Avoid Anu’s Laboratories IPO: Hem

Hem Securities has come out with a report on Anu's Laboratories' IPO. It has recommended investors to ignore the issue.

The issue has opened for subscription with its initial public offering (IPO) of 38,20,000 equity shares of face value Rs 10 each. The issue will close on May 15, 2008. The price band has been fixed at Rs 200 to Rs 210 per equity share.

Hem's report on Anu’s Laboratories'  IPO:

Company’s domestic clientele includes Dr. Reddy’s Laboratories Limited, Nicholas Piramal Limited, Sun Pharmaceuticals Limited, Divi’s Laboratories Limited. The major international clients include M/s Teva, Mitsui & Co., Sanofi Aventis, Tradecom Services PTE Limited and Tanabe. Company is managed by a team of experienced and professional personnel with exposure in different aspects of pharmaceutical industry including production, quality control, research & development, marketing and finance. Mr. K. Hari Babu, Managing Director is a Chartered Accountant and has 27 years of experience in various fields of management. Mr. N.S. Walimbe is a Chemical Engineer from Indian Institute of Technology, Mumbai and has around 30 years of experience in chemical / pharmaceutical industry. Mr. M. Ajaya Kumar also has over 23 years of experience in pharmaceutical industry out of his total experience of 39 years. Company has been granted ISO 9001:2000 Certificate of Assessment by AQA International LLC with a scope of design development, manufacture and supply of organic and inorganic intermediates which is revalidated till December 30, 2008.

Valuation:

The company at a price band of Rs 200-210 per share will have the p/e multiple of 13.80-14.49 at post issue eps of 14.49 (Basis PAT Annualized for 9 months ending Dec’07). Though the company has posted strong financials from last few years and is continuously showing growth but looking at its peers, the valuation of the company looks stretched. Hence we recommend the investor to ignore the issue.
 
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