CARE IPO -
Price Band: Rs. 700 - Rs. 750.
Retail Discount : NA .
Face Value: Rs.10.
Minimum Lot Size: 50 Shares.
Issue opens on: 07th December 2012, Friday.
Issue closes on: 11th December 2012, Tuesday.
Listing Date on: by 21st December 2012.
Total No. of Shares offered: 71,99,700 shares or 25.22 %
Employee Reservation: NA.
Net Public Offer: 6,61,15,000 shares.
QIB Book: 35,99,850 shares or 50 % of issue.
Non – Institutional Bidders: 10,79,955 shares or 15 % of issue.
Retail Book: 25,19,895 shares or 35 % of issue.
Equity Shares outstanding prior Issue: 2,85,52,812 shares.
Equity Shares outstanding post Issue: 2,85,52,812 shares.
Total Size of the Issue: Rs. 503.97 Crs - Rs. 539.97 Cr.
IPO GRADING: Exempted for Grading by SEBI.
CREDIT ANALYSIS AND RESEARCH LIMITED : Credit Analysis & Research Ltd (CARE) was incorporated in 1993. CARE is the second largest full service credit rating company among six players in India. They offer rating and grading services across a diverse range of instrument and industries including IPO grading and grading of various types of enterprises.
Valuations:
The company has fixed the price band at Rs. 700-750 per share. Based on FY12 annual EPS of Rs. 40.55, CARE will be trading at P/E range of 17.27 x to 18.5 x. This is at a significant discount to peers like ICRA & CRISIL which are trading at 27 x and 35 x respectively. For FY12 the consolidated revenues from operation stood at Rs. 190 Cr with Net Profit of Rs. 116 Cr resulting in Net Margin of 61.05 % with EPS of Rs. 40.55 CARE has consistently maintained high PAT margin of 53 % with strong ROE of 34 %. It is a debt free company. 85 % of its revenue comes from ratings business. At the IPO price the P/E is in range of 17.27 x to 18.5 x & P/B is in the range of 5.3 x to 5.6 x. Net worth o the company as on 3oth September 2012 is Rs. 427 Cr with Book Value of Rs. 149/share. Company has cash equivalents of Rs. 260 Cr. CARE is expected to post FY13 profit of around Rs. 100 Cr which can lead to EPS of close to Rs. 35.
Retail Investors can subscribe up to maximum of Rs. 2,00,000 per application. CARE has strong financial position and is high cash-generating business and which is available at very reasonable valuations.
According to me one should look for subscribing for CARE IPO, having 85 % o its revenue coming from rating business which earns better margins is thus being offered to public at very attractive valuation. CARE will be third listed company after CRISIL & ICRA - the rating agencies India Ratings (formerly Fitch), Brickworks & SME rating are unlisted. CARE can have Market Cap of around Rs. 2,141.46 Cr with cash of Rs. 260 Cr which brings its Enterprise Value of around Rs. 1,881.46 Cr at an Upper band of Rs. 750.
Thus, with attractive pricing & strong fundamentals with good institutional holdings the Long term investors should look into subscribing the IPO for good opportunity. Short term investor can subscribe for listing gains Visit www.bhavikkshah.blogspot.in
Listed Share TCFC Limited has sizable holding in CARE Limited.With CARE public issue there could a big value unlocking for TCFC Limited,
ReplyDeleteThe Ruias-owned Essar Steel, which is reeling under a debt burden of R23,500 crore, has asked its board to explore the possibilities of raising up to R3,000 crore via convertible debt instruments from domestic and overseas markets.
ReplyDeleteThe decision to this effect was taken at the company's annual general meeting on October 20, according to the filing with the registrar of companies.
“The company is looking at various alternatives in India and in international markets for long-term fund raising through equity, bond or any other form of hybrid securities to replace its high cost debts,” Essar Steel said in the filing.
“The modalities of such issues are under consideration of the management,” the filing added. “The company is approaching various agencies, investors and financial institutions for the purpose".
In 2011-12, the company completed its expansion of the Hazira steel plant to 10 million tonne per annum. However, the expansion has taken its toll on the company. The company’s interest costs rose 68% to R2,235 crore as the company made a loss of R1,251 crore.
Net sales for the company during the fiscal stood at R16,056 crore.
In total, Essar Steel has invested R37,500 crore at its Hazira plant since 1989. The plant that produced 7 million tonne of flat steel in 2011-12 is expected to reach its full capacity by 2013-14.
“At 10 million tonne capacity, this facility will generate R40,000 crore as revenues,” said Prashant Ruia, group chief executive, Essar Group in January, when