IPO | Green World Investor

Cantabil Retail IPO Analysis – Average Company in a Bad Sector makes it Avoidable

20 Sep, 2010

Bad Part

1) Bad Sector – It is marked by very high working capital,low margins,high competition and volatility in raw material prices.While Cantabil has grown well,the sector is hardly to excite someone about.The company’s expansion plans will need lead to any dramatic improvement in its business model.

Summary

There is nothing to dislike about the company,however there is nothing to like about it either.Valuation at around 12x is not expensive however the risks of the sector and the smallness of the company does not make it very cheap either.Manufacturing in house,reduction of working capital might make it attractive later on. However I would give it a pass as there are better opportunities around.

“Orient Green Power” IPO Analysis- Focused Renewable Energy Utility with Fast Growth Plans however Execution is the Question

20 Sep, 2010

Biomass Energy,Energy,IPO,Wind Energy

Orient Green Power Ltd (OGPL) is Indias Largest Green Utility and is one of the areas that is a good way to invest in India’s Green Energy Sector.The company is owned by the Shriram Group and a couple of PE Players will issue around Rs 900 crores (~$180mm) which will result in a market cap of $450mm.OGPL is a relatively new company setting up and acquiring most of its 200 MW capacity in the last year which comprised of 152 MW of Wind Energy and the rest is Biomass Energy.The company plans to increase this capacity 4 fold to around 1000 MW in the next couple of years with Power Plants in India,Europe and Sri Lanka.The centrepiece of this expansion will be a 300 MW Wind Energy Plant in Tamil Nadu for which $10 million has been already been spent.The company’s past profits and cash flow have been negative which is not exactly a concern given that most of the capacity was set up in the last year or so.I like the company’s growth plans and the sector in which it operates.India suffers from a huge power deficit and Renewable Energy is being heavily promoted through Government Subsides and Renewable Energy Madates by the CERC.Trading of Renewable Energy Certificates (RECs) should start in a year or so giving additional revenue streams to Green Energy Producers.Here are the pros and cons of the issue

Eros International Media (EIML) IPO Review and Analysis – Good Media Content Play available at a moderately cheap valuation

17 Sep, 2010

IPO

Eros International Media Limited (EIML) is one of the biggest owners and distributors of Indian Films.It owns a Film Library of around 1000 Indian Films including some inconic titles.The Company is involved in the business of sourcing,creating and distributing media content which is mainly films.It has grown at a fast clip in the past 3-4 years though the last year was slower on account of the GFC.It is a part of the Eros Group Plc and has till now grown mainly through the financial backing and networking of its parent.There is a lot to like about this IPO and very little to dislike.The valuation on a P/E basis is also not expensive at around 19x.Given that the Indian economy is booming with Entertainment one of the hottest sectors,this is a good play on this sector.Here are some of the highlights from their DHRP

Career Point (CPIL) IPO – Shady Management,Falling Margins,Regulatory Risk and Expensive Valuation

15 Sep, 2010

IPO

Shady Management – Income Tax Raids on the company and its promoters found $1.3 million in unaccounted cash and jewelery,cash and documents were impounded.The promoters have been accused of falsifying accounts,evading tax and Registrar of Companies (ROC) and Service Tax Department have also served notices.

Expensive Valuation – The company will come out with a valuation of P/E of 30-32x which is more expensive than other listed education companies.At least Prakash Steelage with a corrupt management had the decency to come with a discount

Summary

The only thing to like about this company is the sector that it operates in.However Shady Management,Super High Valuation and Regulatory Risk makes this company a strictly no subscribe.However given the shenanigans being openly perpetrated in the Indian Stock Market don’t be surprised to see a 100% Listing Gain.

Tirupati Inks Analysis – More Junk trying to raise money from the Primary Markets

14 Sep, 2010

IPO

Why would anyone want to invest in such a sorry stock is beyond me but I have seen even worse companies list so don’t get surprised.The company is basically is using all the investor’s money to become a decent business.Its current business with less than $1 million in fixed assets and $500k in profits is not worth putting money into.So if you are a super high risky investor then this stock would make sense for you.

India to Divest another State Owned Commodity Company Manganese Ore (MOIL) through an IPO

9 Sep, 2010

IPO,PSU

India has divested small equity stakes in a number of state owned Commodity Companies this year and the trend is expected to continue in the future as well.Metal Mining company NMDC and Oil/Gas Player OIL India were sold earlier this year and Coal India Limited (CIL),Hindustan Copper and MMTC are also in the pipeline.Besides Commodity […]

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