Astec Lifesciences fair value at Rs 65-66: Udayan

1196 Investors following Astec Life. Share this News with them.

0

Like this story, share it with millions of investors on M3

Astec Lifesciences fair value at Rs 65-66: Udayan

Astec Lifesciences is not a terrible expensive stock. It is into agrochemical and has small leg into pharmaceutical business. Its issue got barely subscribed and did not see any enthusiasm from qualified institutional investors' portion. Its fair value is at Rs 65-66.

Post your opinion here

 

0

Tweet

Share on Tumblr

Nifty BSE | NSE 01/06/12 Are Mutual Funds betting on Nifty?

Astec Lifesciences will list on the bourses today. Managing Editor of CNBC-TV18 Udayan Mukherjee said it was not a terrible expensive stock. "It is into agrochemical and has small leg into pharmaceutical business. Its issue got barely subscribed and did not see any enthusiasm from qualified institutional investors' portion. Its fair value is at Rs 65-66."

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

Astec is a small company mainly in the fungicides space. It is a small leg in the pharmaceutical business and intermediates. There is no established strength in either researched or in the formulation space. Therefore, I don't know whether the street will be terribly excited.

It did not seem exciting on the initial public offering (IPO) because it just barely got done and it evinced very little by way of qualified institutional placement (QIP) interest. The company should be around Rs 8.5 earnings per share for the current year, which means the stock did its IPO at around 20 PE multiple.

There are a lot of good quality pharmaceutical companies in the midcap space at 10-11 PE. So with respect toe Astec Lifesciences, the fair value of the company would be closer to Rs 65-66. I would not be surprised if it gets off to a lackluster listing.

The smaller companies can sometimes surprise by going to places that you cannot imagine. If this is one of those Rs 80 ticket item, then one doesn't know which high net worth individual's (HNIs) will flock on to and operators will ramp up. However, short of that fundamentally, there is no reason for the stock to out perform post listing. I would not be surprised if it loses 15-20% over a period of time.