My view on NBCC: Just going by the P/E multiple, the valuation of the company works out to 8.05(for a retail investor @ 100.7) factoring in an EPS of 12.50 for FY12. Competitors like NCC, IVRCL are available at a P/E multiple of around 23. However B/V seems to be a more appropriate multiple to value this company as earnings of most Infra companies are distorted due to an uncertain macro environment. Going by the BV multiple a valuation of 1.52 for NBCC may appear costlier when compared with the likes of IVRCL(P/BV @ 0.96) and NCC(P/BV @ 0.61). However for a company with zero debt, double digit RoE and consistent dividend paying history this seems justified.
"It is difficult to find a single construction or engineering company, which has negative working capital, zero debt, return on equity in double-digits, huge cash in its books and consistent dividend paying history, all under one roof. " - Sourced from Business standard.
Hold on to this counter if you are a long term player!.
This is my first message on this platform. Though I have been reading all the messages in recnt past. At the start may I say that I am a big fan of Sridhar (he is not posting now), Ravi, Alibhoy, Gundu Anna and others. I think that NBCC IPO will give decent retrun as QIB portion was subscribed more than 7 times and retail was relatively low at about 3 times, who spoil the IPO gains. My feeling says that the listing day band would be about 102 - 111. Sorry to differ from Fundu Anna. This is my thought. Only time will prove us right or wrong.
NBCC IPO unlikely to give major listing gain as PSU's have very negative image in the market now. Some loss cannot be ruled out as it will list in t-to-t segment.
Investors who has invested Rs. 100000/ in ipo/fpo/bonds and Rs.200000/ in mutual funds. Income tax department sending notice undes section 147 and 148, investors be careful.