ipo of Burnpur Cement
- Thread starter barkha474
- Start date
Dear Barkha;
Given below is an article from money control. As for the grey market
I think it is around 8 to10 premium. Strange are the way of the market, one side it says dont apply and on the other hand people are willing to pay a premium.
All the best.
Farook
Experts say don't apply for Burnpur Cement IPO
2007-11-28 15:30:22 Source : moneycontrol
http://www.moneycontrol.com/india/n...n-t-apply-for-burnpur-cement-ipo/18/35/314843
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Burnpur Cement proposes to enter capital market to raise Rs 26.20 crore to part-finance a clinkerisation and cement grinding plant in Jharkhand.
Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Majority of experts said don't apply.
Experts/Company
Poll Result Experts view
R S Iyer
(KR Choksey)
Dont Apply
One should ignore the issue as there are other good issues available in the primary market.
Manish Bhatt
(Prabhudas Lilladher)
Apply
Burnpur Cement is available at 6 PE on the EPS of Rs 1.92 for the year ended March 2007. Issue looks good and people can apply for the issue. Looking at valuations, the downside is limited to the price. One can hold with short to medium term view and can get good returns.
SP Tulsian
(Investment Advisor)
Dont Apply
The existing performance of Burnpur Cement is pathetic, to say the least! For FY 07, topline was at Rs 24 crore including trading income of Rs 4 crore, which resulted into a bottomline of Rs 1.14 crore on equity of Rs 11.17 crore, resulting into an EPS of close to Re 1.
Post expansion, debt of the company would rise close to Rs 90 crore. It is also quite surprising to see sundry debtors of Rs 12 crore on monthly sales of close to Rs 2.50 crore, thus resulting into a debtor cycle of close to 5 months. The inefficient and low performance would continue till FY 09.
Though the company has been in operations since October, 1991, it has been struggling to survive. Inspite of best time for the cement industry, bottomline for the first time, in the history of the company, has surpassed Rs 1 crore. Realising that the existing operations are not viable, due to low conversion margins and non-availability of clinker, the company structured this backward integration. This means, to make the assets of Rs 20 crore, profitable and fully productive, make fresh investments of Rs 120 crore. This defies al logic and commercial prudence!
Though the expansions would be completed in the next 12 months, huge debt of close to Rs 90 crore, would always be a dampner. Even, huge equity base of Rs.43 crores, would always keep EPS depressed and unattractive. Based on existing performance, share is being issued at PER of 12 times while established peers are available in the secondary market at a PER of 5 6. Why to risk your money in this tiny and inefficient play?
The company is offering 20.8 million shares, or 48.39 per cent of its pre-issue paid up caital, at a price of Rs 12 per share. The issue would open on November 28 and close on December 3.
The proceeds of the issue would be used to part-finance setting up of a 800 TPD clinkerisation and cement grinding plant in Jharkhand at a cost of Rs 120 crore. The plant is expected to go on stream from 2008-end. The remainder amount would be funded through debt and internal accruals.
Burnpur Cement currently produces 0.3 million tonnes of cement annually at its plant in West Bengal.
SREI Capital markets is the lead manager of the issue.
Given below is an article from money control. As for the grey market
I think it is around 8 to10 premium. Strange are the way of the market, one side it says dont apply and on the other hand people are willing to pay a premium.
All the best.
Farook
Experts say don't apply for Burnpur Cement IPO
2007-11-28 15:30:22 Source : moneycontrol
http://www.moneycontrol.com/india/n...n-t-apply-for-burnpur-cement-ipo/18/35/314843
Email Print Version
Burnpur Cement proposes to enter capital market to raise Rs 26.20 crore to part-finance a clinkerisation and cement grinding plant in Jharkhand.
Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Majority of experts said don't apply.
Experts/Company
Poll Result Experts view
R S Iyer
(KR Choksey)
Dont Apply
One should ignore the issue as there are other good issues available in the primary market.
Manish Bhatt
(Prabhudas Lilladher)
Apply
Burnpur Cement is available at 6 PE on the EPS of Rs 1.92 for the year ended March 2007. Issue looks good and people can apply for the issue. Looking at valuations, the downside is limited to the price. One can hold with short to medium term view and can get good returns.
SP Tulsian
(Investment Advisor)
Dont Apply
The existing performance of Burnpur Cement is pathetic, to say the least! For FY 07, topline was at Rs 24 crore including trading income of Rs 4 crore, which resulted into a bottomline of Rs 1.14 crore on equity of Rs 11.17 crore, resulting into an EPS of close to Re 1.
Post expansion, debt of the company would rise close to Rs 90 crore. It is also quite surprising to see sundry debtors of Rs 12 crore on monthly sales of close to Rs 2.50 crore, thus resulting into a debtor cycle of close to 5 months. The inefficient and low performance would continue till FY 09.
Though the company has been in operations since October, 1991, it has been struggling to survive. Inspite of best time for the cement industry, bottomline for the first time, in the history of the company, has surpassed Rs 1 crore. Realising that the existing operations are not viable, due to low conversion margins and non-availability of clinker, the company structured this backward integration. This means, to make the assets of Rs 20 crore, profitable and fully productive, make fresh investments of Rs 120 crore. This defies al logic and commercial prudence!
Though the expansions would be completed in the next 12 months, huge debt of close to Rs 90 crore, would always be a dampner. Even, huge equity base of Rs.43 crores, would always keep EPS depressed and unattractive. Based on existing performance, share is being issued at PER of 12 times while established peers are available in the secondary market at a PER of 5 6. Why to risk your money in this tiny and inefficient play?
The company is offering 20.8 million shares, or 48.39 per cent of its pre-issue paid up caital, at a price of Rs 12 per share. The issue would open on November 28 and close on December 3.
The proceeds of the issue would be used to part-finance setting up of a 800 TPD clinkerisation and cement grinding plant in Jharkhand at a cost of Rs 120 crore. The plant is expected to go on stream from 2008-end. The remainder amount would be funded through debt and internal accruals.
Burnpur Cement currently produces 0.3 million tonnes of cement annually at its plant in West Bengal.
SREI Capital markets is the lead manager of the issue.
this company is too much dependent on oil and other stuff from outside vendor, which are prone for price fluctuation. Also does not have huge infrastructure to manage production. Hence for longterm, its not advisible(all gnyan taken from reading various suggestions). But you may gain some 10-20% listing benefit, If you want to take quick money as going by grey market trend, Not sure, I am confused, So you take ur call
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