Thursday, September 30, 2010

CEBBCO IPO - Analysis, Recommendation, Subscription, Allotment, Listing

Analysis:
Commercial Engineers and Body Builders' (CEBBCO), a designer and manufacturer of vehicle bodies, has come out with an IPO of Rs 153 crore. This includes an offer for sale of 15,28,587 shares by New York Life Investment Management India Fund (FVCI) II LLC and Commercial Automobiles Private Limited.

Commercial Engineers is engaged in business of manufacturing vehicle bodies for commercial vehicles, refurbishment of wagons and manufacture of components for wagons, coaches and locomotives for the Indian Railways.

The company has clients like Tata Motors Limited, Ministry of Defence, Reliance Petroleum, Reliance Industries, Ashok Leyland, VE Commercial Vehicles (a JV between Volvo group of Companies and Eicher Motors) amongst others.

The IPO opens on 30th September and will close on 5th October, 2010. The company has fixed a price band at Rs 125-127 a share. The bids can be made for a minimum of 55 equity shares and in multiples of 55 shares thereafter.

The proceeds from the IPO will be used for capital expenditure for the railway project; prepayment of identified loan facilities and general corporate purposes.

ICICI Securities Ltd and Edelweiss Capital Ltd are the book running lead managers to the issue. Karvy Computershare Pvt Ltd is the registrar. Equity share are proposed to be listed on BSE and NSE.

Recommendation:
CRISIL has assigned Grade 2 to the IPO. We would not recommend this IPO to investors at this time. There has been a flurry of IPOs lately and given that Indosolar has not had a good listing, would recommend investors to stay put at this time.

Subscription:
The company has already finalised allocation of 24,43,649 equity shares to anchor investors at Rs 127 per equity share - at higher end of price band of Rs 125-127 amounting to Rs 31.03 crore. At the close of the IPO, the IPO got 2 times subscribed largely due to QII support.
QII segment got subscribed 3.68 times
NII segment got subscribed 0.34 times
Retail segment got subscribed 0.38 times

Allotment:
Click here to check if you have been alloted CEBBCO shares!

Listing:
CEBBCO got listed on 18th October. The stock closed at Rs 109.75 on NSE, down 13.58% from its issue price of Rs 127 a share. It has touched an intraday high of Rs 142.55 and low of Rs 106.35, after opening at Rs 119.


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