It has got backing of the big bull Rakesh Jhunjhunwala.
IPO opens tomorrow.
Reasons why one should invest:-
1) Strong performance shown by the promoters over the last 4 years.
2) Backing by Mr. Jhunjhunwala.
3) Strong growth expected.
Reasons why one should avoid:-
1) Overpriced - Listed peers available at much cheaper valuations.
2) EPC and Power is not the flavor of the markets (Although I like this segment).
I will not apply for this issue because:-
1) I don't have money. My money is blocked in ASBA for SCI
2) Even if I had the money, I would not have applied because valuations are extremely expensive.
3) I will track this company but will not buy the shares now. Once the dust settles after 6 months to 1 year, it might be available at attractive valuations.
I find the issue overpriced, The company seems to be poor in collecting dues from its debtors, more that 60% of the revenue is outstanding, that makes me feel the books are made up, particularly so when the company is operating with a negative cash inflow for consecutively 4 years. Avoiding it
PS, The price per share Rakesh Jhunjunwala paid is Rs. 14/-, he is going make a windfall, don't know about IPO applicants.
I find the issue overpriced, The company seems to be poor in collecting dues from its debtors, more that 60% of the revenue is outstanding, that makes me feel the books are made up, particularly so when the company is operating with a negative cash inflow for consecutively 4 years.
Over 90% of the company's revenues come from government authorities and public sector undertakings.
Such companies usually have high "debtor days" as government departments and companies take a long time to make payments.
I didn't look at the cash flow statement and thus won't comment on the cash flows.
After I looked at the valuations that the company was asking for, I just stopped reading the RHP.
Over the time what I have learnt from Rakesh Jhunjhunwala investment is this.
He has already made crores of rupees.
Now what he does is self promotion.
In any business he feels will do well. Instead of starting same he buys the company shares from promoters at any cheap price. At least his name guarantees good return to the promoter.
Now say he got shares at 14 rupees. And he sell half his holding at 28. He gets his original money back. Plus he have the rest of shares to get him speculative return.
He just have to sit and enjoy the game.
Also here the valuation is not 28 much more than that. More than 30 times his investment.What else to say.
They all have turned Venture Capitalist .I am sure he will sell his holding once the share lists as that's the reason it's come into news he have holdings in it.
Last edited by magnet : 9th December 2010 at 06:10 PM.
At least his name guarantees good return to the promoter.
100% agreed.
Rakesh Jhunjhunwala will get back his invested amount by selling a few shares in the IPO and thus rest of his shares will now have zero cost.
Quote:
Jhunjhunwala will receive more than Rs 20 crore by selling five lakh shares at the higher end of the price band of Rs 400-410 per share, which was equal to the amount he invested in A2Z Maintenance in 2006. The total valuation of his holding in the company stands at Rs 494.09 crore, which means market cap of company will be more than Rs 3,000 crore.
More than half the applicants withdraw their application at 3 PM, I saw an over subscription figure of 1.12 times around 1 PM, now its down to 0.53, Jhunjhunwala magic not working.
I haven't applied for this IPO but would like to know from fellow boarders -
Is it possible to online withdraw application filed via ICICI Direct? If yes how?
If not online, then how to withdraw offline? (question specific for ICICIDirect).
Yes you can, before the issue closes you can, go to ORDER BOOK, click on TRANSACTION ID, you will find the option to withdraw or modify the application, but remember this is only before the issue closes.
Promoter's are issued shares on the basis of the initial capital brought forward by them. As the company grows the company's Net worth grows by the means of accumulated profits (retained earnings). Also expected future growth can lead to a higher forward P/E which may also lead to the shares being priced higher to other investors.
Promoter's can rope in Strategic Investors (like Rakesh Jhunjhunwala in this case) who are offered ownership of the company at the prevalent prices at the time of offer.
By listing in the markets companies provide a liquidity option for existing shareholders/employees to sell their shares.
Just check the bulk deals today. RJ bought back his 500000 shares from open market. Even the promoter Amit Mittal bought 895000 shares.
But, one should not buy shares just because RJ is buying. His time frame is many many years.
I feel that at the CMP, stock is fully valued. I will wait for a level below 280 to buy its shares. The company has huge potential for expansion and its IPO received grade 4. So, this means the company is fundamentally strong.
Just check the bulk deals today. RJ bought back his 500000 shares from open market. Even the promoter Amit Mittal bought 895000 shares.
But, one should not buy shares just because RJ is buying. His time frame is many many years.
I feel that at the CMP, stock is fully valued. I will wait for a level below 280 to buy its shares. The company has huge potential for expansion and its IPO received grade 4. So, this means the company is fundamentally strong.
Point is inspite of their buying, The price went down. Hence the obvious question is who sold the shares? Of course people who might have acquired at less price than the IPO price. (Apart from the NII who might have booked losses ). If some of the promoters have sold it then that should have been reflected in the bulk deal.
If some of the promoters have sold it then that should have been reflected in the bulk deal.
Promoters can't sell for a year now.
None of pre-IPO shares can be sold for next 1 year.
From the RHP:
Quote:
B. Details of Promoter’s contribution locked-in for three years:
Pursuant to Regulation 36 of the ICDR Regulations, at least an aggregate of 20% of the post-Issue shareholding of the Promoter shall be locked-in for a period of three years from the date of Allotment.
Quote:
C. Details of share capital locked-in for one year:
In addition to the Equity Shares proposed to be locked-in as part of the Promoter’s contribution as stated above, the entire pre-Issue equity share capital of the Company will be locked-in for a period of one year from the date of allotment of Equity Shares in the Issue, other than 4,556,193 Equity Shares which are being transferred and sold in the Offer for Sale. Accordingly, [*] Equity Shares representing approximately [*] of the post-Issue paid-up share capital of the Company, will be locked in for a period of one year from the date of Allotment of the Equity Shares in the Issue.
A2Z Maintenance and Engineering Services
Linear Mode
