Thursday, February 7, 2008

Emaar MGF & Wochardt IPO (Update)

Following the recent secondary market turmoil, primary makets have had a direct impact of the Negative mood as primary market buoyancy is directly related to the secondary market scenario. Apart from these, a few expensively priced IPOs have been badly hit & have had to make necessary adustments to manage their issues to go through. This was somewhat factored in our recommendation & we had made our Recommendation accordingly.



Updates:

Wochardt which had already re-priced the issue before we posted our recommendation; had to extend the issue period for 2 more days. We reitirate our views on our below recommendation posted on 4th Feb, 2008.


IPO: Wockhardt Hospitals Limited
Issue Period: Jan 31 to Feb 07 (Date Updated)
Price Range: Rs.225 to Rs.260
Minimum Mkt Lot: 20 shares
Issue Size: Rs.639 crore

Recommendation: Avoid
Grade: Above Average*
Rating: 6 out of 10*
Expected Gains on Listing Day (in percentage terms) : N.A.
Expected Range of Listing Price: N.A..
Chances of winning Allotment: Strong (in Retail category)
Sector: Healthcare Sector



Recommendation:

Wockhardt Hospitals Limited may be impacted by the challenges facing the healthcare industry. The key ongoing industry wide challenges are providing quality patient care in a competitive environment & managing costs. Other areas of concern may be continuous technological & pharmaceutical improvements that increase the cost for providing, or reduce the demand for, healthcare; changes in the distribution process or other factors that increase the cost of supplies. Also, the valuations of the company seems quite expensive. Hence we recommend investors to Avoid subscribing to this IPO but post listing,one can have re-look.

*It is advisable to avoid subscribing to this IPO for listing gains. Post listing, an investor can have re-look at this company if it is available at attractive valuations as this is one of the largest private healthcare services companies in India.

*We have given rating of 6 out of 10 for its strong fundamentals(long term) and business model.Health care sector is a sunrise sector and is in nascent stage. Health spending will increase as Indian economy grows. Along with education, health attracts major budget allocation in the Yearly financial budget


========================================================


Emaar MGF which had already re-priced the issue before we posted our recommendation; had to again further re-price & extend the issue period for 5 more days. We reitirate our views on our below recommendation posted on 6th Feb, 2008.



IPO: Emaar MGF Land Limited
Issue Period: Feb 01 to Feb 11 (Date Updated)
Price Range: Rs.530 to Rs.630 (Price Range Updated)
Minimum Mkt Lot: 10 shares
Issue Size: Rs.5540 cr to Rs.6460 cr

Recommendation: Subscribe (High Risk Investors)
Grade: Good (For Long-term)
Rating: 7 out of 10
Expected Gains on Listing Day (in percentage terms): 15-18%
Expected Range of Listing Price: 595-685
Chances of winning Allotment: Strong (in Retail category)
Sector: Real-estate

Bid: at Rs.530 (Additional Update)



Recommendation:

Most of the Company's projects are in priliminary stages of planning & require statutory and regulatory approvals or permits. Even after receiving such approvals, it may take several years following the acquisition of land before income or positive cash flows can be generated through the sale of real-estate project. The issue is quite expensively priced vis-a-vis well established market leaders in the real-estate like DLF and Unitech.


But looking at the strong Parentage support of internationally acclaimed company Emaar & domestic expertise of MGF; strong strategic relationships, strong Land reserves of 13,024 acres as on Dec 31, 2007 & prospects of future projects, we recommend High-Risk investors to subscribe to this IPO with Long-term horizon.

EMAAR MGF & WOCKHARDT (UPDATE 2)

Both the IPOS withdrawn due to poor response.EMAAR IPO will be back after 6 months.

No comments: