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Coffee Day Enterprises Ltd IPO Message Board (Page 13)

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57. pinkyjain |   Link |  Bookmark | October 10, 2015 10:36:07 PM
Well Dont panice much

Yes co. Is in loss
So if u want avoid.
As said earlier it will not list at discount.

FII AND NII fig will also be good.

Try to be lucrative in choosing ipo

Recent ipo in this sluggishness also manage for par listing.


Roadside Romeo
You seem to be a new chap on chittorgarh
Bu analysis is very apt.

Septa plz be sure about what you write

Land is not included in this business.

Also Rkj investments were at 362



57.1. Roadside Romeo |   Link |  Bookmark | October 10, 2015 10:54:42 PM
Thank you pinkyjain. Yes I am new to this website.
I used to be a research analyst with very big firm 10 years back and have done almost a dozen IPO reports. At that time, SEBI allowed lead managers to write reports on IPOs with forward projections. But that practice was later banned. Had to leave market after 2009 due to cut downs.

I think a lot of retail and HNI people are panicking right now and that is why grey market premium is also down. I spoke to some of my old friends in institutional broking and response from foreign investors was excellent. Let the anchor book get revealed on Tuesday, and then I think sentiment will change.
56. jagadish abbigeri |   Link |  Bookmark | October 10, 2015 9:47:50 PM
ThanQ Roadside Romeo, What a fantastique Analysis..
55. JSMARKET |   Link |  Bookmark | October 10, 2015 9:26:55 PM
MGuptaji Please advice on CCD? Apply open or sell or avoid... Thanks in advance Sir...
54. Roadside Romeo |   Link |  Bookmark | October 10, 2015 8:37:13 PM
I want to specifically look at some people writing this is loss making company and promoter is greedy etc.
#1. Uchit Patel mentioned Sical has not paid dividends for 13 years and it a useless investment. Note that CCD bought over Sical in 2010 after global financial crisis, so you cannot blame current management of what happened before that. Company had started making loss in 2010, but Mr Siddhartha turned it around and ensured strong profitability.

#2. Please please please please remember that ability to pay dividends is based on cash flows and future growth prospects. If any company see strong growth in future, it should rather retain profits than pay out dividends. Any corporate finance or economics text book will tell you that.

#3. Pls look at latest RHP that was filled on 6 October. Coffee segment subsidiary reported positive net profit for first qurter of FY16. Even consolidated financials show small positive net profit. The profits are very very small at this time, but clearly means company has turned around. Again, any person with minimal IQ level will tell you that maximum money can be made if you buy when there is turn around. Once IPO is done and debt is reduced, net profit will jump very fast.
54.1. Chandravadan |   Link |  Bookmark | October 11, 2015 12:20:29 AM
I like your observtions & coclutions, particularly no #3, I think you are right about the future of this company. Plese do write in future about other IPO''s, so that new investors like me will get the right guide line.
53. Roadside Romeo |   Link |  Bookmark | October 10, 2015 8:27:24 PM
There is a lot of incorrect analysis going on. I don''t want to point at people personally. While I am not advising to subscribe to CCD or avoid, I think everyone needs to look at the facts and numbers correctly before drawing random conclusions like Indians will only drink tea/coffee at roadside stall, or climate is too hot, this is loss making company etc.
One of the best way to evaluate CCD is what is valuation for main coffee business, becathe holding company structure makes analysis slightly complicated.

#1. Easiest is valuation of Mindtree and Sical. CCD''s holding in both these companies at today''s market cap is approx Rs 2500-2600 cr. You can apply whatever holding discount, but I think institutional investors are ok with 20%. So that implies Rs 2000cr value for these companies. Both are profitable and growing, so this value should go up over time.

#2. They have 91 acres of clear land title which can be developed into 9.7 million sqft. Of this 2.9 million is already developed and leased out. From analyst meet and some brokerage reports, people are valuing all the real estate at Rs 1000cr. With 20% holding discount, this comes to Rs 800cr

#2 Ways2wealth and other small investments at book value are atleast Rs 150 crore.

#3 With IPO at Rs 5600 crores on pre-money, that implies Rs 2600 crore market cap for coffee business after adjusting for above divisions. Standalone holding company debt is Rs 1400cr from page 89. Coffee business debt is Rs 400 cr from page F-234. This takes enterprise value for coffee business to Rs 4340 cr (2600cr + 1400cr + 85% of 400cr).

#4 Coffee business made EBITDA of Rs 200 crore for fiscal FY15 from page F-236. Adjusting for 85% stake, the EV-to-EBITDA trailing multiple becomes 25.5x. If one simply multiplies qaurtr 1 numbers by 4, they will EBITDA of Rs 225 crores for fiscal FY16. So forward multiple is 22.6x. This compares to Jubilant Foods at nearly 40x based on 3-4 reputed brokerage reports like Edelweiss, Infoline etc.

Now whether you want to buy the shares in IPO or not is your decision. I am happy to debate my analysis.
52. NKD |   Link |  Bookmark | October 10, 2015 4:24:43 PM
indigo airlines ipo



InterGlobe Aviation, which operates low-cost carrier IndiGo Airlines, is expected to launch its initial public offering (IPO) later this month, with October 26-28 as the most likely date, three people familiar with the development told FE.
Sources said the price band is being finalised, but largely settled-upon, based on feedback from investor roadshows held on three continents last month. The company is also mulling a 3-5% discount to retail investors but a final decision along with the minimum bid size will be taken in 7-10 days, one of the sources said.
51. Roadside Romeo |   Link |  Bookmark | October 10, 2015 3:23:20 PM
Absolute crass and misleading analysis by Septa.
Here is the truth:-
>> On 2 March 2015, CCD issued 344,824 shares at price of Rs 2900 per share. This was done to Nandan Nilekani, Rakesh Jhunjhunwala and other. This is on page 110-111.
>> on 8 May 2015, bonus was announced at 7:1 ratio.
>> This makes effective acquisition price at Rs 362
51.2. Roadside Romeo |   Link |  Bookmark | October 10, 2015 7:33:47 PM
From whatever I read and understand, the thousands of acres you mentioned are not part of this company. They are part of promoter''s personal holdings. However, there is no point ascertaining any value to those land parcels. Most of that is agriculture land used for growing coffee plantation.
51.3. Septa |   Link |  Bookmark | October 10, 2015 8:12:46 PM (4000+ Posts, 4600+ Likes)
Thank u but these estate have value the going rate is around 12-15 lakh an acre anyway thank for the info
50. Patel Bhavin |   Link |  Bookmark | October 10, 2015 2:34:24 PM
Kya chalraha he CCD Premium ?????
49. Septa |   Link |  Bookmark | October 10, 2015 9:50:22 AM (4000+ Posts, 4600+ Likes)
@bullishbear u wrote "The fate of Nandan Nilekani, Rakesh Jhunjhunwala and Ramesh Damani is trending on Twitter. Poor chaps are holding shares bought at @362. But something good happened I got to know what conglomerate discount is. IPO Central says it is not good for small guys like me."

However after reading the red hering i think Nandan Nilekani Rakesh Jhunjhunwala ramesh Damani also Birla scion personal PE will have the last laugh on May 2015 all these share holder including Mr siddarth were alloted bonus shares 7 shares for every one share they held meaning the technical cost per share would be RS 45.....
this is based on two fact first info on red herring second the info that Nandan Nilekani post issue holding would be approx 1.15%. post issue vauleation is 6800 cr so Nanadan Nilekani 75 cr is post bonus issue his actual investment is only less then 10 cr for a skate of 1.15 %.

so deal is very very very sweet for these privilege investor IMO this is day light robbery and the fact is no media channel will high light this

I still maintain this issue is fundamental very poor issue should be big avoid
49.3. Bullishbear |   Link |  Bookmark | October 10, 2015 5:26:31 PM
Thats good analysis, I just picked this from ipocentral.in

To be sure, it wouldn’t make sense for Nilekani and Co. to sell their shares as their average cost of acquisition turns out to be INR362.5 per share which is higher than the IPO price band. However, no such compulsion for Standard Chartered Private Equity which has an average cost of acquisition of INR171.8 per share through its investment in February 2010. Acquisition cost for KKR, which invested around the same time, is also lower than the current IPO price band. This clearly indicates the confidence existing investors have got in Cafe Coffee Day’s business model.
49.4. Roadside Romeo |   Link |  Bookmark | October 10, 2015 7:37:20 PM
To add to Bullish Bears analysis > None of the existing investors are exiting this company. All the issue proceeds is primary nature.
Secondly, as per SEBI rules, all pre-IPO investors are compulsary locked for one year from date of listing. So even they wanted to, they cannot sell till October 2016. Most private equities funds sell part of their holdings alongwith IPO, but in this case no one is selling. Shows that everyone is still confident about long term prospects.
48. jagadish abbigeri |   Link |  Bookmark | October 10, 2015 3:06:09 AM
Many Companies were loss making at pre-ipo, becaof debt. Most of Investors may avoided such co''s. In futire some of them r known as blue chip companies.My belief is that Coffee day will be one of that. why i say CCD will outperform i will tell In india there are millions of people are millioniares, billionares are there.While they go abroad most of them simply thought why our country is not as that country.But none of them think I should utilise my wealth to establish things by which my country looks like as rich as other devloped countries & my country people also feel that world class facility or service in my country. VG siddattha promoter of CCD was not a millionaire or a billionaire but he dreamed n dared to establish such things to serve world class feel of taste to his naton''s people even though he was laughed n critisised by many people as he wil flop. He dreamed with bared hands but handfull of hopes he has.Such people really have potential to achive anything they want.. He started 1 store at brigade road, banglore now see thosands of all over india. Like Dirubhei Ambani who came with bare hands n achived there are many true tales of many succesdul entreprenurs we often listened,
Most of. south indian Companies & that too Karnataka based Companies were Blockbusters. Look at recently listed Co VRL logistic which created a new record of oversubscription 75x & rosed upto 50% on listing day. VRL Promoter Vijay sankeshwar, I often listened the tremendous success story of him when iam at school. How he grown up with 1 truck to 6000+ now. he has branches all over india. And another big name in indian IT companies, which was started in 10x10 sq feet: Infosys
48.1. Bullishbear |   Link |  Bookmark | October 10, 2015 5:19:32 PM
Interesting! I wonder how you missed the fact that VG Siddharth is the son in law of politician SM Krishna. CCD IPO made good weekend reading and research. Now I''m more convinced that this IPO is not for small investors.
47. Septa |   Link |  Bookmark | October 9, 2015 11:50:56 PM (4000+ Posts, 4600+ Likes)
just read the red herring loan property acres mortgage are some very common word used some good some bad.
however i am not sure this holding company included coffee estate owned by V G Siddhartha is in this holding company the picture is not very clear however info is that V G Siddhartha owns close to 20000 acres some say 14000 acres anyway it is big number the vaulation comes to 1700 cr to 3000 cr mindtree puts another 2000 crs.
46. Priyesh tibrewal |   Link |  Bookmark | October 9, 2015 10:47:31 PM
Peppertap Rs150 on your first order on250 means 60% off coupon code VQAC2...limited redemptions hurry!
45. NKD |   Link |  Bookmark | October 9, 2015 7:00:52 PM
WHAT IS THE OF APPLYING NON SENSE COMPANY ONLY LOOTING BOTH WAYS BY SELLING COFFEE AT HIGH RATES AND BY SELLING SHARES AT HIGH PRICE OF LOSS MAKING COMPANY ALREADY TOLD ITS A FLOP SHOW....
45.2. Roadside Romeo |   Link |  Bookmark | October 10, 2015 3:22:45 PM
"If mass people love 5rs cup and only 5% drink coffee at 100 rs cup", then most companies like Maruti, Titan, Eicher Motors should all be bankrupt.
>> Indians buy 200,000 - 250,000 cars per month. If you were to divide total population of country by 5, then total households is 240 million. Of these, atleast 30% population is defined below poverty line. So, 160 million houselholds buy 2.5 million cars per year. The market for cars is HUGE. Even if 5% of population drink 100 rs coffee, that makes it 65 million people. That is almost equal to population of France or Germany or UK.
>> Eicher Motors sells motorcycles that start at Rs 150,000. This is while Bajaj and Hero start at Rs 50,000. Even then today Eicher Motors market cap is more than both the competitors combined.
Please don''t make generic statements and equate that CCD business model is failure.
45.3. Bullishbear |   Link |  Bookmark | October 10, 2015 5:22:04 PM
Roadside Romeo. Check again, both Bajaj and Hero are more valuable than Eicher, forget about combined market cap.
44. NILESH RANA |   Link |  Bookmark | October 9, 2015 6:58:18 PM
premium
43. Uchit Patel |   Link |  Bookmark | October 9, 2015 6:36:54 PM (500+ Posts, 1500+ Likes)
Many analysts are saying promoter has some good investments. I want to share something about CCD’s investments. CCD has four main verticals of business coffee 50%, logistics 36%, financial 8% and technology parks 4%.
Coffee - This business is already in loss.
Logistics – CCD invested in logistics through Sical Logistics Ltd. CCD has 53% equity in this company. This company is not paying any dividends since 2003. Last bonus issued in 1996. Last five years profit 270, 100, 110, 130 and 100 million Rs. Company is not in shape to pay dividends to investors since last 13 years. I think promoter’s investment is in loss making company and not earning any income from this investment.
Financial – CCD has subsidiary W2W Securities and some investments in IT companies like Mindtree, Magnasoft etc. Out of this only Mindtree investment is giving returns. However, financial vertical contribute only 8% and out of 8% mindtree’s contribution is only 2 to 3%.
Technology Parks – CCD has some subsidiaries, which is in business of construction of IT parks SEZ and non SEZ. We know the condition of real estate business in India now. However, this contributes only 4%.
I can say more than 95% of CCD’s business is in loss. Main businesses coffee and Logistics (total 86%) are in loss since many years.
How can we believe promoter has some smart investments?
In addition, Mr. Siddharth told in investors meet that he is ready to sale his noncore businesses if he get good offer.
I do not have much time to read whole 800 - 900 pages draft, otherwise I will provide more details.
Please note this is only my analysis.
43.1. D Pandey |   Link |  Bookmark | October 9, 2015 7:00:17 PM
Very good information. We need analysis like this.
43.2. NKD |   Link |  Bookmark | October 9, 2015 8:55:56 PM
one more thing timing of the ipo is poor...
42. pinkyjain |   Link |  Bookmark | October 9, 2015 5:20:34 PM
CCD IPO
GMP 3-4 No buyerrrrrrrrr

Indigo ipo

Gmp 13-15
Kostak 550

DATE 26TH October
Price 400-418
Retail discount 13 Rs
41. ABHISHEK AHMEDABAD |   Link |  Bookmark | October 9, 2015 5:18:37 PM
Coffee Day Enterprises Ltd      
Retail Category Up to Rs.2,00,000/-      
Bid Price Band from Rs.316/- to Rs.328 /-      
No of Shares       Amount @ Rs.328/-
45      14,760
90      29,520
135      44,280
180      59,040
225      73,800
270      88,560
315      1,03,320
360      1,18,080
405      1,32,840
450      1,47,600
495      1,62,360
540      1,77,120
585      1,91,880
Issue opens on 14/10/15 closes on & 16/10/15       
Cheques/ Demand Draft to be drawn in Favour of      
"Coffee Day Public Issue – Escrow Account - R”      
40. NILESH RANA |   Link |  Bookmark | October 9, 2015 4:45:30 PM
RATING
39. jaimim nai |   Link |  Bookmark | October 9, 2015 1:48:06 PM
Coffee Cafe Day ( CCD ) IPO:
Dates : October 14-16
Price Band: Rs. 316 - 328
Bid lot: 45 shares
Minimum Amt:14760
Retail: 35% - Rs. 397.25.
39.1. EBERAJU |   Link |  Bookmark | October 10, 2015 8:33:26 AM
Retail: 35% - Rs. 397.25.

may I know about it
38. anu rag |   Link |  Bookmark | October 9, 2015 12:49:59 PM
OPEN PRICE 450