They could have tried 20-22 something. I find it like fooling people to apply for this ipo anyhow saying FV to be 10 so it's cheaply available. Also right now the company is loss making so I seriously doubt it will provide any listing gains.On contrary I feel on listing date it will go 20-30% low as all will apply for listing gain and will exit (personal opinion).
Also because of Muthoot IPO there haven't been any money left with me and applying for 1-2 lot and if it has heavy QIB demand won't provide any shares to me I feel. I'll wait and watch.
They could have tried 20-22 something. I find it like fooling people to apply for this ipo anyhow saying FV to be 10 so it's cheaply available. Also right now the company is loss making so I seriously doubt it will provide any listing gains. On contrary I feel on listing date it will go 20-30% low as all will apply for listing gain and will exit (personal opinion).
Also because of Muthoot IPO there haven't been any money left with me and applying for 1-2 lot and if it has heavy QIB demand won't provide any shares to me I feel. I'll wait and watch.
It's not just about the face value. The book value is little less than 10.
For many years, the promoters have been infusing capital into the company at Rs 10 per share.
In short, promoters are issuing the shares at the same rate at which they got the shares.
At Rs 11 per share, applicants will be paying 10% more than what the promoters paid.
This IPO is of significant size - Rs 750 crore. Even those who apply for a few lots may get some shares.
In my opinion, the stock is unlikely to go much below Rs 10 in the medium-term.
Diversified, but mainly into on retail businesses.
The company is more like a holding company with interests in
- Apparel and fashion.
- Home products like furniture, accessories etc.
- Food processing.
- FMCG.
- Rural distribution of agricultural and consumer products.
The company also has minority interest in Amar Chitra Katha Private Limited and a small holding in SSIPL Retail Limited.
SSIPL is retailer of footwear including Nike products.
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The three main investments of Future Ventures India are:
Aadhaar Retailing (Rs 77 crore as on 31st December 2010).
Aadhaar Retailing is the rural distribution business of Future Ventures India.
From the RHP:
Quote:
ARL is in the business of rural and semi-urban retail distribution of agricultural and consumer products for personal and household use, including apparel, seeds, fertilizers and FMCG products. ARL is proposing to establish franchisee outlets under "hub and spoke" model with existing centers to serve as hubs and the franchisees working as a spoke.
Future Consumer Enterprises Limited (Rs 160 crore as on 31st December 2010).
Future Consumer Enterprises Limited is the FMCG arm of Future Ventures India.
From the RHP:
Quote:
Future Consumer Enterprises Limited is engaged in product development, designing, branding and distribution of FMCG products under brands such as "Tasty Treat", "Clean Mate", "Care Mate", "Premium Harvest" and "Fresh and Pure". FCEL currently markets its products through stores owned by the Future Group, such as Big Bazaar, Food Bazaar, KB Fairprice and Aadhaar.
Indus League Clothing (Rs 383 crore as on 31st December 2010).
Indus League Clothing is into manufacturing and retailing of garments.
Besides its own brands Indus League Clothing also owns 100% of "Lee Cooper" and 49.99% of "Celio Future Fashion".
From the RHP:
Quote:
Indus-League is an established designer, manufacturer and retailer of ready-made garments. It retails its products through the brands; "Indigo Nation", "John Miller", "Scullers", "Urbana", "Urban Yoga", "Contra" and "Jealous". Indus-League has market presence in India, Sri Lanka, Middle East Asia, United Arab Emirates and Bahrain.
Quote:
Celio was incorporated as a joint venture between Celio International, a France based men’s apparel and accessories retailer, and Indus-League Clothing Limited (a Future Group entity), to retail men’s apparel and accessories in the Indian market.
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There is no clarity on what the company will do with the IPO proceeds.
That is one significant risk.
The RHP says only this:
Quote:
In accordance with the business objectives and strategy of the Company as described in this Red Herring Prospectus, the Company seeks to create, build, invest in or acquire, and operate innovative and emerging businesses in India’s rapidly growing “consumption-led” sectors, which it defines as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits.
QIB didn't look to subscribe completely. But NII oversubscribed by 5 times. So confused whether anyone applying for listing gains?
HNIs can't support big issues on listing. Only institutional demand can support large issues.
Don't apply if you can't hold for the long-term.
Looking at the QIB subscription figure, I am not sure whether the stock will list at a premium or not.
If the stock goes down more than 20% on listing, I may buy a few shares. (I am not saying that the stock will collapse on listing, I am only saying that in case it does fall sharply, I will buy).
...
If the stock goes down more than 20% on listing, I may buy a few shares. (I am not saying that the stock will collapse on listing, I am only saying that in case it does fall sharply, I will buy).
Stock is down over 15% now. Will you be buying if it goes below Rs. 8.00?
Can we buy some around 8.3 for medium to long term and what is the good price of the stock based on valuation?
Investing in this company is like investing in a non-existing business.
There is no value of such a business.
Even though the businesses of Future Ventures do exist, the business are generating little revenues and thus they are as good as non-existing businesses.
That's what I said in the post #1.
Quote:
For long-term investors, I can only say this:
This is a long-term story. Currently the businesses are hardly generating any profits.
If you believe in Kishore Biyani, if you think Biyani is good at creating retail businesses and you trust him, then invest in this company.
If you doubt his capabilities or don't trust him, stay away from this IPO and this stock.
The value of this company comes only from the money that has been invested in it - the book value.
If these businesses of the company fail to make as much money as the equity investors expect them to, the stock may go down much below book value too.
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Retailing in a very difficult business to be in. The market has already seen companies like Koutons and Vishal Retail collapse.
I guess that was one reason why institutions stayed away from Future Ventures IPO.
It is unlikely that suddenly institutions will become interested in this stock and start buying it.
I expect the stock to remain range-bound till the company starts showing progress.
My guess is that the stock will languish in the 7.00-9.50 range for 1-2 quarters.
What happens after that will depend on what the company does with the IPO money.
Future Ventures India IPO
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