Tower Talk & Ipo Buzz

* The current crisis started when authorities turned a blind eye to the runaway share prices of RPL, RNRL and Ispat Industries not even caring to enquire how it was happening or who was playing.
* Such a fall out at commodity exchanges is not ruled out as the attention of the fast buck makers shifts there.
* The risk management systems of the NSE are under the scanner and the government may clip the wings of this high-flyer exchange.
* You may have heard that ‘F&O is poison’. But are the brokers not prudent enough to manage risks? Everything is rosy when the going is good but when the wheel punctures, it’s just suicidal!
* Reliance Powers grey market premium beaten down. Massive withdrawal of applications speaks of the fear gripping IPO investors.
* IPOs opening this week will fund the going tough and give sleepless nights to promoters and lead managers as the fears of undersubscription are very real.
* The bright side to the recent crash is that one can find many value buys once again. Investors shouldn’t miss this chance and start accumulating scrips of their choice.
* Blue Bird, Ind-Swift Labs, Jupiter Biosciences, Micro Tech, Stone India, Lokesh Machines, Accurate Transformers, International Combustion, Hind Rectifiers, Ansal Housing are some fundamentally sound scrips that have been beaten down by around 50%. Grab them before they shoot back to their normal multiples.
* If the grapevine is to be believed, even the big bull has faced huge losses in this carnage.
* The recent massacre has once again proved that Indian markets haven’t yet matured. It reacted the sharpest compared to other global markets eroding most companies market cap by 30%-50%.
* Bhagyanagar India is allotting warrants at Rs.90 while the market price is Rs.48.There is a good upside possibility in the stock.
* Speciality Papers has announced its intention of a bonus issue but not the ratio. Stock is good to accumulate at current levels.
* Jetking India has spread its wings across the country. With a strong brand name and growth, the scrip is a good buy at current levels. It is an investor friendly company with a good dividend payout.
* Sanra Capital a Citibank offshoot holds over 14% Asian Oilfield Services. The stock has reacted sharply and can be accumulated for the long-term.
* Zenith Birla will soon declare interim dividend, bonus and subdivision of shares. It is also merging Tungabadra Holdings, a steel pipe manufacturing company with over Rs.50 cr. turnover and profit of Rs.2.5 cr. A risk-free buy for the medium-term.
* DIC India, Lanxess ABS, Bodal Chemicals are considered good to accumulate at current levels for the medium-term.
* Clelestial Labs is under consolidation. Circles close to the management have already bought a good chunk of shares in the recent downtrend and it may bounce back to Rs.70.
* The grey market premium on IPOs weakened last week with Reliance Power at Rs.180/190, Future Capital at Rs.360/370, On Mobile at Rs.75/80 and Emaar MGF at Rs.150/160.
*Traders and speculators can buy Apollo Tyres with a target of Rs.70-75 and a stop loss of 39.
*Nicholas Piramal: It can turn out to be a wealth creator given its large basket of brands acquired as well as its global business acquisitions, which will have a telling effect on its performance.
*Orchids Chemicals: The growth rate recorded in its recent quarterly results indicates of things to come in the next few quarters. It is bound to give good returns from the current levels.
*Divi’s Laboratories Ltd.: This young pharma company from Hyderabad is taking full advantage of CRAMS segment and it can give even around 100% return to the investors from the current levels.
*Ind-Swift Ltd.: With its new plants that were designed on a global scale, this company is expected to record impressive growth rates in the next couple of years. It is currently available at a low of around Rs.32 only against Rs34.80 at which price it was traded at the Sensex level of 5839 on 31-12-2003.
*Jupiter Biosciences: It, too, seems to be under priced looking at the potential for its products in the post-patent regime. However, in view of many angry responses from ardent readers (on its
* Weaker hands are out on this sharp reaction and stocks are to go into stronger hands. Stay invested in all good stocks.
* GTL Ltd.’s (Rs.268.05) net profit has flared up by 242.34% to Rs.33.72 cr. in Q3FY08 as against Rs.9.85 cr. during Q3FY07. Sales rose 67.05% to Rs.362.23 cr. in Q3FY08 from against Rs.216.84 cr. during Q3FY07. Profit on sale of business of Rs.142 million is also included in QE 31/12/07. Investors are advised to stay invested in this stock for good targets over the next one year. underperformance on the bourses for the last four years).
* MTNL (Rs.133.05) - On reaction, this stock is available at almost its 52-week low. A strong book value of Rs.184, good dividend of 40% and an attractive P/E multiple of around 12 compared to the industry average P/E ratio of 37, makes it an attractive buy at Rs.125 level.
* Gammon India (Rs.564.50) is attracting the attention of fund managers and large investors. Add it on reaction for good long-term growth.
* Madhucon Projects (Rs.722.90) - New developments are said to be taking place. Stay invested for better targets.
* Gujarat Apollo Industries (Rs.259.75) is another company that is into machinery & equipments for road construction and mining where the outlook is said to be very encouraging. Smart money is said to be accumulating this stock. The stock has reacted from high of Rs.400 to Rs.235 now.
* The recent rights issue of Hind Oil Exploration (Rs.112.60) was at Rs.125 whereas the stock is quoting lower which makes it is an attractive buy.
* Pratibha Industries (Rs.382.65) may see a good upside over the long run. Stay invested.
* Yuken (India) Ltd. (Rs.235) Q3 dispatches are less and it is expected that Q4 shall be much better. If the stock if reacts to Rs.225/240 level, it is a good long-term buy. In this sector, investors should not compare quarter to quarter results.
* IFCI (Rs.62), Oswal Chemicals (Rs.42), Ion Exchange (Rs.234), Khoday India (Rs.212), Shreeram Mills (Rs.275), Sharyans Resources (Rs.304), Nile Ltd. (Rs.220) are the other stocks attractively placed after the sharp reactions. Investors can add or keep holding them.

*Wockhardt Hospitals IPO opens on 31st January
Wockhardt Hospitals Ltd., one of the largest private healthcare services companies is entering the capital market with its IPO of 25,087,097 equity shares of Rs.10 each through a 100% book-building process in the price band of Rs.280 and Rs.310 per equity share. The issue will open on Thursday, 31st January and close on Tuesday, 5th February 2008. This issue will be listed in the BSE and NSE. Part of the Wockhardt group, a Pharmaceutical and Biotechnology company, Wockhardt Hospitals Ltd. has a super-specialty focus on areas such as cardiology and cardiac surgery, orthopedics, neurology, neuro-surgery, urology & nephrology and critical care, it specializes in minimally invasive surgery. It has pan-India presence with a network of ten super-specialty hospitals and five regional specialty intensive care unit (ICU) hospitals providing healthcare services in western, southern and eastern India. These ICU hospitals act as referral centres and the first point of critical care for the larger super-specialty hospitals and are also self-sustaining as they are strategically located to fulfill the demand for basic tertiary care and higher secondary care.
Wockhardt Hospitals is the only private hospital group associate of Harvard Medical International, a self-supporting not-for-profit subsidiary of Harvard Medical School and its super-specialty hospital in Mumbai has received international accreditation from Joint Commission International, the largest accreditor of healthcare organisations in the United States.
The company intends to utilize the proceeds from the issue to meet the cost of development and construction of greenfield and brownfield hospitals of the company, prepay some of the short-term loans and to meet general corporate expenses.

*SVEC Constructions plans IPO
Hyderabad based SVEC Constructions Ltd., which is engaged in civil and related electrical and mechanical construction works with the government, semi-government and private bodies, plans to issue 40,00,000 equity shares of Rs.10 each through the book-building process in the price band of Rs.85 to Rs.95 per share.
The issue will be open for subscription between Monday, 4th February and Friday, 8th February 2008 and is being made to help fund the company’s purchase capital equipment worth Rs.15.32 cr. and to meet its requirement of Rs.23.86 cr. long-term working capital apart from meeting the IPO expenses.

*Emaar MGF Land IPO opens on 1st February
Emaar MGF Land Ltd., a joint venture between a global real estate company, Emaar Properties PJSC of Dubai, and MGF Development Ltd. from India, is entering the capital market with an IPO of 102,570,623 equity shares of face value Rs.10 each for cash at a price to be determined through a 100% book building issue in the price band of Rs.610 and Rs.690 per equity share. The Bid/Issue will open for subscription on Friday, 1st February and will close on Wednesday, 6th February 2008. The Issue has been assigned an IPO grading of 4/5 by CARE, a credit rating agency, which indicates it 'Above Average’ fundamentals.
Emaar MGF commenced in India in February 2005. Its primary business is the development of properties in the residential, commercial, retail and hospitality sectors. In addition, it has also identified healthcare, education and infrastructure as business lines for future growth. Its operations span across various aspects of real estate development, such as land identification and acquisition, project planning, designing, marketing and execution.
As of 31st December 2007, the company had land reserves across India admeasuring to approximately 13,024 acres out of which it has development plans for approximately 12,028 acres, which in turn, is expected to provide it with a proposed saleable area of approximately 566 million sq. ft. The company estimates that its land reserves will provide it with a proposed saleable area of approximately 136.5 million sq. ft. of plotted residential development (including built up villas); 318.8 million sq. ft. of built up residential properties; 88.9 million sq. ft. of commercial properties; 18.0 million sq. ft. of retail properties; and 4,960 keys in hospitality properties as of 31st December 2007.
The issue proceeds will be used for part payment towards the acquisition of land and land development rights and related approvals for its ongoing and planned projects. The Issue proceeds will also be used for the development and construction costs for project Palm Drive in Gurgaon. Palm Drive is a high quality residential development designed for contemporary living in a green sanctuary setting and is expected to include amenities such as a clubhouse, health club and parks. The development is within 20 kilometres of Delhi’s international airport.
For H1FY08, its consolidated total income was Rs.501.74 cr. with consolidated net profit was Rs.129.83 cr.

*IRB Infrastructure Developers IPO opens on 31st January
IRB Infrastructure Developers Ltd. (IRB), an infrastructure and construction company with extensive experience in the roads and highways sector and currently involved in 12 BOT projects in this sector, proposes to enter the capital markets with an IPO of 5,10,57,666 equity shares of Rs.10 each through 100% book building process in the price band of Rs.185 to Rs.220 per equity share. The issue will open on Thursday, 31st January and close on Tuesday, 5th January 2008 and will be listed on the BSE and NSE. The IPO has been graded 4/5 by Fitch Ratings, a credit rating agency, indicating that the fundamentals of the issue are above average.
IRB is currently involved in 12 BOT projects in the roads and highways sector. Out of these projects, 11 projects are in the operational phase, i.e., engineering, procurement and construction phases have been completed on these projects and the project SPVs are currently earning revenues from toll collection under the relevant concession agreements.
IRB has recently diversified into the real estate development sector and it is in the process of acquiring land in the Pune district in Maharashtra on which it proposes to develop an integrated township. The proposed township project is in its preliminary stages of planning and development and will be its first real estate development project. Currently, the company’s land reserves consist of approximately 925 acres of land in the Mauje Taje and Mauje Pimploli Taluka in Pune district, and it intends to acquire an additional approximately 475 acres of land for its proposed township project.
The company proposes to utilize the net proceeds of the Issue for investment in subsidiary IDAA; prepayment and repayment of existing loans of the company and the subsidiaries Aryan Toll Road Pvt. Ltd, Modern Road Makers Pvt. Ltd, Thane Ghodbunder Toll Road Pvt. Ltd, NKT Road & Toll Pvt. Ltd and Mhaiskar Infrastructure Pvt. Ltd.
For FY07, its consolidated total income was Rs.325.08 cr. with consolidated net profit of Rs.29.96 cr. In the 5 months ended 31st August 2007, consolidated total income was Rs.285.26 cr. with net profit of Rs.36.38 cr.

*Bang Overseas IPO opens on 28th January
Bang Overseas Ltd. (BOL), a provider of fashion fabrics and ready-to-wear requirements in apparel, textile and retail segment, is entering the capital market with an IPO of 3,500,000 equity shares of Rs.10 each at a price to be decided through a 100% book-building process in the price band of Rs.200 and Rs.207 per equity share. The Bid/Issue will open for subscription on Monday, 28th January and close on Thursday, 31st January 2008. The issue has been graded 2/5 by CARE indicating below average fundamentals.
Incorporated in 1992, BOL has two apparel manufacturing units in Bangalore. Its ready-to-wear men’s garments are sold under the brand name ‘Thomas Scott’ since 2002. It has an installed capacity of 720,000 and 540,000 pieces per annum at its two units namely Reunion Clothing Company and Formal Clothing Company respectively. Its products are presently retailed through 157 points of sale comprising its own retail outlets large format stores and multi-brand outlets.
The proceeds from the proposed issue are to be deployed for setting up retail outlets across India; brand building; a new apparel manufacturing unit of 6 lakh pieces per month; warehousing and logistics facilities; general and corporate purposes and to meet issue expenses.
For FY07, it reported an income of Rs.996 cr. with PAT of Rs.107 cr. and for H1FY08 its income was Rs.651 cr. with PAT of Rs.70 cr.

*Manjushree Extrusion FPO opens on 31st January
Manjushree Extrusion's Ltd. (MEL) is entering the capital market with a Rights-cum-Follow on Public Offer of equity shares at Rs.30 per share aggregating to Rs.35.70 cr. The Rights Issue has already opened on 7th January 2008, while the Follow on Public Offer will open on Thursday, 31st January and both the issues will simultaneously close on Wednesday, 6th February 2008.
The 1:1 Rights Issue comprises of 42,10,800 equity shares of Rs.10 each for cash at a premium of Rs.20 per share aggregating to Rs.12.63 cr. offered to the existing equity shareholders the Follow on Public Offer will comprise of 51,26,100 equity shares of Rs10 each for cash at a premium of Rs.35 per share aggregating to Rs.23.07 cr. The IPO has been graded 2/5 indicating its below average fundamentals.
The fund being raised through the composite issue has proposed to utilize to part finance the company's expansion cum diversification project at a cost of Rs.53.70 cr., which is presently under implementation. A term loan of Rs.18 cr. has been sanctioned by SBI for the project.
MEL provides packaging solutions through manufacture of Speciality Plastic Packaging products for MNCs in FMCG, Pharma, Food Processing and Agrochemical sectors with whom it enjoys ‘preferred supplier’ status. The products include injection/Blow moulded PET/PP and multilayer plastic containers that are being manufactured by employing Japanese and European technologies. The major clients of the company include Hindustan Unilever, Nestle, Cadbury, Britannia, Glaxo SmithKline, P&G, Coca Cola, Tata Tea, Godrej, Wrigley’s, Hershey’s, Heinz, Pepsi, UB Group, Henkel etc. besides exports to customers in South Africa and Middle East countries.
Manjushree registered 22% higher turnover of Rs.80 cr. for FY07 with PAT of Rs.2.82 cr. and an EPS of Rs.6.70. For H1FY08, it registered a turnover of Rs.38 cr. with PAT of Rs.1.86 cr. The EPS after exceptional items for H1FY08 stood at Rs.4.42.
Manjushree is currently listed on Ahmedabad, Calcutta and Guhati stock exchanges and now proposes to list the existing shares as well as the new shares under the issue on the BSE and NSE.

*MCX to support computer literacy in rural Maharashtra
Multi Commodity Exchange of India Ltd. (MCX) has announced its support to an ongoing computer literacy programme of Microsoft and Indian Society of Agribusiness Professionals (ISAP) in rural Maharashtra.
This marks the launch of MCX’s Corporate Social Responsibility (CSR) initiative aimed at empowering the youth and women of rural areas of the state with technology skills. Till now, over 15,500 people have been trained and over 24,000 people are using this service across 16 districts by understanding the futures markets prices of the area specific commodities.