Ravi Kumar Distilleries IPO

Another tiny IPO.

Opens: 8th December 2010.
Closes: 10th December 2010.

IPO Size: 1.15 crore shares.

Price Band: 56-64.

At Rs 64/share, the IPO would raise Rs 73.60 crore.

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Valuations appear high as per this report :

Ravi Kumar Distilleries Valuations being asked for are unheard | AK57.

Considering IPO dilution, the company will achieve an eps of around Rs 1 for FY 2010.

Assuming the IPO gets done at Rs 64/share, post-IPO the company will have Rs 30.67 per share.

Pre-IPO: 1,25,00,000 Equity shares.

Post-IPO: 2,40,00,000 Equity shares.

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Basically, what the promoters are doing is that they are raising cash for a massive capacity expansion.

The current networth of the company is just Rs 15.25 crore.

Another 73.6 crore will be raised for the public.

This money will be used to expand the capacity from 14,25,000 cases/month to 30,00,000 cases/month and modernization of the existing plant.

If the expansion goes as planned and earnings improve, both promoters and IPO investors will benefit.

If things don't go as planned, promoters don't have much to lose - the current networth of the company is just Rs 15 crore.

The company's eps may go up to Rs 3 or Rs 4 if the expansion is completed smoothly and the extra capacity is utilized fully.

Even then the price of 64 would be considered expensive.

There is great risk and little reward in this IPO.

I am skipping this for sure.

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Good listing for RKDL. High Risk and High Return

Totally reverse trend of high listing, all experts say no for this issue , However it had given good return on listing even better than MOIL (32% , High consistent so far up to 1 pm).

and even more that if someone had applied for 2 lac, he would have made around 40k today .

What are the strong points that buyers are available at 82 price which is 32 % higher than IPO offer, This issue was also not subscribed too much, Who are buying now those have not applied even at IPO stage?

I guess its an operator manipulation because of its tiny size.

All technical and fundamental analyst advice us to avoid this IPO . But surprisingly it gives good allotments and good return on listing day. Not run manganese or Rakesh Jhunjhunwala's factor, very good run wine factor.

Have you applied & got profit or any other Members of E-Investing applied for this IPO & earned decent profit?