IPO Update : Action Construction Equipment Ltd.

Nothing can beat an ACE !!



Action construction Equipment (ACE) Ltd. has entered the capital markets with a public offer of 46 Lac equity share of Rs. 10 each at a price band of Rs.110-130. Investment Guru rates the IPO as “above average” and recommends investors to subscribe to the IPO. The stock is expected to generate listing gain in the range of 30-40% provided the market sentiments remain positive by the time of listing of the issue. If one has to choose between ACE and Atlanta IPO, ACE IPO offers more value.


Let’s have a look at the issue highlights :

ACE is an established manufacturer of Hydraulic Mobile Cranes, Mobile Tower Cranes and Construction Equipment in the country existing since more than a decade and enjoys a consolidated presence in all major Infrastructure, Construction, Heavy Engineering and Industrial Projects throughout the country

The Company clientele includes most of the leading Private and Government Sector Companies in India such as Reliance, ABG, L&T (ECC), BSES, BHEL, Punj Lloyd, Gujarat Ambuja, Coal India, BSNL, Indian Railways, NTPC,IOCL, ACC, Ministry of Defence & HPCL.
Products of the Company are also being exported to U.A.E., Qatar, Sultanate of Oman, Kuwait, South Africa, Kenya,Nigeria, Mauritius, Sri Lanka, Nepal, Bhutan, Bangladesh, Singapore and Portugal.

The proceeds of the issue will be used to set up a new plant for manufacturing loaders, higher capacity tower cranes and construction equipment along with expansion and modernization of the existing capacities and facilities. The plan also covers setting up of a joint venture with Tigieffe SRL of Italy and setting up a corporate office and R&D center.

The company has a good financial track record. The topline has swelled from Rs. 10 crore in year 2002 to Rs. 160 crore in year 2006. Net profits have also increased on a consistent basis. The company bottomline in year ended March,2006 has seen a jump of 88% over previous year.

As per company’s prospectus, the weighted average EPS comes to Rs. 9. This means that the offer price comes at a P/E of 12 at lower band and 14 at the upper band. The competitors are quoting at a P/E of 19-24.

The weighted average return of net worth is 34% whick looks good. Competitors generate retrun of 15% - 21%

Issue Opens : 01-Sep-2006
Issue Closes “ 07-Sep-2006
Registrar : Karvy computershare


23 comments:

Anonymous said...

Dear Sir,
I hold 30 shares of infosys bought at 1650. The stock price has reached 1850 today. Would it be right to sell the stock at current levels or is there more potential?
Kindly advice

KK

Anonymous said...

Rajesh, Thanks for the IPO update. Can you recommand some Infrastructure companies in the secondary Market.

Thanks again.
Kavita.

Rajesh Soni said...

Hi KK
Good to see you on message board after a long time. It all depends on your investing goals. Infosys is the best pick in Tech sector and I would suggest that you hold on to the stock for long term.

Rajesh Soni said...

Hi kavita
This is the hot sector and many companies are attracting investor attention. However, I would advice you to stick to prominent players like L&T,Punj Lloyd and Nagarjuna Construction. specially pinj lloyd's valuation look attractive from long term perspective. Mid cap players like Unity infra, PBA infra can be considered for trading.

Anonymous said...

Dear Sir,

I am a new one to stockmarket.. i am very happy to see your blogg... I have read your ipo recommendation.. shall i apply for ACE ipo... I need your some strong cos to invest in a long term(2-3 yrs) please advise me..

Manish said...

Dear Sir,
Are the markets set for a big downfall?.. Some experts are sounding investors to be prepared for a 1000 point correction from 12000 levels.... What is your opinion on this ? I value your advice very much sir and eagerly looking for your reply to clear my doubts.

thanks
Manish
Jaipur

Anonymous said...

Hi Soni Ji,

Can I purchase AKSH at this level?
Please suggest!!!

Anil

Asif said...

Hi Raj,

I wanted to contact you but was not able to find an email address on your website. My name is Asif Suria and I am the editor of an investment newsletter called SINLetter. Could you drop me an email by using the contact form on my website or directly at asif at sinletter?

Thanks,
Asif

priya said...

Dear Rajesh Ji,

I am a newcomer on this blog and I came to know of this blog from google search. I am from engineering background.. and invest a little in share market though I have lost money in Reliance petroleum. I have bought 200 shares @ 80 and currently incurring a loss of Rs. 3000 :(
I am sure you would help me in getting out of this trouble.

Priya

BSE BULL said...

WATCH OUT FOR 200 POINTS RALLY IN THIS WEEK...

Rajesh Soni said...

Dear Anonymous,
I am not sure of your risk profile. You may want to consult a financial planner to determine your investor profile. If you want a general guidance, I would recommend that you invest in stocks such as Infosys, reliance Industries, Punj Lloyd, Gujarat Ambuja, PNB etc.

Rajesh Soni said...

Hi Manish
Yes, Markets are ex[ected to correct in the month of september. However, it would be a voltile move this month with a pause after each correction. So be careful and as I always say dont put your profits on the table, keep booking profits in such markets to avois disappointment unloless you have a strict long term view of the markets.

Rajesh Soni said...

Hi Anil
Aksh looks attractive at current levels. You can take position with medium term outlook (3-4 months)

Rajesh Soni said...

Hi Asif
You can conatct me at investmentguru@sify.com

Rajesh Soni said...

Hi Priya
I would suggest that you exit Rel. Petroleum and enter into Reliance industry. Reliance industry holds 65% stake in rel. petro, so you automatically get benefit of any positive development in Reliance Petro stock plus the added benefits of Relianc Industries developments.

Priya said...

Hi Rajesh ji

Thanks for your reply...You replies display your deep understanding of the stock market.
Hats off to you ! ...I am keeping a close watch on the blog for your insightful articles
Thanks again

Priya

Anonymous said...

Can I buy Punj Lloyd at current levels?

Prasad

Rajesh Soni said...

Hi Prasad
Yes, From a long term perspective Punj Lloyd looks attractive.

abhay said...

Hi rajesh,

I lost a good amount of money in the markets crash that happened some time back.

After that i have been on a cautious note and have again lost a lot of money.

Off lately there is a surge in interest in stocks like air deccan and jet airways,can you throw some light over the reasons for it.

Best Regards,
abhay.

Rajesh Soni said...

Hi abhay
It's really sad to see people loosing money. I don't say that one can consistently manage to make profits in stock markets . but by careful study and discipline one can generate profits instead of ending up in losses. Don't buy on rumors. Invest only in fundamentally string stocks unless you know the company very well and understand their business.
I would suggest that you should remain away from airline stocks as the overall outlook for aviation sector is not good. Currently we are witnessing speculative buying in these stocks. This sector is marked by intense competition and high operating cost which would take a toll on these companies.

Anonymous said...

where is sensex heading guys ???

Anonymous said...

SENSEX TO DIVE 500 PTS. BY SEPTEMBER END

abhay said...

Rajesh thanks for being prompt
in answering my querries...

abhay