IPO Update : FCS Software Solutions Ltd.

Sailing on the IPO Wave for listing gains
FCS has entered the primary markets with a public offer of 35 Lac shares @ Rs. 50 Per share (a premium of Rs. 40 on face value of Rs. 10 )
Investment Guru recommends investors to ride on the IPO wave and apply for the IPO to get listing gains. The IPO is expected to generate listing gains in range of 30-50% mainly due to the IPO boom going on in the markets. Another reason being low float that will lead to good listing. Other factor is that 50% of the issue will be alloted to retail investors and this may also lead to spurt on listing day in the price of the stock.
The company has released limited applications resulting in scarcity of the application forms for this IPO.
About the company
FCS claims to be a leading provider of IT services. However the company can be termed to be a small player in the software service consulting space. The company is into fields of E-learning and digital consulting, IT Consulting, Product engineering services and application support.

The issue proceeds will be use to create IT infrastructure to for addding 300 software developres.

The company is promoted by Dalip Kumar , who looks reasonably qualified to take on the company, however, does not have any big feather in his cap.

The company has declared 0.25% dividend during last five years

The company is heavily dependent on US for its business and hence any negative turn of events in US directly impacts its revenues, for example the Sep11 blasts made a big dent in the performance of the company in year 2002-03.

Being a small player in a business which gives preference to the large players , the company would have tough competition in order to grow itself.

The offers comes at a P/E of 6 which looks reasonable and hence offers a scope for listing gains for investors.
Issue Closes : 26-Aug-2005.