Avoid Fatpipe Networks IPO, says Hem Securities
Hem Securities has advised investors to “Avoid” the initial public offering of Fatpipe Networks.
By ET Bureau |
MUMBAI: Hem Securities has advised investors to “Avoid” the initial public offering of Fatpipe Networks.
“The company is bringing the issue at price band of Rs 82-85 per share which will have the P/E multiple of 22-23 on post issue annualized EPS of Rs 3.69 (on higher band of Rs 85/share). During the 9MFY10 the intangible assets contribute major part of gross block of company which is a cause of concern.
Also, the company is presently exposed to risk of stiff competition level in industry. Hence looking at all the above factors along with the high valuations at which company is bringing the issue, we recommend investor to Avoid the issue,” the report said.
Fatpipe Networks has entered the capital markets to raise Rs 49 crore through 100 per cent book building process. The price band of the issue is fixed at Rs 82-85 per share.
The proceeds will be used to expand the product line with enhanced research and development activities specifically for development of new product-lines, to establish 16 new marketing offices across the globe including additional offices in the USA, for strategic acquisition of business/ company and to meet margin money for working capital requirement.
The issue has received a lukewarm response from the investors. As on June 10 till 11 am, the issue was subscribed 0.32 times. The issue closes Wednesday
“The company is bringing the issue at price band of Rs 82-85 per share which will have the P/E multiple of 22-23 on post issue annualized EPS of Rs 3.69 (on higher band of Rs 85/share). During the 9MFY10 the intangible assets contribute major part of gross block of company which is a cause of concern.
Also, the company is presently exposed to risk of stiff competition level in industry. Hence looking at all the above factors along with the high valuations at which company is bringing the issue, we recommend investor to Avoid the issue,” the report said.
Fatpipe Networks has entered the capital markets to raise Rs 49 crore through 100 per cent book building process. The price band of the issue is fixed at Rs 82-85 per share.
The proceeds will be used to expand the product line with enhanced research and development activities specifically for development of new product-lines, to establish 16 new marketing offices across the globe including additional offices in the USA, for strategic acquisition of business/ company and to meet margin money for working capital requirement.
The issue has received a lukewarm response from the investors. As on June 10 till 11 am, the issue was subscribed 0.32 times. The issue closes Wednesday
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