of Mahangar Gas, compared to its price band of Rs 380 to Rs 421.

It offers IPO at a justified pricing and thus is worth considering for medium to long term rewards.

DISCLAIMER:

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

 

Invest in your Child’s Dreams: Best Investments for your Child’s Education

College tuition and associated education costs rise 10-15% annually. If you have young children, the price you’ll pay for their education could be significantly higher than today’s prices. Currently, a Domestic 2 Year Full-Time MBA costs roughly ₹12-16 lacs, In 5 years, the cost is likely to touch ₹20-25 lacs.

The percentage of people getting a post graduate degree is merely 12% versus graduate degree of 72%, which is much lower for individuals who grew up in a low income household than individuals who grew up in non-low income household. These means only a lucky child can get an opportunity of getting higher education.

Due to increased Inflation, Competition & Lifestyle Inflation affecting the cost of children’s education there is a rise in demand for both the parents to work and earn such living. All the families are under increasing strain and disadvantaged families are strained to limits as they have fewer resources to invest in early development. The without resources like “parent coaching” in the busy life attract private coaching costs nearly ₹70,000-₹1, 00,000 p.a in addition to the academic costs.

Despite this cost escalation, you’ll want your children to have the option to go to the college of their choice. So how do you save enough money for college and still achieve your other goals?

LONG TERM AVERAGING OF EQUITY SIP’S IS RAPIDLY BUILDING WEALTH

Be an Early Bird

Starting savings early will not only be able to amass a larger sum, but the money will also gain from the power of compounding. E.g., Suresh Gupta, A Delhi based finance professional having a child aged 8 months started investing in an SIP of ₹ 9,000 for duration plan of 18 years in an equity fund that gives 15 per cent return for getting a target corpus of ₹1 cr. For such individuals like Suresh, Equity based Mutual Funds are more preferred than opting for balanced MF’s. If you have a higher risk appetite than your equity investment can be as high as 75% and rest in Fixed Deposits, PPF, Tax Free Bonds etc.

Play it safe in the Short Term:

If you have a short time horizon(<5years) you will have to opt for safer investments which means being risk averse. These investments include recurring deposits, debt investments, PPF etc. Though these investments offer guarantee returns with safety of capital but also provide less returns. E.g., Vimal Singh, A Mumbai based Salaried person having a child aged 15 years have to invest more than ₹50,000 in SIP for the period of 2-3 years to fulfill his child aspiration of studying for a MBA Course costing ₹20-25 lacs. A mid-incomed person cannot afford to put ₹50,000/month aside & ignore his household costs. Hence, the child has to either quit studying for post-graduation or has to take assistance from bank in the form of an educational loan.

Exploring investment Options for your child :

Exploring investment Options for your child

More than 4 lakh Pune flat buyers are victims of the builders

Investing in future child education is also gaining popularity these days. The plan can be established with one of the parents as the beneficiary and then transferred to the child after birth. These leads to more saving and longer time duration to appreciate. A couple married for 6 years before their first child is born has 33% longer time for their investments to appreciate. Otherwise, the parents can invest in Equity Mutual Funds which have delivered averaged annualized returns of 16.5% as compared to investing in traditional life insurance policies which offer low yields of 5-6%. 

Reviewing your performance of the funds in the portfolio is as important as Investing. An underperformance of fund can be rebalanced by replacing with a performing fund.

Example of Different Types Of Investments:

The investment of ₹2000/month for a period of 18 years in an traditional policy can grow till ₹7lacs with return of 5 to 6%, in a recurring deposit till ₹11 lacs with return of 9%, in a balanced fund till ₹15 lacs with return of 12% and in an Equity Fund at ₹22 lacs with return of 15%

Keeping in mind that financial plans are made to achieve such crucial goals in life. Hence the earlier you invest in your child education and the more systemized your financial plan is, the lesser financial burden you/child face in the long term.

“A child educated only at school is an uneducated child” – George Santayana

LONG TERM AVERAGING OF EQUITY SIP’S IS RAPIDLY BUILDING WEALTH

Only 3% of the total Market Capitalisation in India is held through Equity Mutual Funds, whereas direct holding of stocks by individuals is nearly 22% of the market (7 times more); contrary to the developed markets where retail investors tend to hold the stock through Mutual Funds.

People usually prefer to invest in both Equity and Debt (Balanced) Schemes due to high volatility in the stocks but such volatility erodes when investing in long term. Equities are a great compounding factor and with government encouraging more entrepreneurs, the Indian Economy is surely in a booming stage which will further attract more investments.

India’s Equity Mutual Fund Investors who have kept there Systematic Investment Plans (SIP’s) for more than two decades, with mere monthly investment of ₹2000 are worth millionaires now.

For Example, if an investor who has invested ₹2000/month in SIP for last two decades, these scheme would have peaked the actual investment value from ₹ 4,90,000 to the current valuation of ₹ 97,71,152 i.e., 20 times the actual value over 20 years.

Worst Retirement Mistakes and Remedies to improve them

Some of these schemes include Franklin India Prima, Franklin India Prima Plus, and Franklin India Blue chip from Franklin Templeton Asset Management Company (AMC); HDFC Capital Builder and HDFC Equity from HDFC AMC; Reliance Growth and Reliance Vision from Reliance Mutual Fund; and ICICI Prudential Multicap Fund from ICICI Prudential AMC. All these are 20-year-plus funds and have made handsome annualised returns of as high as 23 per cent for investors.

The below is a quick recap of how these schemes have developed & performed in the past two decades :

20 Years of creating wealth

Why buying Mutual funds is smarter way of investing rather than trading in stocks?

  • One of the main benefit a Mutual Fund provides is that you don’t have to pick stocks, track them, make sector and asset allocation. Because buying and selling stocks are best done by a professional fund manager. For example, a 60 year old company’s stock might not exist and maybe your father/uncle must have forgotten to track that stock. Therefore, in such situation a Mutual Fund saves the investors dragged portfolio returns by replacing it with new performing stock.

Critical Illness treatments now in Installment/EMI form will be a mode of relief

  • Short Term Capital Gains Tax is ignored when the Fund Manager is conducting the buy and sell of equities within a year in Mutual Funds while the same is applicable when purchasing and selling stocks over the stock market.
  • Diversification of Portfolio with investment of few thousands of rupees which will reduce the volatility of high risk stocks and will add convenience to the customer.
  • The need to make the market irrelevant as investing in regular frequency with both high and low points of the market will average the cost of investment.

Therefore to escape from periodic evaluation, rebalancing while achieving higher returns, Mutual Funds add as a secret ingredient to your investments.

More than 4 lakh Pune flat buyers are victims of the builders

Dream homes turn a nightmare for flat buyers in Pune

 

A simple analysis of the figures shows that complaints related to the real estate sector constitute almost 80 per cent of the complaints filed both with the state and the National DCGRF in the country.

RITESH Jain (name changed on request) had booked a 2BHK flat in an ongoing project of a prominent builder in Kharadi in 2014. Two years later, he is yet to get possession of his flat. “The agreement that I had signed with the builder had said I would get possession by the end of 2015. The builder keeps on assuring me that I will get the flat soon, but that soon seems to be far away,” he says.

Jain, who is paying a hefty house rent, is now thinking of taking legal measures against the builder.

Jain’s predicament reflects the situation faced by lakhs of people in the city who are made to run from pillar to post to get possession of their promised flats despite making payments on time.

Housing bubble in pune
80% of complaints with consumer forum relate to real estate sector

Source : Indian express

Consider this: in the last six years, the Pune District Consumer Grievance Redressal Forum (DCGRF) saw 2,943 cases being filed, of which 1,815 related to the housing sector. This year, of the 306 cases filed with the forum so far, 242 related to the housing sector.

Read also

Worst Retirement Mistakes and Remedies to improve them

While Pune’s real estate market is known for positive growth bucking the countrywide trend, problems, especially from the consumer side, have also seen a quantum jump. Delay in giving possession of tenements, failure to provide amenities and preventing formation of residents’ welfare society are some of the common complaints from consumers.

The figures from the consumer forum, activists say, do not even represent one per cent of the whole problem. Vijay Sagar, member of the All India Grahak Panchayat, a consumer rights body, says that in Pune alone, there are more than 4,000 housing projects affecting more than the 4 lakh flat buyers. “As per the development control rules of the Pune Municipal Corporation (PMC), each flat can house five persons. So more than 20 lakh people are affected in such cases,” he says.

Read more at

Dream homes turn a nightmare for flat buyers in Pune

 

War against the Builder’s Mafia raaj in Pune

A few days ago, in the press conference, Mr. Vijay Sagar, Mr. Vilas Lele & Ms. Seema Bhakare of Akhil Bharatiya Grahak Panchayat Pune published first list of 41 projects which have looted, cheated & exploited around 15,000 flat buyers and declared war on builder mafia raaj in Pune.

Grahak Panchayat gave to the press the copy of an ultimatum letter sent to Chief Minister of Maharashtra Shri Devendra Fadnavis.

Along with andolan, Grahak Panchayat also announced that Public Interest Litigation (PIL) will be lodged against the State Government, local bureaucrats & Pune police for non performance of duties.

Here is the first list of projects in which the nexus of builders, bureaucrats, police & politicians have exploited Pune flat buyers.
  •  Lodha Belmondo Gahunje – Sahajanand Hi Tech Construction Pvt. Ltd / Palava Dwellers Pvt Ltd

A) Approx Rs. 50 Lakh Each

B) No possession without paying escalated property price.

C) It seems that the builder has cancelled some agreements & resold the flats.

  • KUL Ecoloch Phase 2 Mahalunge – KUL Kumar Builders:
    A) 750 Flats – Approx Rs. 14 – 25 Lakh EachB) Construction stalled for years.C) Infrastructure charges Rs. 2.5 Lakh collected from each flat buyer
  • Misty Trails Hadapsar – Bhujbal Brothers Construction Company

A) 178 Flats: Approx Rs. 40 Lakhs Each

B) Construction stalled for years. Bank has attached the project. No action on FIR.

  • Forest Mist Hadapsar – Bhujbal Brothers Construction Company:
    A) 80 Flats – Approx Rs. 40 Lakhs Each

B) Construction stalled for years.

buiders scam

 Valay Hadapsar – Bhujbal Brothers Construction Company:
A) 20 Flats – Approx Rs. 40 Lakhs EachB) Possession delayed by 2 years. Construction stalled for years.C) Electricity meter 1,50,000 + Development charges Rs. 2 Lakhs collected from each flat buyer.

  • Aura City Shikrapur – Jalan Maple Developers:
    A) 1000 Flats – Rs. 14 – 25 Lakhs EachB) Incomplete project. Construction stalled. Possession of a few flats given. No completion certificate. No basic facilities provided. Ongoing legal cases.

Trishul buider scam

  •  Shalini Lake View Undri – Trishul Builders:

A) 500 Flats: Rs. 8 – 10 Lakhs Each.

B) In 2010 the building was demolished as it was constructed on reserved government land.

C) Money was collected from more than 500 flat buyers. Money not refunded. Hundreds of legal cases ongoing. No action on FRI lodged in 2011.

  • Bharatiya Jan Ghar Yojana 2015 – India Housing Day 2015 – Aapla Ghar – Maple Shelters:
    A) 15 projects – Rs. 11 – 18 Lakhs per flatB) Booking amount collected Rs. 1 – 3 Lakhs. No flat agreements.
    • Neo City Wagholi – Maple Shelters & Jalan Group:
      A) 1200 flats – Approx Rs. 26 Lakhs EachB) Incomplete construction. Delayed possession.C) Electric meter – Rs. 25,000. Infrastructure charges – Rs. 1.5 Lakh. Parking Rs. 1.5 Lakh. Society formation Rs. 5,000. Collected from each flat buyer.

Marathi article

  • KUL Ecoloch Phase 1 Mahalunge – KUL Kumar Builders:
      A) 850 Flats – Approx Rs. 55 Lakhs Each
      B) Incomplete construction. No basic facilities. Delayed possession.
      C) Police complaints against agitating flat buyers.
      D) Builder has threatened that flat possession will not be given unless apology letter in the form of affidavit is submitted.
    E) Infrastructure charges Rs. 2.5 Lakhs collected from each flat buyer
  • Srushti Regency Wadegaon Kesnand – WS Developers:
    A) 1980 Flats – 36 Rowhouses – 93 Shops – Approx Rs. 14 – 37 Lakhs EachB) No sanction from town planning (PMRDA). No environmental Clearance.C) Stalled project.D) Society formation – Rs. 20,000. Parking – Rs. 50,000. Electricity meter – Rs. 35,000. Development charges – Rs. 25,000 – collected from each flat buyer.

Read also

Pune’s real estate unsold inventory reaches to 2.8 lakhs units

  • Revell Orchid Lohegaon – Rainbow Housing & Revell Realtors:
    A) 550 Flats – Approx Rs. 34 Lakhs EachB) After delay of 2 years possession was given without Completion & Occupancy Certificate.C) No water line. No society formation. No conveyance.D) Infrastructure charges Rs. 3 Lakh collected from each flat buyer. Amenities not provided.
  • Vista Luxuria Manjri – Parmar Indus Associates:
    A) 400 Flats – Approx Rs. 20 – 32 Lakh EachB) Violation of Environmental Clearance. No Completion & occupancy Certificate.C) Solar Rs. 35,000 + Society formation Rs. 25,000 + Car Parking Rs. 1 Lakh + Electricity meter Rs. 25,000 + Development charges Rs. 1.70 Lakhs – collected from each flat buyer.D) 198 flat possession was delayed by 1 year. No compensation given.

Palladium Grand Dhanori – Raojee Construction & Shreyas Shelter

      A) 140 flats
      B) Violation of Environmental Clearance. No PMC water supply. No Sewage Treatment Plant. Firefighting system not working. No solar power. No proper approach road. Society not formed after 8 years of flat possession.
      C) Builder beats & theatence flat buyers.
    8) No help from PMC officials & cooperative department.
  • Defence Colony Radheshwari Nagar Bakori Wagholi – Supertech Construction:
    A) 290 Flats – Approx Rs. 24 – 33 LakhsB) Illegal floors. No possession. No amenities.C) Car parking Rs. 1 Lakh + Electricity meter Rs. 1 Lakh – collected from each flat buyer.
  • Aarohi at Sus – Teerth Realties:
    A) 220 Flats – Approx Rs. 25 – 40 LakhsB) Ongoing legal cases. Basic facilities not provided. Sewage treatment plant not working. Inadequate parking. No water supply. Some possession not given for the last 6 years.
  • Songbirds Bhugaon – Enerrgia SKYi Developers:
    A) 1200 Flats – Approx Rs. 65 Lakh EachB) Incomplete construction. No amenities. Delayed possession.C) Maintenance Rs. 1.5 Lakhs + Electricity meter Rs. 25,000 + Infrastructure charges Rs. 3 – 5 Lakhs – collected from each flat buyer.D) No possession without payment of compulsory club membership Rs. 2 Lakh
  • Mantri Eternity Dapodi – Mantri Developers:
    A) 100 Flats – Approx Rs. 65 – 100 Lakh EachB) Construction stalled. Possession delayed. 90% flat price collected.
  • Jade Residences Wagholi – Dheeraj Realty Mumbai:
    A) 1,000 Flats – Approx Rs. 40 Lakh EachB) Illegal floors constructed.C) Incomplete construction. Delayed possession. Amenities promised in the brochure not provided.D) Electric meter Rs. 60,000 + Development charges Rs. 19000 + Society formation Rs. 10,000 + Parking Rs. 1.5 to 2 lakhs – collected from each flat buyer.
  • KDS Aangan & KDS Dham Charholi – KDS Infrabuildcon:

A) 500 Flats – Approx Rs. 11 Lakh Each

B) Rs. 50,000 – 4.5 lakh collected from the flat buyers. No construction. Land sold. Refund cheques bounced. Ongoing consumer court cases. No action after police complaint.

  •  Viva Hallmark Bavdhan – Viva Swaraj:
  • A) 250 FlatsB) Society not formed. All amenities not provided. Tanker water.C) Car parking – Rs. 1 Lakh – collected from each flat buyer.
  • Suyog Nisarg Wagholi – Suyog Development Corporation:
    A) 600 Flats – Approx Rs. 32 Lakh EachB) Delayed possession. Society not formed. All amenities not provided.C) Infrastructure charges – Rs. 1.70 Lakh + Amenities charges Rs. 2 Lakh – collected from each flat buyer.

Read also

Real estate rental yield is below one percent

 

  • Oxford Paradies Sus Gaon – Oxford Group:
    A) 200 Flats – Approx Rs. 16 Lakh EachB) Society not formed. No amenities.
  • N D Tower Akurdi – ND Developers:
    A) 118 Flats – Approx Rs. 30 Lakh EachB) Amenity charges Rs. 25,000 + Electricity meter Rs. 25,000 + One Time Maintenance Rs. 25,000 + Car parking Rs. 1.5 Lakh – collected from each flat buyer.
  • Pride Greenfields Pimple Nilakh – N K Developers:
    A) 105 Flats – Approx Rs. 38 Lakh EachB) Society not formed. No amenities. Ongoing legal cases.
  • Ivy Estate Wagholi – Kolte-Patil:
    A) 1,000 Flats – Approx Rs. 43 Lakh EachB) Amenity charges Rs. 1.5 Lakh + Electricity meter Rs. 50,000 + Car Parking Rs. 1.5 Lakh + Infrastructure charges Rs. 75,000 + One Time maintenance Rs. 1.16 lakh – collected from each flat buyer.C) Inadequate parking
  • Surbhi Habitat Dhanori – Sukanto Roy Developers:
    A) 12 FlatsB) Society not formed. Insufficient water supply. Construction not per agreement.
  • Suyog Saffron Rahatani – Suyog Construction:
    A) 84 flatsB) Insufficient water supply.C) Electricity meter Rs. 75,000 – collected from each flat buyer.
  • Unique Icon Bhairav Nagar – D. S. Company:
    A) 9 FlatsB) Society not formed.C) Incomplete construction.D) Society formation Rs. 50,000 – collected from each flat buyer
  • Park Spring Dhanori Lohegaon – Pride Purple & Rainbow Housing:
    A) 392 Flats – Approx Rs. 30 Lakh EachB) Parking Rs. 3.50 Lakh collected from each flat buyer.C) Tanker waterD) Delayed possession.
  • Maxima Wakad – Piyush Thakar:
    A) 174 Flats – Approx Rs. 30 Lakh EachB) Delayed possessionC) Society not formedD) Tanker waterE) Car parking Rs. 1.5 lakh + Electricity meter Rs. 50,000 + One time maintenance Rs. 15,000 + Society formation Rs. 15,000 – collected from each flat buyer
  • Puraniks Abitante Bavdhan – Puranik builders Pvt Ltd:
    A) On cancellation of flat booking amount not refunded. Threats to deduct Rs. 1 Lakh cancellation charges.
  • Greenland Rahatani – Ashwini Developers:
    A) 293 Flats – Approx Rs. 45 Lakh EachB) No amenitiesC) Car parking Rs. 1.25 lakh + Electricity meter Rs. 50,000 + Amenity charges Rs. 3 Lakh + Society formation Rs. 30,000 + One time maintenance Rs. 36,000 + Infrastructure charges Rs. 2 Lakh – collected from each flat buyer.
  • Lushlife OVO Undri – LUSHlife Developers:
    A) 352 Flats – Approx Rs. 55 Lakh EachB) Society formation Rs. 25,000 + Amenity charges Rs. 1 Lakh + Infrastructure charges Rs. 3.25 lakh – collected from each flat buyer.C) Possession delayed by more than 2 years
  • River Residency Chikhali – Ishwar Parmar Group:
    A) 261 Flats – Approx Rs. 25 – 30 Lakh EachB) Illegal construction. All amenities not provided. 2 wheeler & 4 wheeler parking sold. Tanker water.C) Electricity meter charges Rs. 30,000 collected from each flat buyer.
  • Laxmi Satyam Residency Dhanori – Vijay Laxmi Developers:
    A) 70 Flats – Approx Rs. 40 Lakh EachB) No completion certificateC) Infrastructure charges Rs. 1 lakh + Electricity meter Rs. 30,000 + Car parking Rs. 1.5 lakh – collected from each flat buyer.D) Tanker water
  • Freedom Park – Mittal Brothers:
    A) 156 Flats – Approx Rs. 50 Lakh EachB) Car parking Rs. 75,000 + Electricity meter Rs. 75,000 + Amenity charges Rs. 50,000 – collected from each flat buyer.C) All amenities not provided.
  • Pavan Park Mohammadwadi – Satish Appaji Sawant:
    No agreements in spite of collecting lakhs of rupees as booking amount in 2013.
  • Kamalraj Balaji Residency Dighi – Kamalraj Group:
    A) 160 Flats – Approx Rs. 35 Lakh EachB) Car parking Rs. 1.5 Lakh + Electricity meter Rs. 60,000 + One time maintenance Rs. 30,000 + Society formation Rs. 30,000 – collected from each flat buyer.C) Society not formed.D) Taker water
  • Sai Luxuria Rahatani – Sai Associates:
    A) 132 Flats – Approx Rs. 32 Lakh EachB) Infrastructure charges Rs. 50,000 + Electricity meter Rs. 50,000 + One time maintenance Rs. 24,000 – collected from each flat buyer.C) Possession delayed by 6 months. –
“Take strict action in 30 days or  “Builder Mafia Raaj Hatao – Pune Flat Buyers Bachao” andolan will be launched” – under the leadership of Akhil Bharatiya Grahak Panchayat, flat buyers in Pune sent an ultimatum to Maharashtra CM Devendra Fadnavis:

 

 

Credit source to  ravi karandeekar

Worst Retirement Mistakes and Remedies to improve them

A retirement date which is at least 30 years away and considering an average inflation rate of 7%, each rupee you have today will be worth only 13 paise. In other words, you will have to make your money increase at least 7.6 times today simply to match up with inflation. Also you need to earn returns to grow your corpus.

As per the Retirement landscape, India’s young population is expected to bring down the ‘dependency ratio’ over the next 30 years with a higher proportion of the population in working age bracket (26-35years) and therefore the average savings rate are projected to increase.

However the motive of increase in the savings rate are more skewed towards the saving for children accounting for 35% of savings than saving for retirement which accounted for 12%.

Of course saving for child’s education is important but the number one priority in 30’s is retirement planning. Financial Planners advise to put money for long term which also takes into account the inflationary cost.

In a country like India where 1 out of 10 people continue working in the later life to provide income for themselves it is necessary for investing early for retirement. There are many good investments which people have made like investing in education, investing for child’s marriage, long term equity investments, early age savings etc. By the mode of primary & secondary data we approached some respondents and found certain bad and worse investment like:

  1. No diversification in the Portfolio
  2. Poor Asset Allocation
  3. No consultation from Investment Experts/No research/No proper guidance
  4. Averaging Investments
  • No diversification in the Portfolio: People keep on investing in stocks without gaining knowledge of how the company is performing, is the portfolio diversified across various sectors, Is the portfolio a high risk/low risk portfolio, Stocks invested are left idle and no portfolio updates are received, etc. Such mistakes by investors attract losses and hence disinvestment happens.
  • Poor Asset Allocation: An optimum asset management is a key to earn better returns. These involves right balance in classifying assets in the form of real estate, Balanced/Equity/Debt Mutual fund, stocks, gold & jewelry, insurance ,bank deposits, Provident & Pension Funds etc. A poor asset allocation like investing 70% of your money into equities and 30% into real estate is a mistake. The investor may perceives that it is High Risk High Return Game but falls in a trap by losing money. Therefore, an asset allocation should be done in such a way that if the performance of one asset weakens, the other assets in the portfolio should are not affected which hence puts the targeted average return in place.
  • No consultation from Investment Experts/No research/No proper guidance: The growth of investing in financial assets in India has just peaked up with 7.30% financial investments and 10.40% physical investments of the (GNDI) Gross National Disposable Income for the year FY2014-15 but there is no proper consultation or guidance provided to the investors thereby which the investors savings get invested in the unproductive assets which give low yields or are high risk assets. Therefore, there is a primary need that investors gain basic knowledge and do considerable research before and during their investment cycle.
  • Averaging Investments: Investors find it difficult to invest long term in falling market, trading in volatile market or short selling to make profits. Sometimes investors buy shares at a very low price thinking that the company stock price will eventually rise and some invest in stocks which are purchased at a higher price but then the investor short sells the stock at lower price due to volatile markets. Such averaging investment decisions affect the investor’s profitability by earning no gains. Therefore, an investor should smartly invest by doing its homework/ systematic research on the investments he/she is pursuing to invest.

The below diagram shows the gap in India’s Household Plans in accordance to the age and the investments made thereof:

The gap in India’s household plans :

 

The gap in India’s household plans

Example:

A retirement date which is at least 30 years away and considering an average inflation rate of 7%, each rupee you have today will be worth only 13 paise. In other words, you will have to make your money increase at least 7.6 times today simply to match up with inflation. Also you need to earn returns to grow your corpus.

Critical Illness treatments now in Installment/EMI form will be a mode of relief

A retirement date which is 10-15 years away will have to invest in equity-linked products which are flexible products that help beat inflation in the long run and are also tax effective. Such products are equity mutual funds, including retirement funds, equity-linked insurance and pension plans, and the National Pension System.

A retirement date which is immediate will have to invest in fixed-income investments. This includes products like debt mutual funds, tax-free bonds, non-convertible debentures and even fixed deposits. The choice of investments depends on each individual’s need for flexibility, tax effectiveness and risk preference.

To conclude “Do it right and your golden years can be filled with independence, joy, and freedom.”

Parag Milk Foods Ltd IPO

The three investors who are selling shares via the IPO are India Business Excellence Fund (IBEF) which is a unit scheme of venture capital fund Business Excellence Trust, India Business Excellence Fund I (IBEF I) and IDFC Private Equity Fund III (IDFC PE) which is a unit scheme of venture capital fund IDFC Infrastructure Fund , IBEF is selling 21.09 lakh shares, IBEF I is selling 39.17 lakh shares and IDFC PE is selling 82.59 lakh shares via the IPO.

From the promoter group, Netra Shah is selling 20.04 lakh shares and Priti Shah is selling 11 lakh shares. Other selling shareholders are selling a combined 31.81 lakh shares.shareholding-pattern-parag-milk-foods-1Anchor Investors : Parag Milk Foods has raised Rs 342.85 crore by selling 1.51 crore shares to a total of 17 anchor investors ahead of the opening of the company’s initial public offer (IPO). The shares were allotted to the anchor investors at Rs 227 per share, the top end of the Rs 220 to Rs 227 per share price band for the IPO.

Among the anchor investors, Nomura India Investment Fund Mother Fund will be allotted 22.02 lakh shares, Tata Balanced Fund will be allotted 19.21 lakh shares and Abu Dhabi Investment Authority – Behave will be allotted 14.23 lakh shares. Other investors include, Government Pension Fund Global, Morgan Stanley Mauritius Company and Copthall Mauritius Investment, among others.

List of Anchors Investors

List of Anchor Investors Issue Detail:

Issue Open: May 4, 2016 – May 6, 2016

Issue Type: Book Built Issue IPO

Face Value: Rs 10 Per Equity Share

Minimum Investment : Rs 14300/- on lower price band

Issue Price: Rs. 220 – Rs. 227 Per Equity Share

Market Lot: 65 Shares

Promoters – Devendra Shah, Pritam Shah and Parag Shah

Book Running Lead Manager – Kotak Mahindra Capital Company Limited, JM Financial Institutional Securities Pvt Ltd, IDFC Securities Ltd, Motilal Oswal Investment Advisors Private Limited

Parag Milk Foods offers discount of up to Rs.12/- on Issue Price (per Equity Share) to all eligible Retail Individual Bidders and Eligible Employees.

parag

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Summary : Parag is one of the leading manufacturers and marketers of dairy-based branded foods in India. The company commenced its business in 1992 with collection and distribution of milk and has now developed into a dairy-based branded consumer products company with an integrated business model, manufacturing a diverse range of products including cheese, ghee (clarified butter), fresh milk, whey proteins, paneer, curd, yoghurt, milk owders and dairy based beverages targeting a wide range of consumer groups through several brands. The company derives all of its products only from cows’ milk. The company’s aggregate milk processing capacity is 2 million litres per day while its cheese plant has the largest production capacity in India, with a raw cheese production capacity of 40 MT per day.

Parag sells its products – primarily milk, curd products, ghee, paneer, butter, cheese products, UHT milk – under Gowardhan and Go brands while also selling premium cow milk under Pride of Cows brand and flavoured milk under Topp Up name.

Gross fresh milk accounted for 20.3% of its total revenues for the nine months ended 31 December 2015.

Ghee, butter and cream accounted for 28.5%

Cheese/paneer accounted for 18.7%

UHT (Ultra Heat Treatment) products accounted for 4.8%

Whey products accounted for 2.9%

Skimmed milk powder and dairy whitener accounted for 10.1%

Other products such as curd, fruit yoghurt, gulab jamun mix, and flavoured milk accounted for 4.9%

Parag’s manufacturing facilities are strategically located at Manchar in the Pune district of Maharashtra and Palamaner in the Chittoor district of Andhra Pradesh with milk processing capacities of 1.2 million litres per day and 0.8 million litres per day, respectively.

Its institutional customers include restaurant and cafe chains such as Yum! Restaurants (India) Private Limited (for Pizza Hut, Taco Bell and KFC), Jubilant Foodworks Limited (for Domino‘s Pizza) and Sankalp Recreation Private Limited (for Sam‘s Pizza).

Objects of the Issue:

1. To meet the capital expenditure requirements for expansion and modernisation of existing manufacturing facilities at Manchar and Palamaner;
2. Investment in Subsidiary for financing the capital expenditure requirements in relation to the expansion and modernisation of the Bhagyalaxmi Dairy Farm;
3. Partial repayment of the Working Capital Consortium Loan; and
4. General corporate purposes.

On performance front, on a consolidated basis the company has posted turnover and profit of Rs. 900.54 cr. / Rs. 18.90 cr. (FY12), Rs. 927.15 cr. /Rs. 20.77 cr. (FY13), Rs. 1089.50 cr./ Rs. 15.97 cr. (FY14) and Rs. 1440.52 cr. /Rs. 25.97 cr. (FY15). For first nine months ended 31.12.15 it has earned net profit of Rs. 31.92 cr. on a turnover of Rs. 1231.19 cr. If we annualized these earnings and attribute to the fully diluted equity post IPO then asking price is at a P/E of 44 plus at the higher price band. This augurs well against listed peers that are quoting at a P/E of 56 plus.

Positive

32% share in High growth cheese market.

Revenues and EBITDA have increased at a compounded annual growth rate (CAGR) of 22 per cent and 21 per cent.

GOVT. inventives for organised players in the dairy sector like VAT and Tax benefits.

Negative

There are outstanding criminal proceedings pending against the company, its promoters and one of its directors.

Aggressive pricing by exisitng dairy co-operatives like Amul and Mother Dairy.

Lack of free cash flows

Limited pricing power in highly competitive fresh products

Margins are very low 2% to 2.4 % from last 3 years.

Bhagyalaxmi Dairy farm ( 100% SUB ) is making losses and its unable to sell the full production at premium pricing.

It’s operations are dependent on supply of large amounts of cow’s row milk, and its inability to procure adequate amount of good quality row milk, at competitive prices,may have an adverse effect on its business.

They do not have long term agreement with suppliers for other row materials or products.

Potential increase in VAT rate and Tax rate on expiery of Incentives.

Possible interruption in availability of quality milk at reasonable prices and rising competition are some of the key risks for the company.

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here

Ujjivan Financial Services IPO review

Ujjivan Financial Services Ltd. (UFSL) is a well established player in Micro Finance sector and is in operation since 2005. Company’s missions of providing a full range of financial services to the economically active poor who are not adequately served by financial institutions bear fruits.

It’s business is primarily based on the joint liability group lending model for providing collateral free, small ticket-size loans to economically active women. Ujjivan Financial Services also offers individual loans to Micro & Small Enterprises (“MSEs”).

On October 7, 2015, the company was one amongst 10 companies in India, out of a total of 72 applicants, to receive in-principle approval from the RBI to set up a small finance bank.

Ujjivan Financial Anchor Allocation @Rs.210 per share for Rs. 265 cr.

Birla MF – 30.04 cr
Birla Life – 25.04 cr
UTI MF – 25.04 cr
Tata MF – 25.04 cr
Sundaram MF – 25.04 cr
I-Pru MF – 25.04 cr
Rel MF – 25.04 cr
Bajaj Allianz – 15.04 cr
HDFC Life – 15.04 cr
Rel Life – 15.04 cr
Max Life – 7.04 cr
Tata AIA Life – 7.04 cr
BNP Paribas – 5.05 cr
Canara Robeco – 5.05 cr
Forefront – 5.05 cr
LIC Nomura – 5.05 cr
Canara HSBC Life – 5.05 cr
Total – Rs. 264.75 cr

They offers group loans and individual loan as per their customer requirements. That include agricultural, education, home improvement, home purchase and livestock loans. In addition to loan products, they also provide non-credit offerings comprising of life insurance products, in partnership with insurance providers such as Baja Allianz Life Insurance, Kotak Mahindra Life Insurance, and HDFC Life Insurance Company Ltd.

Ujjivan Financial operations is spread across 24 states and union territories, and 209 districts across India. serve over 2.77 million active customers through our 469 branches and 7,786 employees.

Ujjivan

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Objects of the Issue:

1. Augmenting capital base to meet future capital requirements;
2. General corporate purpose.

Issue Detail:

Issue Open: Apr 28, 2016 – May 2, 2016

Issue Type: Book Built Issue IPO

Issue Size: 42,270,760 Equity Shares of Rs 10 aggregating up to Rs 887.69 Cr
Fresh Issue of Equity Shares of Rs 10 aggregating up to Rs 358.16 Cr
Offer for Sale of 24,968,332 Equity Shares of Rs 10 aggregating up to Rs [.] Cr

Face Value: Rs 10 Per Equity Share

Issue Price: Rs. 207 – Rs. 210 Per Equity Share

Market Lot: 70 Shares

Minimum Order Quantity: 70 Shares

Share holders in Ujjivan Financial Services

Shareholders in Ujjivan Financial Services

To provide exit option to its existing stakeholders and to raise fresh funds to meet its future capital requirements, the company is coming out with a maiden IPO consisting of primary as well as secondary offer.

On performance front
, while the company enjoys well experienced and trained staff as well as loyal customers trust, its AUM and business marked CAGR of 51% and 41% respectively for last five fiscals. Its top and bottom lines has been growing steadily.

For last three fiscals its total income and net profits were Rs. 233.93 cr. / Rs. 32.84 cr. (FY13), Rs. 357.66 cr. / Rs. 58.42 cr. (FY14) and Rs. 611.88 cr. / Rs. 75.79 cr. (FY15). For first nine months ended 31.12.15 it has reported net profit of Rs. 122.31 crore on a total income of Rs.729.64 crore.

If we attribute these earnings on annualized basis on fully diluted equity post IPO then asking price is around 15 P/E that augurs well compared to its listed peers.

Positive

In principle approval received from RBI to set up small finance bank ( SFB ) which can boost its revenues in future.

On the uppar price band of Rs.210/- and on FY15 EPS OF Rs.10.63, PE ratio works out to 19.7x. Similarly on last 3 years EPS of Rs.8.93, PE ratio works out to be 23.5x.

PE ratio between 19.7 and 23.5.

It’s competitors, SKS micro finance PE ratio is 36x and shriram city union finance is 17.5x and the industry average is 28x. Hence, i feel the upper price band of Rs.210 per share is reasonably priced.

Negative

Company may not be able to set up the proposed SFB ( small finance bank ) within the timelines prescribed by the RBI

There can be no assurance that they will be able to replicate its past business performance, growth and profitability during the SFB transition period.

Company results of operations and income are dependent on its ability to manage interest rate risk,and an inability to manage its interest rate risk may have a material adverse effect on its buisness prospects and financial performance.

They are exposed to operational and credit risks which may results in NPA.

Conclusion

Considering the status enjoyed by this company in MFI business and the plans for transition into a small finance bank, investment in this IPO will bring reasonable rewards in coming years. ( Readers must consult a qualified financial advisor prior to making any actual investment decisions )

DISCLAIMER:

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Thyrocare Technologies IPO review

Thyrocare Technologies, a pan – India diagnostics chain with focus on preventive and wellness health offerings under the Aarogyam brand is set to tap the markets today with its initial public offer (IPO).

Company raised Rs 144 crore by allotting 3.22 million shares to anchor investors that included DSP Blackrock, HDFC MF and Birla Sunlife MF. The shares were allotted at Rs 446/-.

Thyrocare competes with diagnostics chains such as the recently listed Dr Lal PathLabs. That apart, SRL Diagnostics, Metropolis Healthcare and Apollo Clinic are some of its other competitors.

THYROCARE

The offer for sale is essentially to enhance the company’s brand name and provide liquidity to existing shareholders, analysts say. The company will not receive any proceeds from the offer.

Company Promoters:

Biggest shareholders

Objects of the Issue:

The object of the issue are to:

1. Achieve the benefits of listing the Equity Shares on the BSE and the NSE; and

2. Carry out the sale of up to 10,744,708 Equity Shares by the Selling Shareholders.

Issue Detail:

Issue Open: Apr 27, 2016 – Apr 29, 2016
Issue Type: Book Built Issue IPO
Issue Size: 10,744,708 Equity Shares of Rs 10 aggregating up to Rs 479.21 Cr
Offer for Sale of 10,744,708 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
Face Value: Rs 10 Per Equity Share
Issue Price: Rs. 420 – Rs. 446 Per Equity Share
Market Lot: 33 Shares
Minimum Order Quantity: 33 Shares
Listing At: BSE, NSE

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For giving exit option to its existing stakeholders,
the company is coming out with a maiden IPO purely with secondary offer (i.e. Offer for sale). Thyrocare is offering 10744708 equity share of Rs. 10 each via book building route and has fixed a price band of Rs. 420-446. Thus it plans to mobilize Rs. 451.28 cr./Rs. 479.21 cr. based on lower and upper price bands.

It is important to highlight that apart from CX Partners, Norwest Venture Partners (NVP) and Samara Capital also hold important equity positions in the company – 9.4% and 2% respectively. However, both companies will not be participating in the IPO. This is something we like.

On performance front, it has posted net profit of Rs. 44.43 crore on a turnover of Rs. 190.34 crore for FY 15 on a consolidated basis. For first nine months of the current fiscal it has posted net profit of Rs. 40.02 crore on a turnover of Rs. 180.47 crore. If we attribute latest earnings on annualized basis on the current paid up equity capital of Rs. 53.72 crore, then the asking price is at a P/E of around 45. That compares well with its peer that recently went public and quotes at a P/E of 85 plus.

The company has issued three bonuses in the span of 16 years so far in the ratio of 1 for 1 in November 2003, 5 for 2 in March 2006 and 3 for 1 in September 2014. Between 2003-2006 it issued shares at a price of Rs. 200 per share. It also issued few shares in March 2013 at a price of Rs. 75 per share.

Positive

PE ratio between 45 times to 45.5 times

Its competitors Dr. lal paths lab trading at a PE ratio of 87 times. There are no other listed peers.Hence,difficult to determine with one peer comparison that whether the issue price is priced over priced or under priced.

Company revenues grown at 23% CAGR in last 5 years.It is generating good margin in the last 5 years.

Portfolio of specialized tests with an emphasis on wellness and preventive healthcare

Pan-India collection network supported by logistics capabilities and information technology infrastructure

Capital efficiencies in its diagnostic testing business

Negative

There are various proceedings pending against the company and its Directors,Subsidiary, Promoters and certain group companies,which,if determined against them, may have an adverse effect on its business.

The company operates in a highly-competitive and fragmented industry

Changing technology and new product introductions poses risk to demand

Relies significantly on its ASPs to source samples and thereby sell its pathology testing services

Other risk ( Internal and external ) can be viewed in the draft prospectus from page no. 15 onwards.

Conclusion:

Considering the brand image and the operational methods, the company is poised for bright prospects ahead. Investment in this IPO will bring reasonable rewards in coming years. Investment may be considered for short to long term. ( Readers must consult a qualified financial advisor prior to making any actual investment decisions )

DISCLAIMER:

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.