Pipavav IPO subscribed 1.65 times
Pipavav Shipyard Ltd’s initial public offering of 8,54,50,225 equity shares, including anchor investor portion up to 1,52,72,950 shares, was subscribed 1.65 times as at 3:00 pm on Wednesday.
By ET Bureau |
MUMBAI: Pipavav Shipyard Ltd���s initial public offering of 8,54,50,225 equity shares, including anchor investor portion up to 1,52,72,950 shares, was subscribed 1.65 times as at 3:00 pm on Wednesday.
The issue has so far received bids for 11,60,09,080 shares against the total issue size of 7,01,77,275. Of these, bids for 1,20,22,780 shares were received at the cut-off price.
Brokerage Recommendations
KR Choksey says there is lack of information with regards to the operating and financial performance of Pipavav, as it commenced operations only at the beginning of this fiscal year. The brokerage says it would be unfair to assume that the financial performance of Pipavav would be in-line with established players like ABG Shipyard and Bharati Shipyard and at the Rs 55-60 per share, the stock would trade at higher valuations.
Anand Rathi Securities believes Pipavav is a good investment for 2-3 years, but listing gains are doubtful. The fact that any revenue to company will be visible only in 2010-11, the price range of Rs 55-60 per share looks bit aggressive.
According to HDFC Securities, Pipavav seems expensive in the given price band of Rs 55-60 compared to established and revenue earning players like Bharati Shipyard and ABG Shipyard, on price to book value (Rs 21.63 as on March 31, 2009), price to earnings and market cap to orderbook basis. However, given the large capacity of 4,00,000 DWT (largest shipyard capacity in India), focus to service the defence sector, diversified businesses of offshore and fabrication along with SEZ & EOU, the company holds a decent opportunity only in the long run.
The issue has so far received bids for 11,60,09,080 shares against the total issue size of 7,01,77,275. Of these, bids for 1,20,22,780 shares were received at the cut-off price.
Brokerage Recommendations
KR Choksey says there is lack of information with regards to the operating and financial performance of Pipavav, as it commenced operations only at the beginning of this fiscal year. The brokerage says it would be unfair to assume that the financial performance of Pipavav would be in-line with established players like ABG Shipyard and Bharati Shipyard and at the Rs 55-60 per share, the stock would trade at higher valuations.
Anand Rathi Securities believes Pipavav is a good investment for 2-3 years, but listing gains are doubtful. The fact that any revenue to company will be visible only in 2010-11, the price range of Rs 55-60 per share looks bit aggressive.
According to HDFC Securities, Pipavav seems expensive in the given price band of Rs 55-60 compared to established and revenue earning players like Bharati Shipyard and ABG Shipyard, on price to book value (Rs 21.63 as on March 31, 2009), price to earnings and market cap to orderbook basis. However, given the large capacity of 4,00,000 DWT (largest shipyard capacity in India), focus to service the defence sector, diversified businesses of offshore and fabrication along with SEZ & EOU, the company holds a decent opportunity only in the long run.
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