Pipavav IPO overbid 2.67 times: Should you invest?

Avinash Gorakshakar, Head of Research at Reliance Money advised investors to subscribe to the IPO for long term and not for any short term gains. "This is not a pure shipyard it is an engineering solutions company wherein it will cater to other growing sectors like engineering, capital goods which will offer good business in future. Also this is the largest facility being put up by a private player. All such initiatives are likely to yield positive results in the long term. The only caveat is the execution capability of the management which will be watched by the market. "

"Already the company has got 6 anchor investors at Rs 60 and has earlier made a pre-IPO at Rs 80 a share and no one has sold. In fact this gives the older investor to average out. All these are positive signals for the issue. However investors should remember that the full benefits of this IPO will get reflected in only 12-18 months down the line when there the company starts reporting financial numbers."

In case of HNIs - "High Networth individuals may not look at this issue in a big way as their upside outlook is very short. Hence the main drivers for this issue will be the qualified institutional buyers."

Continued on the next page....