Tree House Education & Accessories Ltd IPO Message Board (Page 11)

IPOPREMIUM,
Based on anchor investor allocation,I do not see much response for this Issue .

shreedhar i am glad to see u.one question retail discount shud alculate on applying or on allotement? it shud apply at 147rs.or shud apply at 135 if one applied at 135.net rate is 127 and amount of full appli. is then calculate at rate of 127.am i right?

Dear Sreedhar,

Thanks for your valuable comments on Tree house. world is full of jealous people just ignore them.

We are vary happy to see your comments on this site.

Chandravadan C. Jani

Dear Shreedhar
Could you pls tell me where i can get the latest updates of the subscription
as you wrote that we have to see the QIB portion of the subscription.

Could you please tell where to get the details.

IPO PREMIUM,
As far as I know ICICI DIRECT & AXIS Bank does give the option to apply till 3pm.Remaining people can apply at 1330 hrs.By that time we can definitely know the trend.I post my QIB projections at around 1100 hrs & 1330 hrs generally If I m available online & my predictions always come true.So lets see.

Dear shredharji, all are here to earn money in this missrable world of inflation.please forgive me if my previous messege hurt you though it was not against anyone just for trend.

Dear Sreedhar,

Thanks for comming back.

Respected Sreedhar,

Happy to see you on the board again. Thank you very much for obliging the fellow boarders requests to come back to the site again. Hope valuable advice regarding applying for the Tree House IPO.

Dear ipoanalyst,
Can you throw more light in your below statement:
IPOanalyst Aug 10, 2011 10:02:51 AM IST | Like | Report Abuse

IPOanalyst's - IPO Recommendations, IPO Comments, Public Profile

Tree House Education & Accessories Ltd IPO
Dear Bond Bond,

I am telling you guys to avoid not because of fun, but having gone through the numbers i feel it is all accounting mechanism used even to show 9 cr PAT for F.Y.11. Pls read the notes to accounts in RHP. The item is payment made for acquiring business rights. These rights were being amortized till last year for 10 years. Suddenly this year the company feels they should write it off over 30 years. Any common man will know it should be written off over the lease period on case to case basis. So if i want to point out the drawbacks there are many, hence my opinion you can 1000% get this stock lower than

Friends,
As for tree house It has come at a high valuation.Jubilant food woks,Talwalkars also came at a trailing PE of 40 & 35 & still evoked a good response.Pre school education is poised to grow 25% CAGR for the next 5 years .So potential is there but it is priced to perfection.
One point to note is Anchor investors came at 135 & even almost all the bids came at 135.So do not apply above 135.Issue will be fixed at 135.QIBs have better understanding of such Issues & Just apply on the last day based on QIB response.
Friends never go by Tulsian recomendations in IPOs,he had clearly asked to avoid Talwalkars & Jubilant & see where they are.
Tulsian is comparing Tree house with NIIT & Aptech which is ludicrous.Tree house is primarily engaged in Preschool education & as such is a niche play in itself.My friend has joined his kid in NURSERY & they are charging 17000 Rs for nursery.People are ready to pay exorbitant amounts for getting quality education to their children & they are not hesitating to reach beyond their means in providing quality education.So it is a good business but since its growth is already priced in we have to see what is the response of QIBs.
Please take a final decision only after 2 pm on the final day.If there is good QIB response then it will be a clear hit.

der sreedhar, u r right,chittor garh team must wake up other wise it will lost all charm,once this site was having.

Dear Sreedhar,

Nice to see you again, can we apply for Tree house education, if yes, is it for listing gains or is it for long time investment

vijaya

Dear chittorgarh moderator,
I have recently been following other blogs & found them to be very peaceful boards without board members spewing vitriol on fellow board members due to Jeoulosy .Better take note as some members create IDs to just target fellow members out of jealousy.If you continue this trend your website will sink into oblivion soon.Already other blogs are showing increase in the number of members while you are showing a decline.I can post 3-4 days messages in which you find nothing useful some fellow asks to trade in so & so stock,some fellow says downgrade so & so person.Is there even a single useful post to other members ?

WELCOME SREEDHAR

CONCENTRATE ON YOUR GOOD WORK PEACEFULLY

OM SHANTI SHANTI SHANTI:

Friends your overwhelming support has forced me to come back to Chittorgarh.My appeal to Chittorgarh modulator is to stop posting personalised attacks.Some dogs as lot of you have already described them have single minded aim to bark at me & they have nothing useful to contribute to this site.One man posts leave alone EPS,Mathematics etc & concentrate on trading in faltu IPOs & he does not specify how to trade them & one barks constantly atme.
Look at this new clown called STAR IPO KING,When did you see Vivek bhauka giving his recomendation on IPOs.For his Kind info L&T after seeing the writing on the wall fixed the issue price as 52 becos it had no choice,I had clearly told they will be forced to reduce the IPO price.I had clearly said avoid PFC,I did not apply & withdraw in PFC,RAMKY,JAYPEE ETC ETC ,I asked friends who had already applied to withdraw to save themselves.
Regarding L&T Finance,I withdrew becos market was falling heavily & I will get a better rate 100 percent.It is my open challenge that I will get a rate less than 52.I m not so wealthy that when given a chance to buy lower I will buy at 52.So that is the simple logic of withdrawing.I want to maximise each & every single penny.PEOPLE APPLIED BLINDLY at 57 also,It was L&T which showed some mercy by fixing the issue at 52.

Friends,This is the last time I m posting reg grade 1&2 issues.I will always apply for grade 1 2 issues but will always be on my toes.I m arrogant to the point that I m ahead of these Issues.If I had not applied for Ravi Distilliries,Acropetal,Birla I would not have made bonanza profit but at the time why did I withdraw Vaswani becos I found out there were heavy withdrawals going on so I saved myself.So all in all I gained in the Issues in which there was to gain & got out of the issues in which I had faced trouble.If I had not applied then would I have made more profit than even coal India,no & everything is safe as Can be clearly seen.

Tree House Education & Accessories Ltd. (THEAL) was incorporated in the year 2006 and claims to be the one of the leading educational services providers in India. As per CRISIL report, they operate the largest number of self-operated pre-schools in India. They have 177 pre-schools under the brand name of "Tree House" across 23 cities in India.

THEAL provide variety of educational services to K-12 schools which includes designing curriculum as well as teaching aids, supplying methods for imparting education, organizing extra-curricular activities for students and teacher training. The company offers playschool and nursery facilities, vacation camps, mother-toddler classes, hobby classes, day care facilities and teacher training course at pre-schools. Tree House Education's pre-schools currently operates in Maharashtra, Gujarat, Karnataka, Rajasthan and Andhra Pradesh. The company is promoted by Bhatia family. For the past three years company has outperformed with a CAGR of 47% plus. It earned net profit of Rs. 9.20 crore on a total income of Rs. 41.15 crore for the year ended 31.3.2011 which was at Rs. 0.51 crore on a total income of Rs. 10.65 crore for the fiscal 2008-09.

Now the company has planned expansion of its pre-school biz along with acquisition of office space, construction of educational complex in Gujarat and Rajasthan and enhances educational services with exclusive rights. To part finance these projects, it is offering 8432189 equity share of Rs. 10 each within a price band of Rs. 135-153. The issue opens for subscription on 10.08.11 and closes on 12.08.11. Minimum application is to be made for 40 shares and in multiples thereof. Retail shareholders will be entitled for a special discount of Rs. 6 per share on the final price that will be fixed for this IPO. Shares will be listed on BSE and NSE. CRISL has assigned IPO Grade 3 to this IPO indicating at average fundamentals of the company. JM Financial Consultants and Motilal Oswal Investment are the lead BRLM and Link Intime is the registrar to the issue.

The merchant bankers JMFC has handled around 13 IPOs in the recent past out of which hardly one IPO is quoting around par and rest are at hefty discount. MOI handled two IPOs out of which IPO of Galaxy Surfactancts got cancelled and the other IPO is quoting at a discount of around 16%.

The company is in new biz that has many gray areas and corporate governance related issues.

Remarks: Based on the latest earnings for fiscal 2010-11 duly diluted on expanded equity post IPO, the issue is being made at a P/E of 45 plus which is very aggressive and thus not worth considering for investment. However, risks aver investors can take a chance for listing gains, if any.

READ NOTES
TULSIAN VIEWS


Not a topper

Tree House Education is entering the capital market on 10th August 2011 via a fresh issue of 84.32 lakh equity shares of Rs.10 each, priced in the band of Rs. 135 to Rs. 153 per equity share, with a Rs. 6 discount being offered to retail investors. The issue, constituting 25.01% of post-issue paid-up capital of the company, closes on 12th August and will garner Rs. 112-127 crore for the company.


Tree House Education runs 223 pre-schools under the ‘Tree House’ brand across 33 Indian cities, catering to the 1.5 to 6 years age-group of the education segment. Two-thirds of the pre-schools are operated by the company, making it the largest self-operated pre-school chain in the country, while balance one-third being franchise-run. Of the total pre-schools in operation, 104 pre-schools (or 47%) are located in Mumbai alone, signifying the geographic concentration of the company’s operations. In addition to pre-schools, company also serves the K-12 segment by provides educational services to 12 schools in 4 cities through exclusive tie-ups.


For FY11, company reported revenue of Rs. 39 crore and earned PAT of Rs. 9 crore, resulting in net margin of 23.43%. On equity of Rs. 24.02 crore, it earned EPS of Rs. 4.09 for fiscal 2011. With a net worth of Rs. 123 crore, as of 31st March 2011, company had outstanding debt of Rs. 47 crore, as of date.


While its cash and bank balance stood at Rs. 28 crore, as of the latest balance sheet date, one fails to understand the urgency or pressing need for the company to go public currently, given the utterly fragile secondary market conditions. Moreover, in April 2011, company has already raised Rs. 19 crore via preferential allotment to existing PE investors and a Mauritius entity at Rs. 150 per share.

The promoters hold 39.47% of the pre-issued shares, while PE firms Matrix Partners and Foundation Capital hold 35.64% and 11.46% respectively, on the pre-issued capital. Post-IPO, promoter shareholding would decline to as low as 29.60%.


Of the issue proceeds, Rs. 42 crore is proposed to be utilised to establish 120 new company operated pre-schools in top 10 Indian cities by FY14, while Rs 40 crore will be utilized to establish 2 education complexes in Jhunjhunu (Rajasthan) and Vadodara (Gujarat). About Rs. 27 crore is planned to be spend on procuring exclusive right to provide education services (K-12 segment) to 7 schools, Rs. 29 crore worth loans would get re-paid and corporate office would be purchased for another Rs. 14 crore, from the funds raised.


While the company has reported healthy growth over the years, its valuations in the public offering look extremely aggressive. For the Rs. 135-153 price band, shares are being offered at PE multiples of 33x and 37x respectively, which is double the valuation enjoyed by listed companies operating in the education sector.


Take for example, Career Point (having gone public last October) had a topline double of Tree House at Rs. 79 crore for FY11, PAT triple at Rs. 27 crore and a healthier net margin of 35% vis-a-vis Tree House’s 23%. In addition to being a debt free company, Career Point is currently ruling at a PE multiple of 17x, market cap of Rs.530 crore and enterprise value (EV) of Rs. 507 crore. On the other hand, Tree House is expecting a market cap of Rs. 500 crore at Rs. 153 per share, on listing, and an enterprise value of Rs. 515 crore.


Even taking a broader call on the entire listed education space, companies such as Educomp, Everonn, Core Projects, Aptech, NIIT are all ruling between PE multiples of 7x to 15x, thereby indicating no justification for the issue to be priced in earnings multiple in mid-30s for a company with topline of less than Rs. 50 crore. This is clearly very aggressive valuation, by all means and counts.


Given the extremely volatile conditions in the secondary market and the issue’s exorbitant valuations, Tree House is a clear avoid.

Dear James,

If u wish not to sink your hard earned money don't apply.

Dear Sreedhar
I am going to apply for tree house without getting any of ur suggestions....hope i will not loose any money

Hi Ken Shaw
U can put 3 qty & 3 price in 1 appn. If band is say 104 - 112 & lot 100, u can put few lot @ 110 & few @ 107 & few lot @ Cut-Off & u need to pay for the maximum of these 3 bids. If allotment price is final @ say 105, u will be alloted ur qty @ 110 & if bal money is there ur qty @ 107 & if some more bal money is there @ Cut-Off price. Ur DP will get the total shares in single credit. Ur will have stock in diff cost levels. U have to average & sell.
If bid placed on diff appn all will be reject bcoz 1st person PAN will be same. If joint appn u can make names in diff order (1st person must change - compulsory) and put 1 more appn. Like u, ur wife, ur son in 1st appn. Ur wife, ur son, u in 2nd appn. Ur son, ur wife, u in 3rd appn. But the glitch is u must have already opened DP a/c in those name order.
U can have 1st PAN same in many DP with the same DP or diff DP like many SB in same bank or diff bank. But only 1 IPO appn showing the 1st PAN per issue.
Always remember 1st PAN always diff.
Clear ?
Disclaimer: If in doubt talt to ur DP / read the 10 or 12 pages in the appn form / Study the prospectus. Dont shout @ poor & simple me.