It is a microcap stock with only $12 million being sold to the public making it easily susceptible to manipulation because of its small float size.Its fundamentals could not in any way justify Rs 199 as even at Rs 118 it looked twice overvalued to me.But the stock kept climbing without any news probably sucking in naive investors out to gamble on the “greater fool” theory until the greatest fools were left holding out the can
The Indian Market has seen a slew of junk Initial Public Offerings (IPOs) which have led to large losses for investors.The fundamentals of these companies are quite abysmal with characteristics like debt defaults (Nitesh Estates),losses (Tarapur Transformers) and opaque business model ( Jaypee Infrastructure).Most of these IPOs have bombed while some have been pumped and […]
The FMCG industry in India is currently trading mostly in the 25-35x range so the company is pricing itself at 25x which makes sense considering that it is a small company with just 1 product.The success of its new products is still open to question and most of the money will be spent of promoting these products.At 25x,the company is not leaving much on the table for investors considering that its new product ventures are risky considering the strong competition in the Indian FMCG market.Though the stock is much better than the junk being offering in the Indian market,I would still give this IPO a miss as their are better options available in the Indian FMCG sector
India’s primary market for stock issues has seen a lot of junk offerings in the recent past.They have led to big losses for investors naive enough to invest in such dodgy issues with fantastically bad fundamentals.The features of such IPOs have been that 1) They have failed to get subscribed which is a blessing in […]
Engineers India Follow on Offering (FPO) is a sequel to the government PSU divestment through stake sales in companies with low public float.EIL FPO is going to see a 10% dilution of the government equity in the company on top of the existing 9.6% public float.The 3.36 crore (33.6 million) shares are being offered in […]
Indian Real Estate Sector yet to Recover from the Lehman Crisis The Indian Real Estate Sector is one of the most interesting sectors in India with a huge potential as well as companies whose financial statements even fund managers don’t trust.This sector was the worst affected by the Lehman crisis and still has yet to […]