Friday, August 5, 2011

SRS IPO - Analysis, Recommendation, Review, Subscription, Allotment, Listing

SRS, a diversified company having businesses like cinema exhibition, food and beverages, retail and manufacturing and retailing of jewellery, is entering the capital market with an IPO of 3.5 crore equity shares by diluting 25.13% stake. Promoters' stake will be reduced to 74.04% from the current holding of 98.89% post the issue.

The company operates 23 SRS Value Bazaar retail stores, 15 food courts and 30 cinema screens in North India. It also operates five jewellery retail and wholesale outlets and a jewellery manufacturing unit in Delhi.

The IPO shall open on 23rd August and shall close on 26th August, 2011. The company has fixed the price band of the IPO at Rs 58 to Rs 65 per share.

The company intends to use the proceeds of the IPO for setting up cinemas, food courts and restaurants, retail stores and jewellery manufacturing facility, general corporate purposes and issue related expenses.

SRS has reported a rise of more than 56% in its total income for FY11 to Rs 2,077.71 crore as compared to previous financial year. Net profit in the same period jumped 43.4% to Rs 37.51 crore.

Karvy Investor Services Limited, IDBI Capital Market Services Limited and SPA Merchant Bankers Limited are the book running lead managers to the issue. BEETAL Financial & Computer Services Private Limited is the registrar.

Recommendation:
ICRA has assigned an IPO Grade 3 to SRS Limited IPO indicating average fundamentals. We would not recommend this IPO to investors for now with so much volatility in stock markets.

Subscription:
SRS IPO has got subscribed by 1.25 times largely due to NII support.

At the close of the IPO,
QII segment got subscribed by 0.75 times
NII segment got subscribed by 5.11 times
Retail segment got subscribed by 0.32 times.

Allotment:
Click here to check SRS IPO Allotment status!

Listing:
SRS listed on 16th September, 2011. The stock touched an intra-day low of Rs 31.50 and high of Rs 68, before closing down 44% at Rs 32.50 on NSE. The issue price of the issue was Rs 58 per share.


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