See good response to Persistent Systems IPO: Udayan
Published on Wed, Mar 17, 2010 at 10:04 | Source : CNBC-TV18
Updated at Wed, Mar 17, 2010 at 10:43
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See good response to Persistent Systems IPO: Udayan
The initial public offering (IPO) of Persistent Systems has opened for subscription today. Udayan Mukherjee, Managing Editor, CNBC-TV18, says Persistent Systems will be oversubscribed quite significantly because it is in a niche space.
I think Persistent Systems will also be oversubscribed quite significantly because it is in a niche space, it is not a regular Rolta, Polaris kind of player and it is in the outsource product development space, has very strong relationships and inherently because of that space, the margins are around 25% which is a very good margin profile. So if they do between Rs 25 and Rs 30 earnings per share next year or the current year, which seems entirely likely then you are talking about a stock which is coming in between 11 and 13 P/E with pedigree, with very good relationships and is in the product kind of niche in the software space.
So I think every reason for it to do well, get fairly significantly oversubscribed by the qualified institutional placements (QIPs) and go on to list at a significant premium too on its issue price of roughly Rs 300. I think this one is a good one.
