JSW Energy doesn't look attractive at Rs 115: Udayan

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The initial public offering (IPO) of JSW Energy, a part of Sajjan Jindal-led JSW Group, has opened for subscription today. It has fixed the price band between Rs 100 and Rs 115 per equity share, Rs 5 per share discount will be given to retail investors. The issue will close on December 9, 2009. Udayan Mukherjee, Managing Editor, CNBC-TV18, says at Rs 115, it doesn't appear attractive. At Rs 100, he says, it is more attractive than Indiabulls Power , Adani Power and Reliance Power .

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also see the accompanying video.

JSW Energy follows more or less the pattern of the last few initial public offerings (IPOs) unfortunately that there is not much left on the table. The company has got nearly a 1,000 megawatts (MW) of operational power capacity, which is good. There are cash flows and there will be more cash flows not in four years time but over the next 18-24 months. So, their more than 3,000 MW target is not a four year target, it is more like 18-24 months target and if they deliver that, there will be reasonable cash flows.

At Rs 115, whether you look at book value or you look at market cap to megawatt, whichever way you slice it, at Rs 115 JSW has probably left nothing on the table. At Rs 100, I would say it is certainly more attractive than Indiabulls Power or Adani or Reliance Power. I think above all these three peer stocks, JSW Energy probably looks better at Rs 100, which is Rs 95 for retail if it gets done there. I think if retail gets it at Rs 95 and if we have a two year kind of perspective not four years or even an 18 months perspective, I guess you can make money on JSW. At Rs 115, it doesn't appear quite so attractive.