IPO is a way a Company uses money that it
doesn't have (for bigger projects or expansion). In a way, it shifts its money
from future to present, hoping it would have made enough money in the future to
pay back the loan taken from it’s investors; and an investor shifts his money
from present to future; like Government uses Bonds and Bills or an individual
uses Loan for education or personal use like to buy a car, house, etc.
Some of the IPOs that hit the street during the past one year generated more than 300% returns.
The only thing to keep in mind
is to make sure that the IPO you are investing (or trading) in is not coming
public for share dilution or to get rid of it’s losses; because if the Company
is taking additional capital to not grow or expand, then there will be no
improvement in the value of stock and no ROE would be generated in the long or
short run.
A Company’s prospectus is a legal declaration with
transparency standards, with certain facts and statements included to ensure
investors aren't misled in any way, should be read before investing.
Here is the list of IPOs that will be coming up this year.
1.
Lodha Developers
2.
Snapdeal
3.
Jabong
4.
HomeShop18
5.
UTI MF
6.
Thyrocare
7.
Lavasa
8.
Infibeam
9.
Amalgamated Bean Coffee (CCD/Cafe
Coffee Day's parent company)
10.
IndiGo
Also, if anyone is comparing the IPOs of 2008 and 2010 with IPOs of this year, would be making a big mistake... as 2008 and 2010 were Bearish markets and 2014, luckily, is a Bullish market; therefore, very much capable of taking an IPO at a much higher peak and giving better returns for anyone who wants to book profit and get higher returns.
In a Bullish Market, Greed dominates; Fear dominates Bearish Markets.
An investor is ready to think irrationally a little, ready to pay highe = increasing the value of a stock.
Lodha Developers
The developer has several firsts to its credit. Currently in the process of constructing the world’s tallest residential building (World One), a 117-storey tower in Lower Parel, Mumbai, Lodha also struck India’s costliest land deal when it bought a Mumbai plot for Rs 4,000 crore in 2010; in partnership with Donald Trump’s company.
The company is planning an IPO in which it may sell 10 percent stake for a cost of Rs 6,000 crore (USD 1 billion), Mint reported recently, even though the management denied any such plans were in the offing.
If it goes through, this should make Lodha India’s most valued firm at Rs 60,000 crore, eclipsing past DLF, which currently enjoys a market capitalization of about Rs 38,000 crore.
Lodha notched up sales of Rs 9,000 crore in FY13, Mint said quoting Bloomberg data, even as rival DLF’s sales stood at Rs 7,770 crore in the same year.
(I give this one 7/10 as it apparently, needs money for its project)
IndiGo
Budget airline carrier IndiGo, the only aviation company in the country that has stayed consistently profitable, plans an IPO worth up to Rs 2,400 crore (USD 400 million), Financial Express reported recently quoting sources.
The newspaper added that the carrier will likely be listed next year, subject to market conditions, even as merchant bankers had been appointed to manage the issue.
The company has defied market trends by consistently eking out profits in an industry that posted a cumulative loss of about Rs 7,800 crore (USD 1.3 billion) in FY14, according to aviation consultancy CAPA.
IndiGo held a 32 percent market share in the Indian aviation industry followed by rival national carriers Jet Airways (21.8 percent), Air India (18.3 percent), SpiceJet (17.9 percent), GoAir (9.5 percent) and regional airline AirCosta (0.8 percent), as per April 2014 figures.
Amalgamated Bean Coffee
Parent of the popular Café Coffee Day, Amalgamated Bean Coffee Trading Company is planning an IPO that will likely the coffee shop at about Rs 6,000 crore (USD 1 billion), Bloomberg recently reported quoting sources.
CCD, India’s largest coffee-shop chain, has 1,650 outlets, more than three times its competitors combined, and has 64 percent market share in the sector that grew at Rs 1,680 crore.
Italy’s Barista, UK’s Costa Coffee, US’ Starbucks and Australia’s Gloria Jean’s Coffee are competitors to CCD.
(My take is the IPO is to settle it’s current losses and therefore is not a very lucrative investment.)
Infibeam
Ahmedabad-based Infibeam, which runs a popular online-shopping portal is looking to list its shares in the next three quarters and has appointed merchant bankers for the same, the Economic Times reported recently.
The issue is expected to fetch Rs 500-600 crore, in a 20 percent dilution that values the firm at Rs 2,500-3,000 crore.
Infibeam, which, according to ET, recently broke even, competes with larger rivals such as homegrown Flipkart and Snapdeal and international giant Amazon in India’s fledgling e-commerce industry.
Among other firms that are considering coming out with an IPO include Flipkart, Snapdeal and Jabong while HomeShop18 has filed documents to list on the New York Stock Exchange.
Lavasa
The real estate arm of construction firm HCC has already filed IPO documents with Securities and Exchange Board of India for an issue that will raise Rs 750 crore for the firm.
This is the second time the company is looking to list its shares, after an aborted attempt in 2010 due to poor market conditions existing back then.
Lavasa, which is developing an integrated hill city near Pune, will offer some discounts on its pricing to retail investors, according to documents filed with the regulator.
Axis Capital, Kotak Mahindra Capital and ICICI Securities are bankers to the issue.
Thyrocare
Diagnostics labs Thyrocare is expected to launch its IPO in February 2015, in a 25 percent stake sale that will value the firm at about Rs 2,000 crore, according to a report in the Business Standard.
Private equity firms CX Partners and Norwest Venture Partners had picked up 30 percent stake (at Rs 188 crore) and 10 percent stake (at Rs 120 crore) in Thyrocare, respectively, in the years 2010 and 2012, according to the newspaper.
If CX chooses to exit its entire stake via the share sale, it could fetch it returns up to three times in about five years.
Thyrocare has revenues of Rs 160 crore and competes with SRL, Metropolis and Dr Lal Path Labs in the diagnostic market that is slated to grow to Rs 20,000 crore by 2015, even though most of the market is cornered by unorganized players.
UTI MF
India’s fifth-largest mutual fund shop (by assets under management) by may be looking to list its shares, in a deal that may value that asset management company at Rs 4,000 crore.
A report in the Financial Express claimed that the asset manager, which was once looking to list its shares in 2008 (later postponed) could provide a partial exit to public sector entities SBI, Punjab National Bank, Bank of Baroda and Life Insurance Corporation that own 18.5 percent each in the AMC.
Deals carried out in the past suggest fund companies are valued at about 6 percent of AUM for equity assets and 3 percent for debt assets.
In total, UTI MF managed Rs 79,441 crore of assets at the end of the June quarter, AMFI data showed, with HDFC MF, ICICI MF, Reliance MF and Birla Sun Life MF leading the way.
In a Bullish Market, Greed dominates; Fear dominates Bearish Markets.
An investor is ready to think irrationally a little, ready to pay highe = increasing the value of a stock.
Lodha Developers
The developer has several firsts to its credit. Currently in the process of constructing the world’s tallest residential building (World One), a 117-storey tower in Lower Parel, Mumbai, Lodha also struck India’s costliest land deal when it bought a Mumbai plot for Rs 4,000 crore in 2010; in partnership with Donald Trump’s company.
The company is planning an IPO in which it may sell 10 percent stake for a cost of Rs 6,000 crore (USD 1 billion), Mint reported recently, even though the management denied any such plans were in the offing.
If it goes through, this should make Lodha India’s most valued firm at Rs 60,000 crore, eclipsing past DLF, which currently enjoys a market capitalization of about Rs 38,000 crore.
Lodha notched up sales of Rs 9,000 crore in FY13, Mint said quoting Bloomberg data, even as rival DLF’s sales stood at Rs 7,770 crore in the same year.
(I give this one 7/10 as it apparently, needs money for its project)
IndiGo
Budget airline carrier IndiGo, the only aviation company in the country that has stayed consistently profitable, plans an IPO worth up to Rs 2,400 crore (USD 400 million), Financial Express reported recently quoting sources.
The newspaper added that the carrier will likely be listed next year, subject to market conditions, even as merchant bankers had been appointed to manage the issue.
The company has defied market trends by consistently eking out profits in an industry that posted a cumulative loss of about Rs 7,800 crore (USD 1.3 billion) in FY14, according to aviation consultancy CAPA.
IndiGo held a 32 percent market share in the Indian aviation industry followed by rival national carriers Jet Airways (21.8 percent), Air India (18.3 percent), SpiceJet (17.9 percent), GoAir (9.5 percent) and regional airline AirCosta (0.8 percent), as per April 2014 figures.
Amalgamated Bean Coffee
Parent of the popular Café Coffee Day, Amalgamated Bean Coffee Trading Company is planning an IPO that will likely the coffee shop at about Rs 6,000 crore (USD 1 billion), Bloomberg recently reported quoting sources.
CCD, India’s largest coffee-shop chain, has 1,650 outlets, more than three times its competitors combined, and has 64 percent market share in the sector that grew at Rs 1,680 crore.
Italy’s Barista, UK’s Costa Coffee, US’ Starbucks and Australia’s Gloria Jean’s Coffee are competitors to CCD.
(My take is the IPO is to settle it’s current losses and therefore is not a very lucrative investment.)
Infibeam
Ahmedabad-based Infibeam, which runs a popular online-shopping portal is looking to list its shares in the next three quarters and has appointed merchant bankers for the same, the Economic Times reported recently.
The issue is expected to fetch Rs 500-600 crore, in a 20 percent dilution that values the firm at Rs 2,500-3,000 crore.
Infibeam, which, according to ET, recently broke even, competes with larger rivals such as homegrown Flipkart and Snapdeal and international giant Amazon in India’s fledgling e-commerce industry.
Among other firms that are considering coming out with an IPO include Flipkart, Snapdeal and Jabong while HomeShop18 has filed documents to list on the New York Stock Exchange.
Lavasa
The real estate arm of construction firm HCC has already filed IPO documents with Securities and Exchange Board of India for an issue that will raise Rs 750 crore for the firm.
This is the second time the company is looking to list its shares, after an aborted attempt in 2010 due to poor market conditions existing back then.
Lavasa, which is developing an integrated hill city near Pune, will offer some discounts on its pricing to retail investors, according to documents filed with the regulator.
Axis Capital, Kotak Mahindra Capital and ICICI Securities are bankers to the issue.
Thyrocare
Diagnostics labs Thyrocare is expected to launch its IPO in February 2015, in a 25 percent stake sale that will value the firm at about Rs 2,000 crore, according to a report in the Business Standard.
Private equity firms CX Partners and Norwest Venture Partners had picked up 30 percent stake (at Rs 188 crore) and 10 percent stake (at Rs 120 crore) in Thyrocare, respectively, in the years 2010 and 2012, according to the newspaper.
If CX chooses to exit its entire stake via the share sale, it could fetch it returns up to three times in about five years.
Thyrocare has revenues of Rs 160 crore and competes with SRL, Metropolis and Dr Lal Path Labs in the diagnostic market that is slated to grow to Rs 20,000 crore by 2015, even though most of the market is cornered by unorganized players.
UTI MF
India’s fifth-largest mutual fund shop (by assets under management) by may be looking to list its shares, in a deal that may value that asset management company at Rs 4,000 crore.
A report in the Financial Express claimed that the asset manager, which was once looking to list its shares in 2008 (later postponed) could provide a partial exit to public sector entities SBI, Punjab National Bank, Bank of Baroda and Life Insurance Corporation that own 18.5 percent each in the AMC.
Deals carried out in the past suggest fund companies are valued at about 6 percent of AUM for equity assets and 3 percent for debt assets.
In total, UTI MF managed Rs 79,441 crore of assets at the end of the June quarter, AMFI data showed, with HDFC MF, ICICI MF, Reliance MF and Birla Sun Life MF leading the way.
Also read:
Investopedia: Interpreting IPO Prospectus Report
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Disclaimer: Opinions are entirely personal and Investors are requested to take the advice of a qualified Investment Advisor before making any investment.
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Disclaimer: Opinions are entirely personal and Investors are requested to take the advice of a qualified Investment Advisor before making any investment.
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ReplyDeleteHa! I followed the link to your blog from Tinder, is this a new method of driving traffic to it? I wouldn't mind subscribing, in exchange for a date :P In all seriousness though, this was a pretty nice read. (Oops, removed my earlier comment by mistake)
ReplyDelete