‘Avoid’ Tree House Education IPO:Ajcon Global

MUMBAI: Ajcon Global has recommended investors to ‘Avoid’ the initial public offer of Tree House Education. According to the brokerage, due to factors like competition from existing players in the listed space, pre-school industry having low entry barriers, major part of IPO proceeds to be spent on K-12 business where there are already established players with dominant market share, premium valuations in terms of its scale of business and due poor secondary market conditions, the stock would be available at a discount on listing.

The company has entered the capital market to raise between Rs 114-129 crore by issuing shares in the price band of Rs 135-153 per share. Retail investors will get a discount of Rs 6 per share.

It plans to use the proceeds for expansion of pre-school business, acquisition of office space, procurement of exclusivity rights to provide educational services, set-up educational complexes in Rajasthan and Gujarat and for loan repayment.

The issue closes Friday.