Tuesday, December 18, 2007

Apply for Precision Pipes IPO: Prabhudas Lilladher

Prabhudas Lilladher has come out with report on Precision Pipes and Profiles Company. The firm has recommended subscribing to the issue.

PPAP, a Delhi-based OEM supplier to the automobile industry, has opened for subscription with an initial public offering (IPO) of 50-lakh shares of face value of Rs 10 each at a price band of Rs 140-150 per equity share. The bids will close on December 20.

Prabhudas Lilladher report on Precision Pipes and Profiles Company IPO

Precision Pipes and Profiles Company (PPAP) is an OEM supplier of plastic extrusion products to nearly all brands/models produced by Maruti Suzuki, Honda Siel, General Motors and Toyota Kirloskar. With a number of global auto majors setting up their manufacturing base in India, the country is set to witness tremendous boom in the auto component industry. In order to cater to this growing demand from customers, PPAP is expanding its capacity from the current 4.75 million kg to 9.15 million kg at a cost of Rs915m.

Additionally, PPAP has entered into an agreement with Power and Data Corporation (PDC), Australia to manufacture and supply the worldwide patented Novell Mainline system (low voltage electrical outlet system) to authorised distributors of PDC for which it is setting up a new plant at Badarpur, Delhi at an estimated cost of Rs43.5m. The capacity expansion with an outlay of Rs 1,060 million would be part funded by the IPO and the balance by a term loan of Rs 250 million and internal accruals.

The company has sound fundamentals with three year revenue CAGR (upto FY07) of 25%, operating margin at 25%, and ROCE and ROE at 27.2% and 36.9% respectively. Our preliminary estimate of net profit is Rs170m for FY08E and Rs260m for FY09E. At the offer price of Rs140–150, the stock is available at 8.1x FY09E earnings of Rs18.5 at higher band and 7.7x FY09E earnings of Rs18.1 at lower band. Considering its impressive financials and robust growth prospects, we recommend Subscribe to the issue.

The grey market premium for Precision Pipes is around 25-40. Investors can look for good listing gains.

Friday, December 14, 2007

Nahar Ind to make pre-IPO placement in Nahar Retail

Nahar Industrial Enterprises will make Pre-IPO placement of 15-20% in Nahar Retail, reports CNBC-TV18 quoting Sources.

Nahar Industries is likely to raise USD 30 million via this placement and valued Nahar Retail at around USD 150-200 million.

Nahar Retail announcement is likely to be made in January 2008. ICICI Securities is the banker for Nahar Retail's Pre-IPO Placement.

Nahar Industries management said that they are in talks with various investors for fund raising.

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