IPO Buzz: Udayan on Syncom, Vascon, Thangamayil Jewellery

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IPO Buzz: Udayan on Syncom, Vascon, Thangamayil Jewellery

Udayan Mukherjee, Managing editor of CNBC-TV18 says, the initial public offering (IPO) which was supposed to close yesterday has not. Deferment will happen but its not know whether it will be enough to save some of these IPOs.

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Udayan Mukherjee, Managing Editor of CNBC-TV18 says, the initial public offering (IPO) which was supposed to close yesterday has not. Deferment will happen but its not know whether it will be enough to save some of these IPOs.

Below is a verbatim transcript of his comments on CNBC-TV18. Also watch the accompanying video.

They may recklessly kind of conjure up some kind of subscription. The stock will probably open significantly lower than their issue price as we have seen with some of the smaller IPOs.

Most of them were not great quality payer. I am not talking about DB Realty , which I haven't looked at but Aqua Logistics with Rs 220-230, they got nothing. Now they have reduced it to Rs 200-220. I do not know what these companies are doing. What will Rs 10-15 will do to the issue price? It reminds me of Wockhardt Hospitals. They did the same routine. Aqua Logistics, if it has to have any hope of going through or listing with not a huge blush needs to peg it back to Rs 150-160.

What are they doing at Rs 200-220? The other issues are too small. They can't claim to know these companies well. Thangamayil Jewellery , a Tamil Nadu based Jewellery Company is trying to get into retail. It's not expensive from what earnings per share (EPS) data we have but what do you know about these companies and what their success rates will be. So I am not surprised in this market environment. People do not want to take a punt on this kind of a smallcap name.

Healthcare company-- Syncom , seems like an okay pace. Like many other companies they make formulations and do a bit of contract manufacturing on the side. However, they want more than Cipla's valuations. They want to do an issue at 22-23 times. Which pharmaceutical company in the midcap space sells at 23 PE? I am sure that will not fly as well and if it does it will bomb on listing.

Vascon Engineers at least has some pedigree. It's an engineering company and the biggest comfort for me is that HDFC owns nearly 15% of that company. HDFC is blueblood. When it owns 15%, it gives a bit of comfort but their engineering is largely related to real estate. So I think there is vastly higher risk category in the infrastructure space. Vascon from this list probably has the highest chance of going through because of the slightly higher pedigree. The others will struggle.