Emkay recommends 'Subscribe' to MOIL IPO

MUMBAI: Emkay Global Financial Services has advised investors to ‘Subscribe’ to the initial public offering of Manganese Ore India. The brokerage expects 40 per cent potential upside in it.

“MOIL is the largest manganese ore producer in India, contributing 50% of the total domestic production. Globally it ranks fifth among all the manganese producers.

The company is among the lowest cost manganese ore producers with an EBITDA margin of ~70% during H1FY11. It has ~22 mt of good quality manganese ore reserves

MOIL is a debt free company with net cash of Rs 105 per share during H1FY11. The company has a planned capex of Rs 7680 million to ramp up its capacity to 1.5 mtpa by FY16

At the upper band of Rs 375, the stock looks attractively valued with potential upside of 40% on 6x FY12E EV/ EBITDA basis,” the report said.