Credit Suisse buys 28 lakh shares of Gujarat Pipavav

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Credit Suisse buys 28 lakh shares of Gujarat Pipavav

Shares of Gujarat Pipavav Port (GPPL) have seen overwhelming response on day one.

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Gujarat Pipavav BSE | NSE 23/05/12 Are Mutual Funds betting on Gujarat Pipavav?

Shares of Gujarat Pipavav Port (GPPL) have seen overwhelming response on day one. A share closed at Rs 53.85, a premium of 17.07% over its issue price of Rs 46 on NSE on Thursday.

Anchor investor - Credit Suisse Singapore has sold 11,74,495 shares at Rs 56.43 per share while bought 28,00,000 shares at Rs 53.68 on listing day.

Credit Suisse Singapore Limited had bought 17,77,750 shares - 8.68% portion of anchor investors - at Rs 45 per share on August 20.

SBI Life Insurance Co ltd sold 21,90,923 shares at Rs 55.47 and State Bank Of India sold 23 lakh shares at Rs 53.58 per share on listing day.

The stock touched an intraday high of Rs 58 and low of Rs 52, after opening at Rs 56.10. The scrip traded with volumes of 10.95 crore shares.

After looking at yesterday's run up, it seems like share has discounted its FY11 earnings. Param Desai of Angel Broking said, "Fair value for this from one year perspective is around Rs 55. Even though we remain bullish on the growth potential of the company, we do believe that the current price is discounting most of the fundamentals and there does exist certain amount of execution and competition risk." He advised booking at least a portion of the subscription at this level.

GPPL is the developer and operator of APM Terminals Pipavav, which has multi-cargo and multi-user operations. It has the exclusive rights to develop and operate APM Terminals Pipavav and related facilities until September 2028 pursuant to the Concession Agreement with GMB and the GoG.

Managing Director Prakash Tulsiani said the company should be in the black in 2011, "GPPL has seen a 34% growth in bulk business and margins have gone up due to ramped up volumes. For the period of January-June 2010, revenues went up 34% and earnings before interest, tax, depreciation and amortization, (EBITDA) increased to Rs 34 crore from Rs 3 crore. EBITDA margins improved to 44% for the same period."

Prakash Tulsiani said the company received Rs 500 crore from the initial public offer (IPO), which closed on August 26 on the back of strong investor response. "Of this Rs 300 crore will be used to retire debt as we will save Rs 39-40 crore interest cost after debt repayment."