Note most of these companies fundamentals don”t justify even half of the price at which these stocks were issued at.However these companies keep coming with increasing frequency even as the Regulator SEBI chides investment bankers without doing anything real to prevent the retail investors being defrauded again and again.Note Gravita India is another stock which is undergoing a “pump” currently .I expect it to be dumped shortly as the fundamentals of the company are pretty sorry compared to the valuation it is commanding.The illegal grey market of IPO’s , the small market cap of the company and the lax attitude of the Stock Market Regulator has made the Indian Stock Market a heavily biased casino.Here is an interesting article which has analyzed that the only way to beat the shenanigans of the “operators” and the promoters is to sell out on the very day of listing.
The main difference between MOIL and Coal India is the number of shares being issued.Note MOIL is going to raise only $300 million compared to the $3.5 billion raised Coal India.CIL had gotten 15 times over subscription which implies that MOIL can 150 times over subscription based on CIL subscription numbers.While the MOIL IPO Price is very attractive,the massive potential over-subscription would hardly lead to much allotment.However the government had done a good job in pricing the PSU share sales at a decently low price leaving something on the table for investors.Coal India IPO was done at a substantial discount to international peers making it a big success.Shipping Corporation of India is also coming out with a FPO where the pricing will be the key.
India has followed the example of Korea,China,Japan,USA and others in providing a capital subsidy to promote the use of Green Transport in India.Note China and Korea have been very aggressive in providing support and subsidy to the Green Industry.USA has also been providing soft loans and capital grants for manufacturing to Electric Vehicles and Lithium Batteries besides spending millions of dollar in R&D.Obama wants the US to become a leader in Battery Manufacturing with a 40% Global Marketshare while China recently unveiled a plan to create national champions in the Green Car Industry.Japan has also been supportive of Hybrid and Electric Car Technology with Honda and Toyota looking to dominate this emerging Auto Category.
The growth in Pharmaceutical companies has been tremendous in India. It is the second largest growing sector in country dominating the $8 billion domestic pharma market which is growing at around 15-16% pa. The Indian pharmaceutical industry is the third largest in the world.Mergers and acquisitions have become an increasingly important feature of this industry with foreing pharma giants like Merck,Pfizer,Daiichi looking to buy these fast growing small Indian companies.The recent buyouts of Piramal by Abbott and Ranbaxy by Daiichi reflects the desire of Pharma MNCs to inorganically grow their generics strength.This has raised some concerns amongst the Indian government about the independence of the Pharma Industry.However pharma companies are proliferating taking advantage of India’s low cost technical workforce to grow at breakneck speed.. A broad overview of the pharma companies based on the revenue generated in 2007 & market cap is given below:
Chines Rare Exports in October have dropped dramatically to 3 figures from around 3660 tons in September reflecting the Chinese-Japan Tensions and Export Quotas imposed by China for the 2nd half of 2010.While Japan has been frantically looking out for rare earth mineral resources in places like Mongolia,Kazakhstan,India and Vietnam,it will take around 4-5 years […]
Shipping Corporation of India (SCI),the government owned carrier is coming out with a Follow on Public Offering (FPO) of 84,690,730 Equity Shares to divest 18% of its equity which will be equally shared by the company and the government.At the current price the company will raise around Rs 600 crores for the company with another Rs 600 crore going to the government. SCI is India’s largest shipping line by tonnage deriving most of its revenues from oil/gas transport.SCI like other shipping companies has faced a very bad 2009 due to the sharp contraction in world trade and dropping in shipping rates.However results have started to improve with the improvement in the world economy and it is returning to its normalized sales and profits.The valuation of the company is not expensive according to normalized profits however note that shipping sector in general does not enjoy high p/e due to the cyclical and capex intensive nature of the business.The pricing of SCI has not been decided as of now,in the secondary market it trades at Rs 156 which is near its 52 week low in anticipation of the share dilution due to the FPO.Here is a list of the pros and cons.