Mah Holidays may see sub Rs 250/sh post listing: Udayan
Published on Fri, Jun 26, 2009 at 09:31 | Source : CNBC-TV18
Updated at Fri, Jun 26, 2009 at 11:43
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Mah Holidays may see sub Rs 250/sh post listing: Udayan
Mahindra Holidays IPO subscribed just 0.89 times till June 25, which should have done 4-5 times after looking at its track record. Managing Editor of CNBC-TV18, Udayan Mukherjee said watermark for the issue price was Rs 250 a share. That is where they should have done the issue. They did 20% extra on that and that was probably not fair pricing.
It is a good story and it's got a very high return on equity which is something which institutional investors will love, a 40% plus return on equity stock. Having said that this market has doubled but the memory of 2008 has not faded, this is not the market to do IPOs at 25 plus PE. You want to leave something on the table like the QIP guys have to do now. You can say I cannot do it at the doubled price, I have to leave something just in case the market corrects and that is the fear which is keeping a lot of people away. That you buy the stock at Rs 300 and then if the market corrects a little bit you will find that stock at Rs 240 in the market. So why do you want to buy the IPO. I think it is a reasonable assessment too, so nothing against the story. It's a very good story, it will eventually do well but I do feel that unless the market runs away to 4,600 plus in the near-term there is every chance with a correction that you will get Mahindra Holidays at sub Rs 250 a share. I think the watermark was Rs 250 a share; that is where they should have done the issue. They did 20% extra on that and that was probably not fair pricing. I would wait, even after the issue lists, there is a little bit of a pop, I suspect you will get it at sub Rs 250 at some point.
