With strong fundamentals, with good management of the company and high grey market premium the issue is expected to be over subscribed by the investors as this is the Golden opportunity and as an investor , should not miss on this one.
L&T FINANCE HOLDING LIMITED
ISSUE OPENS ON JULY 27, 2011 AND CLOSES ON JULY 29, 2011. PRICE BAND: RS 51 TO RS 59 PER EQUITY SHARE OF FACE VALUE OF RS 10 EACH. THE FLOOR PRICE IS 5.1 TIMES THE FACE VALUE AND THE CAP PRICE IS 5.9 TIMES THE FACE VALUE.
BIDS CAN BE MADE FOR MINIMUM OF 100 EQUITY SHARES AND MULTIPLES OF 100 EQUITY SHARES THEREAFTER.
A SPECIAL DISCOUNT OF RS 2 PER EQUITY SHARE TO THE ISSUE PRICE HAS BEEN OFFERED TO THE ELIGIBLE EMPLOYEE (“ELIGIBLE EMPLOYEE DISCOUNT”).
FUNDAMENTALS
Basic EPS
PERIOD | CONSOLIDATED EPS | WEIGHTS |
Year ended March 31,2009 | (0.36) | 1 |
Year ended March 31,2010 | 2.17 | 2 |
Year ended March 31,2011 | 2.87 | 3 |
Weighted Average 2.10
Diluted EPS
PERIOD | CONSOLIDATED EPS | WEIGHTS |
Year ended March 31,2009 | (0.05) | 1 |
Year ended March 31,2010 | 2.17 | 2 |
Year ended March 31,2011 | 2.83 | 3 |
Weighted Average | 2.13 |
Note the face value of equity share is RS 10.
Sr.No | Particulars | Consolidated |
1 | P/E ratio based on basic EPS for the yr ended March 31,2011 at the floor price | 17.8 |
2 | P/E ratio based on the diluted EPS for the yr ended March 31,2011 at the floor price | 18.0 |
3 | P/E ratio based on basic EPS for the yr ended March 31,2011 at the cap price | 20.6 |
4 | P/E ratio based on weighted average basic EPS for the yr ended March 31 ,2011 at the floor price | 24.3 |
5 | P/E ratio based on diluted EPS for the yr ended March 31,2011 at the cap price | 20.8 |
6 | P/E ratio based on weighted average basic EPS for the yr ended March 31, 2011 at the cap price | 28.1 |
7 | Industry P/E Highest Lowest 7.5 Industry Composite 10.6 | 15.4 |
Return on Net worth
Period | Consolidated | Weights |
Yr ended March 31,2009 | 0.00 | 1 |
Yr ended March 31,2010 | 11.21 | 2 |
Yr ended March 31,2011 | 13.58 | 3 |
Weighted Average | 10.53 |
Net Asset value per Equity Share
NAV (Rs) | |
Period | Consolidated |
As on March 31 ,2009 | 2,229.70 |
As on March 31 ,2010 | 15.31 |
As on March 31 ,2011 | 20.40 |
NAV After the issue | - |
Issue Price | - |
Comparison with industry peers
Face Value (Rs) | EPS(Rs)* | P/E# | RoNW for Fiscal 2011 (%) | Book value per share for Fiscal 2011 (Rs) | |
L&T Finance Holdings Limited** | 10 | 2.87 | - | 13.58 | 20.40 |
Shriram Transport Finance Company Limited | 10 | 53.92 | 12.1 | 24.87 | 216.37 |
Mahindra & Mahindra Financial services | 10 | 50.92 | 12.3 | 19.36 | 244.70 |
IDFC | 10 | 8.77 | 15.4 | 11.39 | 76.97 |
Rural Electrification Corporation | 10 | 26.18 | 7.6 | 20.15 | 129.90 |
Power finance Corporation | 10 | 23.06 | 8.3 | 17.37 | 132.79 |
Sundaram Finance | 10 | 70.01 | 7.7 | 21.53 | 325.22 |
Note * source extract of annual reports /financial statements of the company for the fiscal yr 2011
** Based on consolidated and restated financial statements for the yr ended march 31,2011
# Based on closing market price as on july 1,2011and basic Eps for 2011.
THE ANCHOR INVESTORS BIDDING WILL START ON JULY 26,2011.
When the monolithic AT&T was carved up into 8 companies in 1984, the original ‘Mabell’ gave birth to 7 subsidiaries called ‘Baby Bell’. These 7 subsidiaries became more leaner , more efficient machines and went onto outperform the parent company.
On Thursday the Indian giant monolithic L&T announced its initial public offering. Expectations are the history will repeat itself. It is always good to to separate ypur son and allow him to grow in a free environment .Making it independent and helping the company to grow better. It will result in value unlocking .If we got to see Reliance before the 2 brothers split up the Mcap of Reliance was Rs 1.58 lakh cr but after the split up there was value unlocking of all the companies which got listed on the bourses and the Mcap as on today stands nearly Rs 3.64lakh cr.
L&T has 10 operating divisions and the co is becoming too big to handle and there is no fair value at this juncture can be removed.
The company will raise Rs 1245 Cr through the issue which will result into dilution of 17% stake in the parent company. The share price of L&T includes the Rs 118-Rs 137 for L&T finance .There is a possibility that this move by the renowned corporate House will see a spike in the Price of the Parent company also. L&T Finance has already raise Rs 330 Cr by a pre IPO Placement of share with capital International at a price of Rs 55/-
With the 2 rating agencies have given the IPO 5/5 rating that means the fundamentals of the company is strong.
The total of Rs 1575 Cr is lower than the planned Rs 1750 Cr. The IPO proceed will be used to repay the Rs 345 cr debt from the parent co.
Crore (RS) | FY2011 | FY2010 | %Chg |
Revenue | 2115 | 1424 | 48.5 |
Expenditure | 1503 | 1030 | 46.0 |
Operating profit | 612 | 394 | 55.2 |
Other Income | 28 | 18 | 55.4 |
Net Profit | 393 | 263 | 49.3 |
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