Wednesday, July 23, 2008

Nu Tek India IPO - Analysis, Recommendation and Review

Nu Tek India, a telecom infrastructure services provider offering infrastructure rollout solutions for both mobile and fixed telecommunication networks, will enter the capital market on July 29, 2008, with an IPO of 4,500,000 equity shares of Rs 10 each for cash at a price to be determined through a 100% book building process. The issue comprises a fresh issue of 3,500,000 equity shares and an offer for sale of 1,000,000 equity shares by a strategic investor.

The price band has been fixed between Rs 170 and Rs 192 per equity share. The issue will close on August 1, 2008. The issue has been assigned an IPO grade of 3 out of 5 by rating agency, CRISIL Ltd.

The company intends to utilise the proceeds from the Issue to meet the cost of capital expenditure, overseas acquisitions and augmenting the long term working capital requirement amongst others.

The equity shares of the company are proposed to be listed on BSE and NSE. The book running lead managers to the Issue are SPA Merchant Bankers Limited and India Infoline Limited.

We recommend only long term investors to invest in this IPO. Investors looking for listing gains should avoid this IPO owing to volatile markets.

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