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Review By Dilip Davda on December 1, 2012
Credit Analysis & Research Ltd. (CARE) was promoted in 1993 by consortium of PSU and Private sector banks and financial institutions. Since inception till 30.09.2012 it has completed 19069 rating assignments valued at Rs. 4405 crores. The largest stakeholders are IDBI Bank Ltd, Canara Bank and State Bank of India. Having it's headquarter at Mumbai; it operates from major business metros and also has office at Maldives.
Capital Market, both primary and secondary segments, plays a vital role in economic development because of its linkages with the banking systems and investment communities globally. The vibrancy of capital market comes from its volume and varieties of trades of financial instruments, its liquidity and ability to raise capital by attracting fresh investments, which are derivatives of sound investor confidence and transparency. CARE is committed to play a key role by providing professional, insightful and independent informed opinion through various grading and rating services, which can serve as a valuable input to build investor confidence. Its credit rating across the spectrum of financial world helps the investors to effectively monitor and manage investments based on their respective risk-return policies. On the other hand, it imparts the issuers with financial flexibility for wider access to funds at a market-determined cost related to their credit risk. It can also provide a helping hand for establishing business relationships (including collaborations) and awarding contracts to the counter parties.
CARE's grading products viz IPO Grading and Equi-Grade have proved to be valuable means for primary and secondary market development respectively. IPO Grading, through its opinion on fundamentals, works as one of the important inputs to form long-term equity investment decision for public offerings. On the other hand, the investor community can have an unbiased and analytical opinion on the fundamentals and valuations of any listed entity through Equi-Grade product.
For the regulators, CARE's rating services facilitate in determining the eligibility criteria and entry barriers for different types of securities, to monitor financial soundness of borrowers and to promote overall efficiency in the debt market. Its Equi-Grade product can also be useful to the stock exchanges for investor education and improve liquidity in the secondary market. Thus, services of CARE increase the transparency, leading to a healthy development of the capital market.
To meet the listing requirements, its existing stakeholders are offering for sale 7199700 equity shares of Rs. 10 each within a price band of Rs. 700-750. Entire corpus will go to the existing stakeholders only as equity post this issue remains at Rs. 28.55 crore. It has issued bonus shares in the ratio of 18 for 100 in March 2010 and in the ratio of 2 for 1 in September 2011. Issue opens for subscription on 07.12.12 and will close on 11.12.12. Minimum application is to be made for 20 shares and in multiples thereof, thereafter. SEBI has exempted the company from obtaining IPO grading. The shares will be listed on BSE and NSE.
Kotak Mahindra Capital, DSP Merrill Lynch, Edelweiss Financial, ICICI Securities, IDBI Capital Market and SBI Capital Market are the BRLMs and Karvy Computershare is the registrar to the issue.
As per available date on a IPO web (chittorgarh.com) for BRLMs mandate of past IPOs respectively, the first number represents the issues managed and the figure in bracket indicates the issues failed to gave listing gains. Kotak Mahindra - 46 (13), DSP Merrill - 12 (4), Edelweiss - 19 (5), ICICI Securities -25 (11), IDBI Capital -16 (8) and SBI Cap- 22 (8).
On CARE's performance front, the company has posted average EPS of Rs. 35.54 for last three fiscals and Rs. 17.53 for first half of current fiscal. Its NAV as on 30.09.12 is Rs. 149.41. Thus the asking price is at a P/E of 20 plus and at a P/BV of around 4.7 that compares well with listed peers. Listed peers are performing well and has rewarded investors post IPOs. Issue is worth considering for investment.
Review By Dilip Davda on December 1, 2012
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Credit Analysis & Research Ltd offers an early investment opportunity in Credit Analysis & Research Ltd. A stock market investor can buy CARE IPO shares by applying in IPO before Credit Analysis & Research Ltd shares get listed at the stock exchanges. An investor could invest in CARE IPO for short term listing gain or a long term.
Read the CARE IPO recommendations by the leading analyst and leading stock brokers.
CARE IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the CARE IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for CARE IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the CARE IPO.
The CARE IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit CARE IPO allotment status to check.
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