Standard Chartered PLC IDRS Message Board (Page 7)

Dear Natarajan,
There was a discussion between the greattttest Tulsian & Sanju Verma reg.(Sanju Verma had advised against applying for JP Infra IPO) JP Infra when it was at 93.I entirely agree with her & said it deseved 9-10 K market cap & that is where it will settle).She said it will settle at 85.Our hero advises to buy in bucketful at 93.An excerpt taken from the interview----
You disagree. What do you see as a fair value for the stock?

Verma: I do not necessarily disagree in entirety. Just to put things in right context, about two-and-a-half weeks back, I was on your channel and the question was asked as what the fair value of Jaypee Infra is and whether I would subscribe to it. My answer remains the same. I do not see any reason to do a somersault on that. I had said that my gut feel says the stock price will stabilise at lower than the lower end of the band, which means between Rs 95 to Rs 100 or thereabouts. My sense is that the stock will perhaps hold at about between Rs 85 to Rs 90. The reason why I have brought the range down now to Rs 85-90 is simply because the broader picture with respect to overall markets has in the last few weeks become that much more circumspect.
I think in the case of Jaypee Infra, you need to take a call as a potential investor as to whether you are buying it because of its land bank and real estate story or whether you are buying it because its an infrastructure proxy, which combines the best of both construction and real estate. As Mr Tulsian pointed out, I think the negative bit here is that the infrastructure story is on paper at this point in time because the toll revenues from the Yamuna Expressway will optimistically speaking filter in, in FY12, i.e. if the project is completed as per management's claims in 2011. Were there to be an execution delay, then the toll revenues will start kicking in only by FY13. So the infrastructure story is slightly far fetched at this point in time, which means that as things stand now this has to be valued in the context of what valuation you would give to a real estate player. I think that is where my worry stems from.

I had said this in the past and I am reinforcing that, the fact of the matter is that a DLF or a Unitech is available to you between 15 to 17 times on FY11 estimates. On FY12 estimates, DLF and Unitech are even cheaper between 11-13 times at current prices and both these companies will give you a compounded earnings growth of between 35-40% plus over the next two years.

Now, in the case of JP Infra they are lot of if’s and but’s. The point that I want to make is that A) first speaking of the expressway what if the toll charges are not in the region of 1.8-1.9 per km, which most analysts seem to be working with maybe it will be in the region of 1.3-1.4 per km, which is what is charged along the Mumbai- Pune expressway a far more industrialised belt. So to start with, to assume that the toll revenues in FY12 will be at Rs 500 crore, assuming a toll charge of 1.8 per km is to start with very optimistic. If that were to come down to 1.4 then you are not talking of Rs 500 crore by way of revenues from the expressway, but just about Rs 350 to 390 crore. So there are too many variables in the equation, which make the picture not as pretty as it seemingly would see at this point in time.

Speaking of it being a real estate proxy, forget about price to earnings, maybe that is necessarily a good parameter to evaluate a real estate play be it a DLF or Unitech or Jaypee Infra not withstanding the fact that Jaypee Infra is anyway trading at a 25% plus premium to its most established peers within the space. Even if you were to look at it from an EV to EBIDTA, from a price to sales, or even a price to book; on a price to book, mind you DLF and Unitech are trading at between 1.3-1.5 times whereas as things stand now Jaypee Infra is at three times plus, which is certainly expensive.

So my sense is it is a good bet for alpha seeking investors, people who are chasing yield. But for people who are circumspect, people who are wary, I think it would do them good to certainly wait for a while because I won’t be surprised if this trades down further. Yes, the management has a stupendous track record behind it.
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So I dont know how its fair value is 100.I will dip my toes at 80 & buy in good quantity at 75.
For complete discussion between Tulsian & Ms Verma see below
http://www.moneycontrol.com/news/ipo-new-listings/jp-infra-lists-below-issue-price-should-you-buy-it-now_459412-2.html

IPO Market

Our promoters don't want to leave money on the table. They want to maximise the price. They need to have a heart to give money and let others make money. Even the government does not want to leave money on the table, it wants to avert criticism that it gave PSU shares too cheaply.

IPOs invariably tend to attract huge media hype and analyst comment. No doubt this is a result of the substantial marketing spends carved out of IPO proceeds. Merchant bankers, PR and advertising agencies, and numerous others are rewarded well to promote IPOs. Analysts and journalists jump on the bandwagon, and with positive recommendations outweighing the negative, it is no surprise that most equity issues are highly over-subscribed.

It is also no surprise that a majority of IPOs do badly!
But what else do you expect? After all, the promoters have the advantage of superior knowledge – about the company, its prospects, industry dynamics, competition and everything else that could determine its future performance. Obviously, they look for the best price at which to dilute! If the market pricing is below the intrinsic value of the stock, they would not sell. In contrast, when pricing is much higher than what they think its worth, they will be eager to sell. You only have to compare the flow and ebb of IPO volumes with Sensex values to realise this. Why do you think IPOs dry up when markets are down?

What is surprising, however, is that gullible investors like us get fooled, time and again. There is now considerable statistical and anecdotal evidence to suggest that most IPOs under-perform the indices and broad markets. I don’t know why this illogical investor behaviour recurs, but much could be ascribed to the “greater fool” theory. The pre-IPO hype leads us to believe that a quick, profitable exit is highly likely, so who cares about intrinsic value! In other words, even if we are not convinced about valuations, we have faith that a “greater fool” will buy in at a higher price.

We might blame the promoter or merchant banker or SEBI or the government, but the truth is that we investors have only ourselves to blame. By making decisions on perceived popularity rather than on fundamentals, we allow greed to take precedence over logic. If you know that valuations are stretched, but still invest your hard-earned money, you cannot blame those whose job it is to sell the issue. And if your defence is innocence or ignorance, then maybe you should not be investing directly!

There’s much more that I want to say about the IPO markets, but will leave that for future blogs. For now, suffice to say that IPOs in general will not make you as much money as the secondary markets – the dice are too heavily loaded against the investor!

dear prince ,

for some period

stay away

from


any of I P O.

this is not a good time , even for any good co.

.

sir,GEM IPO FINDER, SREEDHARBHAI

FAT PIPE NETWORKS LTD.
OPEN 7 TO 9 JUNE
PRICE BAND Rs.82 - 85.
KOI IDEA SIRJEE..........?

PLEASE REPLY SIR..........

PRINCEEEEEEEEEEEEEEEEEEEEEEEEEEE

MUMBAI -(Dow Jones)- Fatpipe Networks India Ltd. has set an indicative price band of INR82-INR85 for its proposed initial public offer, the company said in an advertisement Monday.

The issue to raise up to INR490 million will open for subscriptions June 7 and close a couple of days later, the advertisement in the Financial Express newspaper said.

The advertisement didn't say how many shares the company plans to sell.

Fatpipe Networks' products are used in Internet-related and other networking activities.

Keynote Corporate Services Ltd. is the lead manager to the issue

192. Guest

It is large issue. Domestic & FIIs cannot ignore this issue owing to its size.

It will mimick the quotes of London Stock Exchange (LSE) & Hong Kong Stock Exchange (HSE). Your story cannot be believed.



Around 10% listing gain possible depending upon quote at LSE. If global markets melt-down at the time of listing, then, investors may incur loss at listing.

Fatpite Networks India Ltd.
date 7 to 9 June

New IPO
Fatpite Networks India Ltd.
Price 82 to 85
size 49 crores
57 lakh shares

SahranpuriJi,
You should have told me beforehand,I would have sold my applications at 2700.In my city no grey market activity takes place.Hope it will have good listing as there is not much difference between London price & IDR (only 5-6 percent).If you find any deals in grey market please do inform me.By the way what is your plan?Will you hold it or sell if you get profit.I am thinking of buying it after listing.By the way Cox delivered very good results,Its margin also increased.What happened to Jubilant foods.I had already sold them after results which I did not find satisfactory.I think it is more than fairly priced & any disappointment in results will result in a sell off.Already it sold off from 340 levels to 280 levels after results.ILFS results were excellent.I added few more at 262.

sreedhar yes i hv applied at cut off .

i n delhi there are buyers at 2700 rs per application.

so ipo seems to be fairly safe.

Yaar how is it possible that such a reputed company of stanchart can give under table bribes. although i agree that issue is a flop one with nothing left on table for retail investors, but still i think it is not possible for them to pay such hugh sums as bribes. may be they have assured some mutual fund investors to apply in their ipo and in return standard will also apply in some ipos managed by those mutual funds in future.

any way it looks like that this will list at a discount.

R.K. 188
Guest 192

i also fully agree with u. We (our Company) were also offered an uder the table discount to apply in this ipo ( In HNI Segment). we have also put some money into it. and i am also very much sure that our company owners have received some thin g for making application in this fpo. they did not bid for ipo till last day 2pm. but after some negotiations after 2pm they immediately put hugh money in this ipo. i am very much sure that our company owners have striked a very good deal may be even mote discount than retailers.

BUY RECLTD. AT NOW ANY PRICE...BECAUSE OF ITS TARGET IS AN UNEXPECTED...390/- WITHIN 2 TO 3 MONTHS....AND ALSO BUY NITIN FIRE PROTECTION INDUSTRIES LTD... TARGET OF ITS 540/- WITHIN 2 TO 3 MONTHS....BOTH OF THIS EXCELLENT COMPANY..SO CHEERS...

Price fix Rs. 104/- (Retail 98.80)

Allotment on 07 June 2010

Listing on 11 June 2010

Confirm

Fix Price Rs. 104 per Share

standard chart. will list around 10% premium

Thanks @186 & @187 for your reply. I am new at this, and just discovered this board. I followed the advice of Mr. SP Tulsian and applied at Rs 100. Reading previous posts on this site it seems Mr SP Tulsian does not enjoy a very good reputation among members of this board.

NEW IPO

FAT PIPE NETWORKS LTD.

( IT CO.)

OPEN 7 TO 9 JUNE

PRICE BAND Rs.82 - 85.

.

under the table deal has been finalised with the qibs/ fund managers for 10% discount to get this issue bailed out.

Now fund managers have made money(under table), they know very well that the share is not worth rs. 100 they will try to dump the shares within seconds of listing.

the same was the game in IBPOWER and the same is the game here. IN IBPOW, the compant paid bribes to fund managers to subscribe the issue, but after listing all the allotees including Mutual Funds vwere hugh sellers. They are not even buying IBPOW @ 30/ and at that time they were ready to buy @ 45/- with 40 times oversubscription. all the power shares including ADANi, JSW, RPOWER have improved but not IBPOW. because fund managers know that they got 5-10 rs. bribe for alloted shares and the worth of shares was less than rs. 25/-, why should they buy even at 30/-.

now once again u will see that in STANCHART, fair value is 30% less than what is current market price at lse because of taxation issues,non fungibility, IDR management charges for dividend etc., no voting rights, no FII intrest, currency fluctuation, ban on various insurance companies to participate etc. Fund houses managers are bribed enough to subscribe the issue for their personal gains. but after listing no one will be buyer. u will see that the shares will list below par and over a period of time stanchart will touch Rs. 75 mark in indian markets.

i think ye discount par hee khulega