IPO Update: Suzlon Energy

Suzlon, Leave something for Investors !

Suzlon energy has entered the capital markets with an issue of 2.93 crore shares of Rs. 10 each at a price band of Rs.425 – 510.

Investment Guru is of opinion that the issue is priced very aggresively by the company and hence lefts very less on the plate for Investors from fundamental prespective. However, with IPO boom going on in the markets it would not be a surprise if the issue rolls out some listing gains. Those who are interested in applying are advised to apply maximum of two times their expectation of allotment. From valuation perspective, the issue is worth avoiding.

However from the subscription patterns till date, there has been huge subscription from FII”s. Retail Investors are missing from the show and against an allocation of 86 Lac shares, applications for only 92,000 shares has been received.

Let’s Dig into the company:

The object of the issue is to fund the expansion plans, capitalisation of subsidiaries, construction of new corporate office, Redemption of preference shares and exploring growth opportunities.

Suzlon is a Total wind power solutions company. The company is India’s largest in its class and ranks among top ten in the world.

The company clocked a turnover of 1965 crores durting FY05, registering an increase of 125% over previous year.

The net profit of the company stood at 365 crores for FY05, a 151% increase over pervious year.

The issue comes at a FY05 P/E of 34. If we take the weighted average EPS of last three years, the issue comes at a P/E of 52.

The company considers companies like ABB, Siemens, BHEL and NEPC as its peer and the the peer Group average P/E comes to 29.

The company has Book Value of Rs.93 per share. Hence the issue comes at 5.48 times the Book Value.

Registrar: Karvy
Issue opens: 23-Sep-2005
Issue closes: 29-Sep-2005

25 comments:

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Anonymous said...

I agree with you. The issue is definitely overpriced. The promoters have become greedy seeing the IPO boom.Everybody wants to eat as much as possible.

Anil Kumar said...

Could you please let me know what is the stock code in icici direct for Gujarat Ambuja Cement.

thanks

Anonymous said...

GUJAMB

Anonymous said...

i am having SGN Telecom which is always going down... any suggestion from ur end

Anonymous said...

i also have Mphasis BFL, Escorts, SQL Star.... any idea... will they go up or not... need ur feedback

Rajesh Soni said...

Hi Anonymous,
I do not track SGN Telecom.
Will try to get some info for you.

Rajesh Soni said...

Hi Anonymous,
MPhasis BFL has been a laggard in the current bull run.
However, the long term prospectus are good. I would adivice a hold.
I do not track SQL and escorts.

Anonymous said...

thanx Rajesh.... but please give me some information about SGN Telecoms SURELY... thanx one again

Anonymous said...

Hi Rajesh,

I hold few shares of Tata Chemicals at 200 CMP. What do you think about it?? Shall I hold them??

adarsh said...

Hello sir this is adarsh.One day u send me one comment on my article.I am sending this message because now i got recruited in a company called Continuous Computing(CCPU)(Campus Placement) in b'lore.I really like your articles.But i don't know more about marketing,financing share etc.So my next plan is to read ur article and understanding the concept behind it.

Rajesh Soni said...

Tata chemocal is a good stock. However, you have enetered the stock at little higher levels. I would advice you to hold it for a period of at least 6 months to get a good appreciation from this stock.

Rajesh Soni said...

Hi Adarsh, Welcome to the Investment Guru Blog !
Congrats on your news job. Yes, It is very important to have a understanding of the markets before Investing.
I hope you will find the blog useful.

Narendra said...

Hi Rajesh,

I have bought,
1. Uniflex (at 26)
2. Hindalco (at 150.35)
3. IDFC (at 70.25)

Can you please tell me the prospects of these companies and is it good to hold for a long time?

Regards,
Narendra

Rajesh Soni said...

Hindalco and IDFC are excellent buys, but do not expect overnight profits in these companies. I would recommend you to hold these stocks. These are medium to long term investments. My target for Hindalco is 180 within 4-6 months and IDFC at 90 within 6 months.
I do not track uniflex.

Narendra said...

Thanks Rajesh, for the answer and boosting my morale!
I have one more question.
I had bought Vishal Exports (before the split)
After the split, it went up for few sessions and after that it has been constantly on a downtrend!
My average cost price is Rs.10.8 and today it has fallen to Rs.8.2!

So, what is your suggestion on this?
Is it good to hold for long term?

Regards,
Narendra

Narendra said...

I forgot to ask one question on Hindalco.
It has announced rights issue.
So, I wanted to know more about it and how it will benefit the shareholder?
And how will I be able to get hold of those rights?

Thanks,
Narendra

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Ankit Singhal said...

I have applied in Suzlon Energy for 192 shares. I would like to know your expectation for its listing price. Also, Your Opinion on Paradyne , AurionPro and Shree Renuka Sugars is still awaited.

Anonymous said...

buy vishal export Rs 7.80 .... target after 5 days is Rs 9.50

Anonymous said...

Hi rajesh
No updates for long time ?

lucky said...

dear sir,
some days before i read on this blog that you are starting a NEWS LETTER very soon . so i want to know that when the service will available.