Subscribe to Gujarat Pipavav Port IPO: Angel
The company entered the capital market on Monday with public issue to raise Rs 500 crore through fresh issue of 10.4-11.9 crore shares.
By ET Bureau |
MUMBAI: Angel Broking has recommended investors to ‘subscribe’ to initial public offering of Gujarat Pipavav Port.
The company entered the capital market Monday with public issue to raise Rs 500 crore through fresh issue of 10.4-11.9 crore shares in the price band of Rs 42-48 per share.
“At the lower band of Rs 42, GPPL trades at a premium to its global peers at 2.5x CY2011E P/BV v/s 2.0x respectively. We believe that GPPL comes off a low base compared to some established ports and to that extent the growth should command a premium.
On the domestic front, the company is trading at a substantial discount to the Mundra port, which trades at 5.9x FY2012E P/BV. We believe that GPPL's discount to Mundra port is justified given the latter's larger scale of operations, revenue from its SEZ and higher profitability growth.
However, given GPPL's high growth potential we believe that the 57% discount is unwarranted. Hence, we recommend Subscribe to the IPO at the lower price band with a long-term perspective,” the report said.
The issue proceeds would be utilised for prepayment of loans, capital expenditure, purchase of capital equipment and general corporate purpose.
The company entered the capital market Monday with public issue to raise Rs 500 crore through fresh issue of 10.4-11.9 crore shares in the price band of Rs 42-48 per share.
“At the lower band of Rs 42, GPPL trades at a premium to its global peers at 2.5x CY2011E P/BV v/s 2.0x respectively. We believe that GPPL comes off a low base compared to some established ports and to that extent the growth should command a premium.
On the domestic front, the company is trading at a substantial discount to the Mundra port, which trades at 5.9x FY2012E P/BV. We believe that GPPL's discount to Mundra port is justified given the latter's larger scale of operations, revenue from its SEZ and higher profitability growth.
However, given GPPL's high growth potential we believe that the 57% discount is unwarranted. Hence, we recommend Subscribe to the IPO at the lower price band with a long-term perspective,” the report said.
The issue proceeds would be utilised for prepayment of loans, capital expenditure, purchase of capital equipment and general corporate purpose.
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