Category: IPO/FPO ANALYSIS

Opportunities provided in IPO and FPO situations are analysed

Sparkling Power Finance Corp FPO – May 10-13

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Update on late May 12th!

  • PFC FPO got over subscribed 3.6 times on Thursday.
  • While the FII portion was subscribed a healthy 6.9 times, the HNI (0.01 times) and Retail (0.34 times) subscribers are waiting for the last day. This indicates a likely surge tomorrow in the latter two categories.
  • The maximum subscription amount for Retail is Rs 2,00,000. For Retail, if you want to maximise your subscription, bid for 1064 (28X38) shares at Cut Off (could be as low as 183.35) for an investment of Rs 1,95,084
  • Good luck !!

FPO Note – May 10th

Power Finance Corp is a power sector PSU available at attractive valuations. Demand in the sector remains robust. Subscribe to the FPO.

Power Demand:

  • The Indian power generation sector faces huge demand growth. See graph (we are in 11th Plan now)
  • Plan vs Achievement has been as low as 51.5% in the 10th Plan
  • The shortfall of peak power has been 8-12% in the last decade.
  • Over 40% of Indian population still don’t have access to electricity
Power Finance Corp - FPO

Capacity addition – Power

Power Finance Corp  – Description and Profile

  • PFC is a firm that funds and stimulates power generation capacity in India. It is a Navaratna PSU registered as a NBFC with ‘Infrastructure Finance Company’ status.
  • PFC has a market share of about 20% in the Indian power lending industry, across all entities, NBFCs/ Banks, private/ public, and Indian/ MNCs.
  • PFC lends to a number of power generation firms, and is a nodal agency for Ultra Mega Power Projects (UMPPs), and the R-APDRP program (Restructured Accelerated Power Development and Reform Program), and for  other government driven power initiatives
  • It also lends to related sectors like Transmission Projects and Distribution, and runs the DRUM program (Distribution Reforms, Upgrades & Management).

PFC Stock evaluation, performance and returns

  • PFC first got listed in a Jan 2007 IPO, and got oversubscribed by 75 times; and the IPO price was set at Rs 85.
  • Investors in the Jan 2007 IPO of PFC have earned a 22% CAGR return to date
Power Finance Corp - FPO

PFC investor Returns

  • PFC has certainly outperformed the NIFTY since it’s IPO.
Power finance Corp - FPO

PFC has outperformed the Nifty

  • Key financial metrics of PFC are showing a steady uptrend
Power Finance Corp - FPO

PFC – financial snapshot

  • Quarterly profits are showing steady growth (except the last quarter)
Power Finance Corp - FPO

PFC – Income and Profits

Lending to Power sector

  • PFC is a nodal agency to facilitate implementation of Ultra Mega Power Projects; these have a capacity of 4,000 MW. PFC charges consultation fee of Rs 15 crores for accomplishing the legal approvals and consultation for a UMPP, thus acting as a one-stop solution provider.
  • The Ministry of Power, Govt. of India has launched the Restructured Accelerated Power Development and Reform Program (RAPDRP) in July 2008 with focus on establishment of base line data and fixation of accountability, and reduction of AT&C losses through strengthening and up-gradation of transmission and distribution network and adoption of information technology during XI plan.
Power Finance Corp - FPO

PFC – Asset and Borrower profiles

  • On the Assets side, PFC is primarily into Generation; the borrowers are mostly State Government bodies
  • PFC is allowed to raise tax-free retail bonds; this has allowed it access to lower cost capital.
  • PFC’s loan book grew at an annualized rate of 22.8 per cent over the period FY06 – FY11
  • PFC is also analyzing entry into funding for Nuclear Power plants.

FPO Offer:

  • The price band is fixed between Rs 193 – 203 per equity share. The offer will be open from May 10-13.
  • Retail investors are offered a discount of 5 per cent in the issue price
  • The IPO will raise funds of Rs 4400 – 4,700 crores at the lower and upper ends of the price band.
  • The follow-on public offer (FPO) comprises a fresh issue of 17.21 crore equity shares by the company and an offer for sale of 5.73 crore equity shares by the Government of India. Currently Government holds 89%. The FPO would result into equity dilution of 14.99%.
  • The purpose of the IPO is to
  • Help PFC keep capital adequacy ratio at 15% over the next few years – it has fallen to 16% now after the lending operations of this year.
  • Strengthen the Balance sheet
  • At the upper end of FPO pricing, of Rs 203,
  • P/E will be 8.9 times (Industry average is 12.2)
  • P/B will be 1.88 times
  • Dividend rate will be 2.2% – fair returns, and note that dividend payout will continue to increase
  • Note that Retail may be allotted at 5% below 193 – that makes it quite attractive.

Risks:

  • Power generation project execution: This was the primary risk a few years ago, with delays and technology challenges. But of late with the opening up to the Private sector, the execution capabilities are improving
  • Power generation operations – Electricity payments from SEBs. The State Electricity Boards – SEBs cash losses have risen from Rs 6,500 crores in 2006-07 to Rs 28,400 crores in 2008-09. This may affect the payments to electricity plants, which in turn can affect PFC. However SEBs are undergoing restructuring in the States, and these should emerge stronger over the next few years
  • Power generation operations – Fuel supply linkages
  • Most power generation projects have Coal as fuel. Coal is generally supplied by Coal India Ltd. – which has not been able to meet production targets in recent quarters.
  • There have also been supply chain issues with coal – such as inability of Indian Railways to handle transportation.
  • Coal is also being supplied from Australia. This supply got affected recently due to floods there.
  • The fuel supply risks are being addressed in new projects by long term commitments from suppliers for new power generation projects.
  • While PFC’s gross and net NPAs have remained negligible in the last five years, defaults – it does not make provisions for loans turning bad – and higher credit costs could impact its balance sheet and earnings.

Opinion, Outlook and Recommendation

  •  India is a power deficit country and the current growth path will require continued capacity additions and efficiency improvements for foreseeable future.
  • PFC will see it’s role expanding for facilitating and funding power sector projects
  • PFC is another monopoly PSU and will execute on government objectives, in an assured returns environment.
  • The Indian government continues to offer PSUs at attractive valuations in public offerings
  • PFC can be a Core holding in the Core – Satellite portfolio for investors.
  • The current FPO offer is at 52 week low of market price. The fall in share price by 45% from the Oct 2010 peak has made current valuations attractive. This reduces the risk of the asset at this price.
  • Watch for subscription data till May 12th to get a better idea of allotments – or even better, check back on this website www.jainmatrix.com for updates :-)
  • Do you find this report useful? Please comment below. You can also subscribe for my posts by filling the ‘Sign me up’ box on top right of this page.

Disclaimer:

These reports and documents have been prepared by JainMatrix Investments Ltd. They are not to be copied, reused or made available to others without prior permission of JainMatrix Investments. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Also see: https://jainmatrix.wordpress.com/disclaimer/
Performancing Metrics

Future Ventures IPO note – April 2011

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Update on April 29th

  • Future Ventures has got a dull response till today. The overall subscription is 1.52 times the offer.
  • QIB section is oversubscribed 0.26 times, HNI is (strangely) 7.8 times and Retail 0.6 times.
  • Poor response may be not just because of poor reviews (see my IPO note below) but also concurrent investments in Muthoot Finance IPO as well as the falling Sensex over the last few days.
  • Good luck with your investments !!

IPO Note – Published on: Apr 23, 2011

Future Group – Promoter

  • Future Ventures is a part of Future Group, which owns companies like Pantaloon Retail India (Big Bazaar, Food Bazaar), Future Value Retail and NBFC Future Capital Holdings, Future Generali Insurance, Futurebazaar India, etc.
  • The core business of the Future Group is Retail, but subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, consumer brands, retail real estate development and retail media and logistics. The key promoter is the well-known Mr. Kishore Biyani.
  • Two of these group companies are listed entities, Pantaloon Retail India and Future Capital Holdings.
  • These two have not exactly outperformed in the last few years in the market.

Pantaloon Retail – Financial snapshot

A 5-year view of the share price of Pantaloon Retail. (click on graphic to enlarge)

Future Ventures IPO

Chart 1: Pantaloon Retail Share Price

A view of financials of Pantaloon Retail. (click on graphic to enlarge)

Future Ventures IPO

Chart 2: Pantaloon Retail financials

  • While revenues are high/have grown fast, there have not been corresponding EPS growth (due to dilutions), and the P/E still remains very high
  • Current market cap – 6000 crores

Future Capital Holdings

  • Had IPO in Feb 2008
  • The stock has suffered an average 40% fall in share price annually in the last 3 years
Future Ventures IPO

Chart 3: Future Cap Shares

A view of financials of Future Capital. (click on graphic to enlarge)

Future Ventures IPO

Chart 4: Future Cap Financials

  • Sales have not increased steadily; Profits have increased, but P/E still remains very high
  • Current Market cap – 1060 crores

The short profiles of group companies show that while the ‘BigBazaar’ brand is very good, and revenue growth high, the group has not been able to translate it’s ambitious plans into profitable businesses, and benefit shareholders.

Future Ventures – Business Profile

  • Future Ventures is like a holding company, that invest in and operates businesses in ‘consumption-led’ sectors in India, sectors which will grow as the purchasing power of Indian consumers increases, and caters to their changing tastes, lifestyle and spending habits.
  • Future Ventures has so far invested around Rs 450 crore in apparel makers, and Rs 250 crore in processed foods and consumer goods space.
  • The Company has 14 companies in its portfolio, and owns brands in fashion, FMCG, food processing and home products.
Category Company Products/ Market Remarks
Retail distribution 1.   Aadhaar Retailing Limited Rural and semi-urban retail distribution of agricultural and consumer products Majority stake
FMCG 2.   Future Consumer Enterprise Ltd. Brands such as Tasty Treat, Clean Mate, Care Mate, Premium Harvest and Fresh and Pure, being marketed through Big Bazaar and Food Bazaar. Majority stake
FMCG 3.   Future Consumer Products Ltd Brand ―Sach. Majority stake
Fashion 4.   Indus League Clothing Limited Ready-made garments under brands like Indigo Nation, John Miller, Scullers and Urban Yoga Majority stake
Home Products 5.   Indus Tree Crafts Private Limited Domestic retailing and distribution of a wide range of environmentally and socially sustainable products. Majority stake
Fashion 6.   Lee Cooper India Limited A manufacturer and retailer of denims, trousers, jackets, shirts and shoes under the Lee Cooper brand. Majority stake
Fashion 7.   Biba Apparel, Holds 17.3% stake in Biba, which will be upped to 28% soon
Food Processing 8.   Capital Foods A food processing company with brands like Chings Secret, Smith & Jones, Raji, Mama Marie and Kaeng Thai.
Consumer 9.    Amar Chitra Katha Stake to increase to 26% from 13.7% presently
Fashion 10.     AND Designs India Ltd; Global Desi Luxury clothing brands
Fashion 11.     Holii Accessories Private Ltd A joint venture with Hidesign India Private Limited for leather handbags and wallets
Fashion 12.     Celio Future Fashions Ltd A JV with a French brand of men‘s apparel and accessories
Fashion 13.     Turtle Limited Manufacturer, distributor, exporter and retailer of men‘s wear products.
Retail 14.     SSIPL Retail Ltd A retailer of Nike branded products, wholesaler of footwear, sportswear and apparel, and a manufacturer and distributor of footwear.

Strategy

  • Future Ventures tries to exercise operational control or influence in the business ventures in which it invests
  • They pursue appropriate longer-term value creation strategies, which may include unlocking value in their business ventures through public market or private sales.
  • Future Ventures is also looking to invest in more ‘mature opportunities’ in companies which, it believes, have unrecognized growth potentials or are undervalued or in which it can identify hidden assets or recovery potential.

Financials

  • The company had consolidated net worth of Rs 738 crore as of December 31, 2010, with the value of investments pegged at Rs 112 crore.
  • For the nine-month period ended in Dec 2010, it had a total income of Rs 399 crore (primarily through retail sales of merchandise from its subsidiaries) with a net loss of Rs 14.67 crore.
  • Company officials claim that most of the companies that Future Ventures has invested in are breaking even at the EBITDA level and the results will improve going ahead. /This does seem like a tall claim :-).
  • The company is not expensive at around 1.1x post IPO book value (at upper band).
  • Market cap after successful listing would be about Rs 1800 crores

Negatives/ Challenges/ Concerns

  • For many portfolio companies, this is very early in the investment cycle. It is actually Private Equity companies that invest in such early stage, high risk businesses.
  • Most businesses are small and are many years and crores of rupees away from break-even volumes, a national recognized brand and profitability. Even with Pantaloon’s clout in distribution, it will take many years of investment to start making profits.
  • Intellectual Property – royalty payments to be made to Future Group for ‘Future’ trademark.
  • While there is a common ‘consumption‘ theme in the Portfolio companies, there are few synergies among them. Eg. A high-end fashion label from a well-known designer has little rub off on Amar Chitra Katha comics for kids or Chinese food sauces.
  • It’s possible that Pantaloon Retail may soon launch a number of Retail formats, but Future Ventures is a shaky ‘backward integration’ for Pantaloon Retail.
  • Maze of portfolio companies, difficult to value and project financials.

Offering

  • The IPO has been priced at Rs 10-11 a share. It is open for subscription from April 25-28 for Institutional investors and till April 29 for Retail.
  • The company will raise Rs 750 crore rupees through its initial public offering of shares, of which Rs 120-150 crore will be invested in existing businesses, while the remaining amount will be used for new acquisitions
  • Besides various privately held group firms of Kishore Biyani, Pantaloon Retail is the largest shareholder of Future Ventures with 18 per cent stake that will fall to 9.5-10 per cent post issue. Promoters’ combined holding will drop down to around 31-32 per cent post IPO while that of  Bennett Coleman & Co Ltd (Times of India Group) will see its 12 per cent stake drop to around 6.5 per cent, according to industry estimates.
  • This is the second attempt by the company to raise money via an IPO. It had earlier filed for an IPO just when the financial crisis began, then cancelled it.

Investment Advice

  • Avoid the issue for the following reasons:
  1. This is an investment vehicle in a clutch of firms that need heavy investments to grow in terms of brand and scale of business
  2. There is a bad record of profitability in the current business
  3. Poor track record of the promoter, of shareholder value creation in previously listed firms.
  • Watch subscription figures of IPO till April 28 to set expectations
  • Check back on the website www.jainmatrix.com for updates.
  • Do you find this site useful? Please comment below. You can also subscribe for my posts by filling the ‘Sign me up’ box on top right of this page.

Disclaimer:

These reports and documents have been prepared by JainMatrix Investments Ltd. They are not to be copied, reused or made available to others without prior permission of JainMatrix Investments. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Also see: https://jainmatrix.wordpress.com/disclaimer/

Performancing Metrics

Muthoot Finance Limited – IPO (18-21st April 2011)

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Update on April 20th

  • Muthoot Finance got over subscribed 7.09 times till today. The IPO closed today for QIB bidders and tomorrow for retail and HNI.
  • Of the categories, the QIB portion was subscribed 25 times; HNI 0.98 times and Retail 1.34 times
  • This indicates a likely surge tomorrow in the latter two categories.
  • The Maximum Subscription Amount for Retail Investor is now Rs 2,00,000
  • For Retail, if you want to maximise your subscription, bid for 1120 shares at cut off (likely 175) for an investment of Rs 1,96,000
  • Good luck !!

Business Profile

  • Kerala-based Muthoot Finance is a non-deposit taking, non-banking finance company with a focus on Loans against Gold
  • Primary Product – Small consumer Loan against gold (jewellery/ coins) as collateral. As per the company, the maximum tenure for a gold loan is one year, while the average tenure is three to six months.
  • The cost of borrowing is 9.5% (may increase by 1% soon), while their loans start at 12%.
  • Muthoot’s network stands at 2500+ branches across India employing 15000+ persons.
  • The market is large because Muthoot falls somewhere between a microfinance firm and a traditional bank, in terms of loan size and consumer profile. It is exploiting the customer’s gradual shift from pawnbrokers to organised lenders
  • At the same time, having Gold as collateral for personal loans provides for a low risk model to Muthoot, comparable to Home loans. Other loan categories are riskier.

Snapshot of key financial parameters

Muthoot Finance IPO

(click on graph above to expand)

USP of Muthoot

  • Market leader in Gold Loans (click on graph below to expand)
Muthoot Finance IPO

Chart 2: Market shares in % of Industry

  • The loan-to-value ratio for a 22 carat jewellery piece typically varies from 55- 65% for banks while it increases to 70 – 80% for NBFCs like Muthoot.
  • High brand recall due to recent ad campaigns and high visibility branch locations.
  • There are very few Gold loan only players – listed Mannapuram General Finance comes to mind. Most other players are Banks, and NBFCs having a broader loan portfolio. In that sense, Muthoot is a leader.
  • Gold loan market shares: NBFCs are rapidly growing their market share of the Gold Loan market (click on graph below to expand)
Muthoot Finance IPO

Chart 3: Growth of NBFC market share in Gold Loans

  • Growth Potential – Muthoot’s gold loan book of Rs 13,000 crores (Nov 2010), is expected to grow by Rs 10,000 crores in one year.
  • As of November 2010, Muthoot holds 97 tonnes of gold. NBFC sources estimate the gold held by households in India at 20,000 tonnes out of which 10% (2,000T) is held by lenders across the country. Of this 10%, only 25% (500T) is with the organised players like NBFCs and banks. So there is visible potential for this organised market to grow.
  • Gold Prices have been on an upswing. This helps the gold held as collateral for loans to appreciate in value. This lowers Muthoot’s collateral risks. (click on graph below to expand)
Muthoot Finance IPO

Chart 4: Gold Prices over last five years

  • However, if Gold prices fall, the risks will increase, along with possibly default rates

Negatives/ Challenges/ Concerns

  • A recent RBI directive says that bank credit to NBFCs for giving loans against gold jewellery will not be treated as exposure to priority sector. This will raise Muthoot’s cost of funds by 50 to 100 basis points.
  • For the past three fiscals, Muthoot Finance had negative net cash flows. This is unhealthy. The company explains in its RHP that it is primarily on account of high growth in borrowing under financing activities for the purpose of lending under operating activities.  But also Muthoot is investing heavily in additional branches and employees.
  • There are a number of civil, criminal, consumer, and tax cases by and against Muthoot and group companies. One pending in the SC is related to the Kerala Money Lender’s Act (KML). Any adverse ruling here can curb operations in Kerala.
  • Muthoot Finance has agreed to sizeable royalty payments to promoters for the Brand.
  • There are also anti-dilution guarantees provided to four institutional investors – Baring, Matrix, Wellcome, & Kotak – these are concerns left unaddressed.
  • Complex web of 55 Promoter group companies are mentioned in the RHP. Some are in similar or related businesses. There is no clear future path on conflict of interest, M&A by promoters, etc.
  • As a single sector focus player in Gold loans, Muthoot is exposed to several risks:
  1. Fall in price of Gold. This is not expected in the immediate future, but in a 3-5 year period, there may be a sharp appreciation followed by a sharp fall in prices. This can expose Muthoot to a collateral risk.
  2. As Banks and other NBFCs note the high growth in Gold loans, they will also become aggressive in this sector, and competition will intensify

IPO offering, Valuations and Investment Advice

Offering

  • The IPO pricing of Rs 160-175 per share will help raise Rs 824-910 crores, on sale of 13.85% of the equity capital, valuing the firm at over Rs 6000 crores (lower end)
  • The IPO opens April 18, and closes on April 20 for QIB and April 21 for retail and HNI
  • ICRA graded it ‘IPO Grade 4′ – above average fundamentals; Crisil also graded “4/5”
  • The IPO proceeds will be utilised to meet the company’s capital adequacy norms (>15%) in the future, funding of loans and for general corporate purposes.
  • 7% of the equity capital is held by PE players like Baring India, Matrix Partners, Kotak India PE Fund and Wellcome Trust.

Valuations comparison

Muthoot Finance IPO

Chart 5: Valuations comparison (JainMatrix projections & graphics)

Conclusion and Investment Advice

  • The issue is a High Risk and potentially High Gain offering
  • There should be a good listing due to leadership position, fair valuations and high growth
  • Invest for 1-2 years. If Muthoot broad bases it’s business using it’s strong brand and reach, and simplifies it’s organization/ promoter group companies, it can sustain and extend it’s market position
  • Check back on this website www.jainmatrix.com for updates  :-)
  • Do you find this report useful? Please comment below. You can also subscribe for my posts by filling the ‘Sign me up’ box on top right of this page.

Disclaimer:

These reports and documents have been prepared by JainMatrix Investments Ltd. They are not to be copied, reused or made available to others without prior permission of JainMatrix Investments. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com

Also see: https://jainmatrix.wordpress.com/disclaimer/

Performancing Metrics

P&S Bank IPO – Post review on 20th Dec

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  • Punjab & Sind Bank IPO closed on Dec 16th with amazing strength – overall over-subscription 51 times with QIB 50 times, HNI 86 times and Retail 44 times !!
  • It exceeded all my expectations – looks like everyone has bet on the winning horse :-)
  • It will be a bit of a lottery if you get any shares. Also with minimum lot size at 50, retail cannot expect any more than this.
  • If they stick to the usual processing times, allotment may be around 26th and listing around 30th.
  • I feel the listing pop thereafter could beat CIL and MOIL as in banking stocks we are in familiar territory. Barring market abnormalities, it could be 60-80%.
  • Good luck with your investments !!

Also see IPO note – click link

IPO round up – 15th Dec

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Punjab and Sind Bank IPO – Last day

  • The subscription for P&S Bank on 15th was QIB 50 times, HNI 23 times and Retail 8.4 times – huge over subscription !!
  • Retail can easily go up tomorrow to 25-30 times – sounds like a repeat of MOIL in terms of over subscription
  • The offer is of course attractive, but in the IPO format, too high interest means smaller allotment, reducing the returns from the offering.
  • Good luck with your investment !
  • Also see Analysis of this IPO – click link

MOIL listing

  • the share exploded off on listing today to peak at 591 – a premium of 58%
  • However, it was downhill thereafter, as the overall market negativity dragged it down
  • With markets expected to be dull for a while, heading into the year end, I’m not sure if we will see a new high very quickly in MOIL
  • Also see analysis of MOIL IPO

SCI FPO

  • SCI saw some weakness, with market prices falling below even the discounted Retail pricing.
  • I expect a few dull days before the stock gathers strength again – it has to reverse the direction.
  • Also see analysis of SCI FPO – click Link

Punjab and Sind Bank IPO – closes Dec16 for Retail

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Investment Note

Description

  • Punjab & Sind Bank has a good network – 926 branches in North/ Central India
  • The IPO pricing of Rs 113-120 per share will help firm raise Rs 452-480 crores
  • The primary purpose is to fund growth plans and shore up capital adequacy
  • Government shareholding will fall to 82% post IPO

Positives

  • 5% Retail discount; Attractively priced compared to PSU peers, with P/E multiple of 4.56-4.84, and P/B value of 1.12
  • CAGR of 38% in business over 06-10 with advances + deposits at Rs. 88k crores
  • Gross NPA ratio is falling, and is currently at 0.92%, favorable compared to peers; Conservative in NPA provisioning
  • Also there has been a 24% CAGR in earnings
  • Over 8000 employees, but still it has high productivity of Rs 9.6 crore/ employee
  • Quality partners – Tie-ups with Aviva (for life), Bajaj Allianz (general insurance) and UTI MF (distribution of MF product) should shore up its fee-based income.

Negatives/ Challenges

  • Low CASA at 25%, resulting in lower Net interest margins (NIM) at 2.67 for FY-10. Hence now firm is focused on branch and deposits growth.
  • Lack of clarity on appointment of new CMD – typical problem of PSU firms
  • Slow technology up-gradation
  • Presence in limited geographies – however in these areas, there is a high consumer recall/ brand strength

Outlook, IPO status and Investment Advice

  • While not large, P&S Bank is likely to grow faster and more profitably than the sector for a few years. Thereafter who knows, a M&A maybe?
  • On Day 1, 13th Dec, the issue has been oversubscribed 1.58 times – surprising strength, with QIB (2.94 times), HNI (0.18 times) and Retail (0.40 times).
  • Looks like even the recent steep fall in Indices has not dampened the appetite for attractively priced government offerings :-)
  • Watch subscription figures of IPO till 15th Dec to set expectations for allotments
  • For firm allotment in Retail, invest in 1650 shares at cut off (120) – a total investment of 1,98,000.

Also see post closure note of this IPO – click link

SCI FPO analysis – closing review on 6th Dec

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  • The FPO price fixed today is Rs 140 – high end of range
  • The Retail and HNI subscriptions piled up on the last day of FPO and surprised on the upside. Retail is 6.5 times over and HNI 3.7
  • Seeing the numbers retail investor can at max expect around 240 shares worth Rs. 31-33,000. Quite smaller allocation than our pre- FPO expectations
  • Retail over-subscription was more than HNI – this is a new trend.
  • Employee quota was very small and under subscribed, this may move to retail.
  • General market directions look positive, and I expect the price will rise slowly after FPO shares are allotted.
  • After this very successful FPO, SCI has promptly announced $3 billion worth of capital investments over the next 3 years. This will double the gross tonnage over next 7 years. Positive signs indeed !!

Also see Analysis of SCI FPO (click link)