Wednesday, August 25, 2010

Prakash Steelage IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Prakash Steelage (PSL), engaged in the manufacturing of seamless & welded stainless steel pipes, tubes and U-tubes, has come out with a public issue of 62.5 lakh equity shares of Rs 10 each for cash aggregating to Rs 62.50 crore (lower end of the price band) and Rs 68.75 crore (upper end of the price band).

The company carries out its production through its two state-of-the-art production units situated at Silvasa and Umbergaon (Gujarat). The company increased its manufacturing capacity to 12,200 MTPA in the year 2007 by setting up a new state-of-the-art plant at Umbergaon. Going ahead, it added another 3,400 MTPA taking the total to 15,600 MTPA out of the proposed expansion plan. The company has been exporting its products to several MNCs in more than 40 countries across the globe.
The issue will open on August 5, 2010, for all bidders and close on August 9, 2010, for QIB bidders and on August 10, 2010, for non-QIB bidders. It has fixed the price band between Rs 100 and Rs 110 per equity share.

The company clocked a turnover of Rs 437.10 crore for the year ended March 31, 2010, with EBIDTA of Rs 45.14 crore and profit after tax of Rs 17.82 crore.

The objective of the issue are, amongst others, to raise resources to part finance its expansion plan at the Company’s existing manufacturing facility at Umbergaon, Gujarat and also to meet the additional working capital requirement.

The equity shares are proposed to be listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE).

The book running lead manager to the Issue is Keynote Corporate Services Limited. The Syndicate members to the IPO are Keynote Capitals Limited, ENAM Securities Pvt. Ltd. and SMC Global Securities Limited.

Recommendation:
Subscribe to Prakash Steelage IPO for listing gains.

Subscription:
Prakash Steelage IPO got good response from investors. The IPO was subscribed 4.5 times. At the close of the IPO,
QII segment was subscribed by 1.27 times
NII segment was subscribed by 10.91 times
Retail segment was subscribed by 6.62 times
Employee reservation segment was subscribed by 1.02 times

Allotment:
The company has fixed 110 as the issue price. Click here to check if you have been alloted Prakash Steelage shares!

Listing:
Prakash Steelage had a strong listing today. The share closed at Rs 187.95, a premium of 70.86% over its issue price of Rs 110 per share on BSE. It touched an intraday high of Rs 201.90 and low of Rs 117. Total volume traded was more than 10 times of its issue size; about 10.85 crore shares of PSL traded on exchanges while issue size of 62.5 lakh shares. On the NSE, the share ended at Rs 184.90, up 68.09%, after hitting a high of Rs 200 and low of Rs 117.


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