Manganese Ore India Limited (MOIL),the government owned miner has seen massive oversubscription of its IPO being subscribed 55 times and should easily reach around 60 times.I had written that the MOIL IPO price of Rs 340-375 makes the valuation hugely attractive which would lead to oversubscription.The fundamentals of this stock easily command a much higher price given its low cost leadership position in the fast growing Indian market.The valuation of the company was compelling even at a 25% higher price point as I had written earlier but at around Rs 6300 crore,MOIL had become a no brainer.
While some of the oversubscription could also have been due to people’s expectation of oversubscription,I think most of the demand was fundamental in nature.The Indian primary market is showing huge demand for quality stocks.Junk IPOs unless they are not manipulated are showing weak demand .Somewhat doubtful IPO of Claris Lifesciences was forced to decrease its price by 20% as there were not enough takers for the issue.

One97 a Private Equity Backed Mobile Value Added Service (VAS) Company is raising Rs 120 crore ( $25 million) from the Stock Market in an IPO.The Company operates in India’s Telecom Sector which is the fastest growing in terms of subscribers and represents a good growth opportunity as 3G services starts to roll out.

The Company has not indicated the pricing of shares as of now ,only that it wants to raise Rs 120 crore.Note the VAS Category is seeing increasing competition with a number of new entrants.One97 has diversified into a combined VAS player cum Technology Investor makings its valuation difficult.Note the VAS sector is no longer a unique or fancied one as OnMobile has already listed sometime ago and its valuation has decreased dramatically since then despite improved profits.I would sit out on this one due to the complicated nature of the business,slowing growth and valuation difficulties.A higher risk investor probably might want to buy this one.

I have been repeatedly pointing out the dangers of investing in Real Estate Companies as more and more skeletons tumble from the closet.Its an open secret that Real Estate Companies in India fudge their Financial Statements through Creative Accounting and other means such that even Fund Managers don’t invest in the Realty Sector.Major Real Estate Companies like IREO and Emaar MGF have played prominent role in some of the major corruption scams rocking the country.Now more big Real Estate Firms have been implicated for their role in other corruption scandals.DB Realty a Mumbai based Realty Company has been found to be a prime suspect in the LIC Housing Finance Scam where the CBI has arrested.Some construction companies like Man Infrastructure,HCC have also become a target of investigation.

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.

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.