Ashoka Buildcon Ltd IPO Message Board (Page 25)

ITS AN CLEAR AVOID

DEAR SAMIT RAY & CHEM CHO,
IF YOU AVOID THE ISSUE, YOU WILL REGRET.S.P. tulsian 's analysis is based on his wrong understanding of the sector.Ashoka is focussed on BOT Roads while ITNL is Annuity focussed. In annuiity type of project, the returns are limited to recovering project cost. In toll based road projects, the upside through Traffic growth is encashed over a longer toll collection period , than annuity. SPTulsian has compared apples with banannas. So the decision is yours !

AS PER NSE WEBSITE, ASHOKA IPO IS ALREADY SUBSCRIBED 90% ON FIRST DAY. EMPLOYEE QUOTA ALSO SUBSCRIBED 70% THERE IS EVERY CHANCE THAT , BY LAST DAY, IPO WILL GET SUBSTANTIALLY OVERSUBSCRIBED

Dear GEM IPO FINDER,Sreedhar, Ravi, Shanpuri, ETC.

It seem's fever has weakened SJ to the great extent.But I Don't understand why other prominient boarders (like GEM IPO FINDER, etc) have also got weakened and no more submitting their respective analysis.

I already had applied to the Va Tec Wabag full applications. Now, though I have full funds to apply in Ashoka and Tecpro but literally confused as whether to apply for or not.

- SJ seems to be suggesting for the Tecpro and not Ashoka but subscription figures are comparatively better in ashoka compare to Tecpro till now.

- I am finding that there are two sections amoung boarders here at Chittorgarh .com : One suggesting for the Tecpro and avoiding Ashoka.
Second, Suggesting Ashoka and avoiding Tecpro.

Great confusion, as it implies either to aviod both of them or apply to both.

Please enlightened us if you can.

Thanks in advance.

Dear friends,
It is better to avoid Ashoka Buildcon.It is highly priced.If market is not favorable at the time of listing,it may not list at good price.It may be risky to go for this issue.

we had applied 11 retail full aplication in ashoka buildcon.asper the news from nasik`s broker.it will give you good return

read Tulsian analysis ... asking PE of 18- 19.5 is well above of what it should have been 12 , according to him ....
what do you people feel ?

why are the companies not investor friendly ??? trying to loot...

HI,
GUYS ASHOKA BUILDCON IS ANOTER RAMKS AVOID
GO FOR FIRST CHOICE
1)TECHPRO
2) VATTECH
3) CATBIL SMALL QUANTITY


THOSE WHO HAVE FOLLED MY ADVICE WILL PROFIT
REMEBER TAKING ADVICE OF OPERATORS LIKE BJ , RAVI BANGALORE , SHEEDHAR IS RISKY
KNOW YOUR SUBCRIBTION IN RAMKS
ASTER SILICATE EPISODE,ADVICE SHORTING OF SHARE OF ENGG INDIA BY RAVI BANGALORE EVEN THOUGH SHARES WERE NOT IN DEMAT ACCOUNT
AND NOW THEY ARE NOT OFTEN IN BOARD
DO NOT TAKE ADVICE OF ANONMOUS

ASHOKA IS SUPERHIT IPO. JABARDAST HAI.

Whether Ashoka Buildcon Limited IPO may give listing gain? Any idea/comment?

kya iss ipo me application lagiye ja sakti hai

Good work IPODoctor
for such a wonderful analysis on Ashoka Buildcon

It will definitely list above 400 and give a maximum result

good ipo apply and take the listing gain no risk

Expensive Toll SAYS PREMIUM INVESTMENT

Ashoka Buildcon is entering the capital market on 24th September 2010, with a public issue of upto Rs. 225 crores, in the price band of Rs. 297 to Rs. 324 per share. It is strange to see the company, not even taking pain to state the amount, it proposes to raise, in Capital Structure, on page 31 of RHP.



Apart from this incomplete information, even some misleading or incorrect information is given in the RHP. On page 7 of RHP, it is stated that the Company believes that they currently operate one of the highest number of toll based BOT projects in India. Is it in terms of numbers or kilometers of lanes? The company currently has interest in 23 BOT road projects, for approx. 3,498.35 kms. of lanes in 5 states. As against this, IL&FS Transportation Network, in February 10, had 17 BOT road projects comprising approx. 9,397 lane kms., with pan India presence. See what all a company has to do, to sail through its IPO! But then what is the BRLM doing in this case?



Apart from BOT projects, the company has its EPC or contracting division to construct roads for its BOT projects, as also for third parties, as also constructing industrial and institutional buildings. RMC and Bitumen Division and Toll Collection Contract Division, have either inhouse or insignificant contribution, in the consolidated financial performance of the company.



For FY10, on consolidated basis, the total income of the company was at Rs.1,116 crores with PAT at Rs. 76 crores. This translates into an EPS of Rs. 16.65 for the year, on equity base of Rs. 45.69 crores. Net worth of the company as at 31-03-10 was at Rs. 450 crores, excluding Preference Share Capital of Rs. 12.44 crores. This translates into a book value per share at Rs. 98.



The object of the issue is to largely repay the loan of the company and its subsidiaries, to the extent of Rs. 115 crores, working capital requirements of Rs. 45 crores and purchase of capital equipments of Rs. 14 crores. As the company had a debt of Rs. 1,122 crores, as at 31-03-10, debt equity ratio worked at 2.43:1.



Inspite of the company having its topline contributed by EPC by about Rs. 995 crores, with toll of just Rs.45 crores, the issue looks quite expensively priced, at a PE of 18 to 19.50 times and PBV of 2.34 to 2.55 times, (post IPO), at the lower and upper price band.



This needs to be compared with the financial performance of IL&FS Transportation a pure BOT road and infrastructure play. This company had a topline of Rs. 2,400 crores for FY10, on consolidated basis, while PAT was placed at Rs. 344 crores, resulting in an EPS of Rs. 17.75 and Rs. 20 on diluted basis. Share now ruling at 343 is ruling at a PE of 19.30 times, with book value at Rs. 86 per share, as at 31-03-10. This company is having advantage of size as reflected from its topline and net worth of Rs. 1,668 crores, as at 31-03-10.



Even JP Infra is much better road and infra company, which is implementing 165 km. Yamuna Expressway project from Noida to Agra. Apart from this, company was given 1,235 acres of land at 5 locations, for development. The total cost of the project of this company, including land cost of 6,175 acres and cost of construction of 165 km. expressway, is about Rs. 10,000 crores. The company is now monetizing its first parcel of land at Noida, which can result in development of over 120 million square feet of saleable area and present value of this land is estimated to be over Rs. 10,000 crores. Valuations of other 4 parcels of land is not considered here. The present market cap of this company is just at Rs. 12,500 crores.



Also, it is an unwritten law that there should be a gap of about 15% in IPO price and expected listing price of a share. So if, IL&FS, a better and bigger portfolio, with better parentage, is ruling at a PE of less than 19.50 times, how this company can dare to issue share in a PE of 18 to 19.50 times? On top of it, contracting or EPC companies, of this size are ruling at a PE of around 10 times. So, if we take an average of both, ideal PE of the company on bourses should be 14 times and issue should have been made at a PE of less than 12 times.

One can thus say that the issue is definitely aggressively priced and valuations look stretched even at the lower end of the price band. It is better to look for existing players by giving a pass to this issue.

Best thing about Ashoka is, Private Equity Investors are not exiting, even when they had an excellent opportunity. Their cost of acquisition is just Rs. 140 . They entered in 2006. Within 4 years , they were getting an opportunity to exit at Rs. 324 with very good profit of 140% . But hey have not offerred any shares in through offer for sale. This shows their tremendous confidence . So Ashoka is a safe bet.

Crusading market regulator CB Bhave charged investment bankers with fleecing investors by pricing initial public offers (IPOs) at astronomical valuations, leading to investor anguish when the market tide turns.

Steep pricing could enrich bankers and companies, but persistence of the practice could demoralise investors, damaging capital markets, he said in what may be the first regulator comment on share-sale pricing since the abolition of the Controller of Capital Issues in 1992.

“In a bid to maximise returns for promoters, they (investment bankers) are not looking at the interests of investors," Mr Bhave, chairman of the Securities and Exchange Board of India (Sebi), said at a banker conference. "You need to introspect whether it is a healthy practice. If you keep investors disappointed day in and day out, the cause of investors will only be a lip service.”

Mr Bhave’s criticism comes amid a surge in IPOs by companies at prices disproportionate to their revenues, profits and net worth. A lot of these IPOs don’t yield much returns to investors in the early years as they tumble steeper during a market downturn as they were sold at prices steeper than fundamentals justify.

The underperformance of the BSE IPO index—it gained 14.5% in the last 12 months, when the benchmark Sensex rose 19.45%—reflects the Sebi chairman’s charges. Furthermore, a price performance study by CARE Research, a unit of rating company CARE, showed that 62% of the 116 IPOs between August 2007 and August 2010 are trading lower than their sale price while 35% are ruling higher.

“Issuers are not leaving enough on the table for investors, which is why we are seeing low participation from retail investors even though the secondary market is buoyant," said Mr Bhave. "Intensive competition among investment bankers are hurting investors’ interest.”

Some of the recent issues reflect his concerns. Career Point, a company that runs tutorial classes, sold its shares at 32 times its past year earnings when the benchmark is trading at 19.5 times. Ramky Infra, a builder of roads, is estimated to have been priced around 21 times. Orient Green Power, with revenues of Rs 56.2 crore, is seeking a valuation of about Rs 2,500 crore.

While these issues have received investor interest, they also raise memories of such past issues that led to tears.

India’s biggest share sale by Reliance Power in January 2008 has left investors poorer by 42% now, adjusted for bonus. So was the case with India’s biggest real estate developer, DLF, whose shares have fallen 30%. Future Capital Holdings is down two-thirds from a sale price of Rs 765.

“It is not only the investor who suffers but also the credibility of the merchant banker if the IPO does not offer returns to the investor," said Nagendra Bhatnagar, chairman, Association of Merchant Bankers in India, and MD, IDBI Capital Market Services. "We will be discussing the issue further and it is a question of self-regulation and we are in the process of revamping the code of conduct and sensitising the members as in the long run it earns a bad name for the industry.”

Ashoka Employee quota already subscribed 70% on day one. very few IPO's have achieved such subscription.overall subscriptionvery good on day 1 at 90%
Apply in full blast. Avoid last day rush

Employee quota almost full, apply in Ashoka, best apportunity to invest as well as making good money. I m agree with 110 & 112

If you want any advice about ipo
than order sj no need to request
him after all he is civil servant
of chittorgarh.He is also Raja
chaudhary of this website.Arey
bhai vatech kii post kab karega
saari raat wait karte karte subaah
ho gayi.20 din se fool bana raha hai
vo bhi pata nahi origial hai ya copy cat
hai.chalo dekh kar pata chal jayega.

SJ,
now its really getting boring to read your posts.
i don't understand why you over react.
Please stop spamming the board, you are losing your credibilty thick and fast on chittorgarh.
Most of your posts are filled with sarcasm and "LOLLLs" .
I see only your posts in this site.
Common buddy ..buck up.