SKS Microfinance Ltd IPO Message Board (Page 43)

Dear Natarajan,
I said I will not be applying long back even when SKS Micro was not in news like now & have already spelt out the reasons for my decision.You may apply for good gains as scarcity premium will always be there for such an Issue.I have exhausted 8 full applications in my lucky EIL which has been my bread & butter winner & earned me lot of money at 3 different times

SP TULSIAN SAY- GO FOR IT AT UPPER BAND.

BEFORE APPLYING PLEASE CHECK THE RESULTS OF LAST 10 SP TULSIAN RECOMMENDATIONS, U WILL UNDERSTAND WHAT TO DO.

@ 466 IPO Expert

No body is trying to fool any one on this blog they are presenting facts and argument....whilst you have none.....

For your kind information...why dont you rewind your memory few months...back....a unique business like jubiliant foodworks...which was subscribed at 34-36 PE ratio......was oversubscribed 31 times and Kotak...yes my freind KOtak was BLRM of the issue...!!

RPower issue was of 10500 crore. This one is just 1500 crore.....how does liquidity crunch come in. DIIs and insuarance firms....have enough liquidity to even enter after listing just as in case of Jubiliant....

You said other finance companies list half the price.....is their CAGR 170%...YOY for last 5 years...?..........Which finance company doubles its revenue every three years...

And its fair value...FY11 EPS comes out 1274.....and is expected to list around 1100 and hgo upto 1280 odd....the only person who will be the loser will be one who shorts this....

Boarders i have shared the link of Moneycontrol....and Angel Broking ....Why dont you guys go thru valuations and MFI....sector outlook....before forming conclusions...?

READ THIS REPORT DATED 21-07-2010

SKS Microfinance IPO price band could be between Rs 650-Rs 700
July 21, 2010

in Microfinance India


Market analysts expect SKS Microfinance to set a price band of Rs 650 – Rs 700 for it’s IPO.This would make SKS Microfinance’s valuation touch US$1 billion

With a price band of Rs 650-700 a share, SKS Microfinance could be looking to raise around Rs 1,500 crore through its initial public offering. SKS Microfinance is India’s first microfinance company to go public and retail investors are expected to get a discount of 10-15% when compared to institutional investors , a senior investment banker added.

In february 2010, Tree Line Asia a hedge fund based in Hong Kong had picked up a stake in SKS microfinance at the price of around Rs 637 per share.The hedge fund had bought the shares from the senior management of SKS Microfinance.This included it’s chairman Dr. Vikram Akula and CEO Suresh Gurmani who have sold their stakes to Tree Line Asia. This transaction valued SKS Microfinance closer to Rs 4,590 crore, or close to $1 billion on post-issue share capital basis and is expected to be the benchmark for the upcoming IPO.Early Investors in SKS Microfinance reap multiple returns

If SKS Microfinance fixes it’s IPO price band at Rs 600-700 range, then it would turn out to be a multibagger investment for its early investors like Unitus, Vinod Khosla, Sequoia Capital India and Small Industries Development Bank of India (SIDBI). As per the share sale price to Tree Line, these players are expected to make anywhere between 6 times to 18 times (6x to 18x) of their initial share acquisition cost.

Sequoia Capital , the largest shareholder and promoter of SKS Microfinance holds a 22% stake in SKS Microfinance.It has invested nearly Rs 124 crore in the firm since 2007.The shares in SKS Microfinance were brought in both fresh capital infusions and through secondary purchases from Vikram Akula and Unitus.

The average cost of acquisition for Sequoia Capital is approximately Rs 88 per share, which means Sequoia could be getting 6x or more depending on the IPO price band. Sequoia Capital is also selling nearly 4 million shares in the issue, with its stake expected to come down to 14% after the issue.

Unitus which is one of the first venture capital investors in SKS Microfinance, is also expected to get nearly 14x or more on its investment. The microfinance focused venture fund is managed by Elevar equity and has already sold a 3% stake to Sequoia last year for Rs 47 crore.

Vinod Khsola, the Indian born venture capitalist and co-founder of Sun Microsystems is set to get nearly 18x or more on his initial investment.Vinod Khosla was an early investor in the firm and invested way back in 2006.

Other investors in the firm include Sandstone Capital, which invested Rs 250 crore last year at the price of Rs 300 per share. Sandstone will have a 11.6% stake in the SKS Microfinance after the IPO.

yeh IPO kanhin negative jadoo ki jhappi na de de.

baba re baba , kya price band hai sidhe 985, kal ko agar 500 - 600 list ho gaya to sidhe hospitalise kar dega.

SKS 2-3 TIMES RETAIL

IN PUBLIC INTREST

remember earlier this company was planning to bring this issue @ 600-700 price band. all the media chanells, pre-price band research reports and even management itself was saying(directly or indirectly) that price band will be 600-700. some four months before privare placements were done @ 300. but because of the greed of promotors they have priced the ipo @985/-.

INVESTORS should listen to all but put your money in an IPO if they have full confidence in pricing.

PITANE KE BAAD KOI BACHANE NAHI AATA. its fair price is between 300 and 700 and over a period of time this will happen.

@ 469--THANKS gem ipo finder

SRINI

ALL THE MASSAGES ARE MINE SRINI.I HAVE SPAM THOSE NOT MINE.

469 @ GEM IPO FINDER

This is not original gem ipo finder message, dont get confused.

MILINDS.

YES ITS TRUE SKS = 40% AND BCORP = 60% ALLOCATION OF MY FUNDS.

U KNOW WHAT HAPPENS THAT IN STOCK MARKET SOME TIME U HAVE TO BE WITH CROWD NOT CONTRARION, I CANT BE THE SINGLE BULL IN SKS IF SO THEN U CAN FORSEE MY BAD POSITION.

I HAVE ONE MORE PRINCIPLE THAT I DONT INVEST OR LESS INVEST IN AN IPO WHERE 50% OF APPLIED SHARES ARE ALLOTED IN CASE OF SKS RETAIL WILL BE LESS THAN 2 TIMES THATS WHY I HAVE LOWER ALLOCATION TOWARDS THIS ISSUE THAN BAJAJ WHERE RETAIL MAY BE AROUND 4-5 TIMES

NOW THE COMPARISION IS BETWEEN SKS AND BCORP:

SKS IS NOT A BAD CO AND NOT VERY VERY HIGHLY PRICED IPO, ITS MODERATELY HIGH PRICED. WE HAVE TO ACCEPT THE MOST IMPORTANT TOOLS TO JUDGE A FINANCIAL STOCK IS ITS "PRICE TO BOOK VALUE",SKS AT 985 WILL TRADE AT P/BV OF LESS THAN 4 TIMES IT WE COMPARE IT TO OTHER LISTED PEERS WE DONT FIND IT IN INDIA BUT GLOBALLY MF COS TRADES AT P/BV OF AROUND 7-8 TIMES.PE RATIO IS NOT THE CORRECT TOOLS TO JUDGE A FINANCIAL STOCK AND THAT TOO FOR A CO GROWING AT 100%, IT WILL BE A "MIRAGE TOOLS". SO ITS P/BV LEAVES AMPLE HEADROOM TO APPRICIATE POST LISTING FROM RS.985.MY LISTING TARGET WOULD BE RS 1050-1100 AND THAT IS A MODERATE EXPECTATION GIVEN ITS DISCOUNT AND GMP IF ONE INVESTS ONE LAC IN THIS IPO HE WILL EARN AROUND RS.5000 AS RETAIL WILL NOT BE SUBSCRIBED MORE THAN 2 TIMES.

WHEREAS BAJAJ CORP IS ALSO NOT " DOODH KA DHOOLA" THE PROMOTERS HAVE EATEN ITS ENTIRE RESERVES IN FORM OF DIVIDEND JUST BEFORE IPO MAKING IT A " KHALI DABBA CO" NO DOUBT IT ALSO HAS GOOD GROWTH, BUT FINANCIALY ITS NOT VERY SOUND CO.

YOU GUYS LOOK AT THE DRHP PAGE NO 7 AND 8 :
ITS NETWOTH AS ON 31/03/2009 WAS RS.51.5 CRORES BUT AS ON 30/12/2009 IS RS 26.1 CRORES.

FOR THE 9 MONTHS ENDED THEIR PAT WAS RS 56.1 CRORES BUT IN THAT PERIOD THE CO HAS PAID RS 81.8 CRORES AS DIVIDEND INCLUDIND CDT AND RS 5 CORES HAS BEEN CAPITALISED FOR BONUS SHARES.

ON NET BASIS THEIR NET WORTH WOULD HAVE BEEN RS 108 CRORES ( 51 +56 ) BUT ITS RS.26 CRORES THEY HAVE EATEN, THEY DONT WANT TO SHARE THE CREAM TO MINORITY NEW INVESTORS, THEY WANT TO SALE ONLY THE GROWTH OF THE CO NOT ITS FINANCIAL SOLIDARITY. THIS CO IS BIGGER CHOR THAN SKS ON VALN FRONT BUT PEOPLE ARE NOT CRYING HERE BECAUSE RETAIL PUBLIC IS REACT ONLY ON THOSE ISSUE WHICH IS HIGHLIGHTED TO HIM NOT SUPRESSED FROM THEM.

HOPE I MADE TO UNDERSTAND THIS TWO COS TO OTHER FELLOW MEMBERS, SKS IS NOT THAT BAD CO IN COMPARISION TO BCORP THAT PEOPLE WILL SKIP SKS AND INVEST IN BCORP. I HAVE 40:60 RATIO FOR SKS: BCORP, I CANT LEAVE SKS FOR BCORP.

BCORP IS A SMALLER ISSUE SO ITS NEGATIVES CAN BE EASILY UPPRESSED AND CAN LIST HIGHER.

CRTICISM ON MY ABOVE POINTS ARE INVITED FROM FELLOW BOARDERS.

@Ravi, Bangalore,
What is your call on SKS microfinance?

Dear Sreedhar,
Are you sure you are not applying SKS? I am in two minds and don't know what to do.

MAVERICK INVESTOR DPNT TRY TO FOOL PEOPLE IF YOU HAVE APPLIED DOING A BIG MISTAKE.

DONT FORGET THIS IS 1653 CRORE IPO AND DURING TIME OF LISTING THERE WONT BE LIQUIDITY LEFT ENOUGH TO CONTROL THE PRICE.
SAME FATE HAPPENED WITH NHPC,RELIANCE POWER AND SAME WILL HAPPEN WITH SKS FINANCE DUE TO UNCERATINITY IN BUSINESS MODEL.
YOU WILL SEE EVERYONE WOULD LIKE TO SELL THEIR STOCK ON OPENING THINKING OF MAKING SOME LISTING GAIN BUT THEY WILL AGAIN BE DISAPPOINTED.

DONT FORGET THERE ARE MANY GOOD FINANCE COMPANIES TRADING AT HALF ITS VALUATION SO ALL ITS HYPE AND HYSTERIA WILL BE OVER ON DAY 1 OF LISTING AS EVERYONE IS LOOKING FOR LISTING GAIN IN THIS COUNTER.

IT WILL DEFINETELY BE ANOTHER RELIANCE POWER EXPENSIVE VALUATION AND WILL REACH AT ITS FAIR PRICE DEFINETEL AFTER LISTING SAME AS RELIANCE POWER AND DLF.

ITS FAIR VALUE IS 650 RS ONLY

Hi Guys,
SKS:
I would suggest that one should go ahead and apply for SKS shares both for short and long term gains. The space in which it operates has tremendous potential for growth. If we look at emerging market micro fianance companies the price to book ratios are as high as 7-8 times. With SKS having a P/BV of 3.5x does'nt look expensive currently even with a moderate RoE which would further go down with current dilution. However, with growth in earnings with the deployed capital will take the earnings grow.
Further, to add-on about comparing EIL & SKS QIB subscription, we need to understand that the money raised by SKS is far higherr than EIL. The QIB book itself must have attracted almost Rs16,000crores or US$3bn, which by no means is not a small amount. I believe their would be a rush of investors getin in the counter on the first few days of listing and even post that. So my frens apply, sit back and enjoy the ride.

I wish businesses and stock price could have given returns and run well by ethics and cheap valuations. one should understand that good things do not come cheap, and you have to pay a premium for that. Just a thought.

463 IPOEXPERT

u are right but here in INDIA we can not make public understand these things.

here every body loses money in overpriced ipos, but after loosing money they come again to loose further.

every time they try to oversmart market but at the end of the day, market oversmarts them.

they applies for rpower (seeing good hype created by management, grey market, nes, media attention etc) makes hugh losses.

they applies for fch (long term story, india retail growth story etc) makes hugh losses.

they applies for Indiabulls power ( because earlier Indiabulls fin delivered good returns) but again makes heavy losses.

now here again they will apply sks at 935 (beacause of media hype, grey market, long term story, another educomp, etc) but will end up loosing heavily because in this ipo , 55% is offer for sale, that means old investors are booking their profit at heavy premium.

INVESTOR should apply in this IPO for long term because in the short term share prices of this ipo will remain significantly lower than issue price for at least next many years like RPOWER< FCH< IBPOWER etc.

do not blindly apply in thos ipo looking at qib subscription. it is very expensive IPO. Morever there is news today one of its memebers is backing out becauseof greed of promoters.

they will not be able to maintain their margins in future as banks are providing cheap loans to poor.
so they might have 20% drop in next quarter results.
also average cost of acq by promoters is only 300 rs.

this will be another reliance power,future capital in making

Dear boarders


QIB subscription deatails are

engineer 23.43
sks 20.38

retail
engineer 2.99
sks 0.16 (still last day to go).

(engineer was 0.41 times one day before closing).

there fore most probably sks will not go more than 2 times in retail.

Eil was subscribed higher (23 times) and still most of us expect it to come down to rs. 300 or even lesser when it lists that too at a low equity of rs. 330 croes for retail. as per my reading to this blog, it apperas that grey market premium of eil is just rs. 6-7 that means 296-297 (if i am right).



sks subscribed lesser in qib, and still many of us think that it will list at 1100, 1200 or even higher.

in my opinion. grey market premium of sks is just to induce investors to apply. otherwise we can easily see that to get a premium of rs. 6-7 (just 2%)only, qibs applied to the tune of 23 times. but where there is a grey market premium of around rs. 60, 70 or 75 (around 6-7%), qib applied just 20 times.

I may be wrong but in my opinion there is something going wrong. EIL will go higher on listing and sks may tank on listing.

becasue, if there was a actual worth in sks then definitely it could have gone atleast 50 times in qib.

i think its better to avoid sks and put money in bajaj, which appears a relatively safer bet.

In DELHI premium of SKS came down to 64 -65 yesterday today it is hovering around 75.But there is lot of uncertainty.

In Bajaj Corp there are no sellers even at 120 while there are ready buyers at this price.

EIL premium has increased to 6-7 rs.