Thursday, February 14, 2008

V-Guard IPO - Analysis

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V-Guard Industries, a manufacturer of electrical and electronic products, is offering 80 lakh equity shares of which four lakh equity shares have been reserved for employees. The price band for the issue has been fixed between Rs 80 and Rs 85.

The proceeds from the issue will be used to set up cable manufacturing facilities in Coimbatore and Uttaranchal, an enamelling plant at Coimbatore, a development and pilot production plant for water heaters, fans and pumps at Himachal Pradesh and Coimbatore, and service and distribution centres in Bangalore, Hubli and Vijaywada.

Lot of IPOs have been either deferred or cancelled however, V-Guard Industries have stuck to its decision of launching the IPO on 18th February, 2008. The issue closes on 21st February, 2008.

We would recommend investors not to invest in this IPO for now. Reliance Power did not get a decent listing. Risk to return ratio is not favorable for this. We would recommend either to wait till the last day of this IPO to see response in FII and HNI segments or to better invest in REC IPO which is going to be launched on 19th February, 2008.
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