In today's newspaper speculation is somewhere around 600-620. It haven't been decided yet. Road show starting after that meeting will happened and than it will be decided.
If price band will decide between 580 to 620 then I think it is not attractive. Many investors will skip this FPO with this price band
In fact today it touched lower value of 626 on BSE , We don't know if market may not perform in near future than stock may fall below offer price of FPO @ 620 , Similar like happened in Shipping Corporation of India FPO.
It seems no major benefit on applying , Market price is 621 (lower 618) & offer is of 610 , We don't know what happened in 1 month period , Who will take risk for applying this FPO , I still remember SCI FPO (Offer price 133 , Now trading at 121).
Last edited by niki_baroda : 15th January 2011 at 07:39 PM.
It seems no major benefit on applying , Market price is 621 (lower 618) & offer is of 610 , We don't know what happened in 1 month period , Who will take risk for applying this FPO , I still remember SCI FPO (Offer price 133 , Now trading at 121).
Exactly.
We don't know where this bear run will lead and surely its expensive taking in account the current market sentiments and conditions.
Skipping this issue.
Seems like a greedy issue to get the juice from investors before some major bear run/action happens.
Are you testing your luck here or avoid for you too? .
Definitely an avoid for short-term.
I am not sure about the long-term.
FPO will mean the company will have to come out with an offer document. Once the offer document is available, it will be much easier to analyze the stock. I will surely look at the offer document and post later.
My guess the EPS for tata steel fps should be around 75-76 rs for fy11 taking eps dilution of FPO into account. if we give a stock a modest PE multiple of even 10 then is should trade around 750-760. I guess stock should have PE multiple of 12. So target of around 900-912 based on fy11 eps. This valuation does not even consider fy12 upside. Hence tata steel is definitely buy.
I want to invest in this fpo but want to sell the shares on listing day itself.
I am not interested in holding this stock for long term.
I was thinking about shorting February futures. 500 shares per lot available at 635. I am hoping that the market runs up a bit and I will try to catch a price of 640.
Now, fpo if done at upper price band will be 610. This means that I can get Rs 30 per share.
But, the problem comes in how many shares should I apply for and from how many applications to be sure that over-hedging or under-hedging is tolerable.
From one application, we can go for 320 shares at the maximum.
I hope the retail participation is less than 100% so that I can bid for the exact number of shares.
I am in no mood to hold the shares for long term as the company has large amounts of debt. Also, the company is a cyclical play and current cycle for commodities like steel is good but there is no guarantee about the future.
I hope the retail participation is less than 100% so that I can bid for the exact number of shares.
How can someone predict percentage of retail participation. Also share was trading @ 618 suddenly FPO comes & share now trading @ 640 even though market sentiment is bad, It seems price hike is temporary just to attract for FPO bidding. Also if retail subscription bidding is too high for 2 Lacs of application there are less chances of getting 1 or 2 lot, It always seen that on listing date of any FPO price will fall to @ 5-6% less than normal market price ( like POWERGRID was trading @ 100 fall to 95 , SCI trading @ 144 fall to 136 level ) similarly there are sure shot chances that TATA steel will fall to approx 610 level & if market falls down god knows what may be TATA steel price?
Last edited by niki_baroda : 19th January 2011 at 09:37 PM.
Had there been 5% discount to retail, there would be some interest. With CMP of TATA STEEL being just 4% higher than upper band price of 610, seems to be a very risky play for people looking at listing gains.
I am in no mood to hold the shares for long term as the company has large amounts of debt. Also, the company is a cyclical play and current cycle for commodities like steel is good but there is no guarantee about the future.
Yes.
On standalone basis, Tata Steel is doing well, but the consolidated financials of Tata Steel are still stressed.
Corus is still not making any significant profits. For FY 2010, Tata Steel had reported a loss on consolidated basis.
It's like a horse and an elephant tied together. The horse can only guide the elephant. The elephant may follow it for some time, but if the elephant wants to go in a different direction, there isn't much that the horse can do. .
It's like a horse and an elephant tied together. The horse can only guide the elephant. The elephant may follow it for some time, but if the elephant wants to go in a different direction, there isn't much that the horse can do. .
I used onlinesbi to invest in this IPO. I didn't check the check box "Cut-Off price". Rather I manually entered 610. So if they issue IPO with the price < 610, then would I be able to get that less price or not?
I used onlinesbi to invest in this IPO. I didn't check the check box "Cut-Off price". Rather I manually entered 610. So if they issue IPO with the price < 610, then would I be able to get that less price or not?
Yes, you will get shares, irrespective of the IPO price.
QIB subscription is good for the FPO. Retail response is not positive but that is understandable as most of the retail play for the listing gains only.
Tata Steel FPO subscription Detail- Source: Moneycontrol.com : I was in impression that TATA Stell FPO in retail portion will under subscribe & Company need to declare 5 % discount for retail portion , However still many people applied in last hours .
Sold one Feb Future lot (500 shares) @ 625 and applied three full ASBA application i.e. 960 shares.
Let's see the final figure, If it will be full allotment, then I'll sell One Feb 640 Call @ ~15.
Retail is oversubscribed 1.6 times, but at the same time employee quota is only subscribed 0.06 times. Thus I am anticipating 665 shares to be allotted against three full applications.
Retail is oversubscribed 1.6 times, but at the same time employee quota is only subscribed 0.06 times. Thus I am anticipating 665 shares to be allotted against three full applications.
Looks like people who invested in FPO got decent returns. Couple of days back stock was trading in high 640's.Company is about to issue perpetual bonds of half billion dollar which should be good for company to relieve some of the debt.
Tata Steel FPO
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