Vascon Engineers IPO opens: Should you subscribe?

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Vascon Engineers IPO opens: Should you subscribe?

The initial public offering (IPO) of 10,800,000 equity shares of Vascon Engineers, an engineering, procurement and construction (EPC) services and real estate development company, opened for subscription. Experts looked divided in their opinion while talking to Moneycontrol.com.

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The initial public offering (IPO) of 10,800,000 equity shares of Vascon Engineers, an engineering, procurement and construction (EPC) services and real estate development company, opened for subscription. The price will be decided through a 100% book-building process.

Experts looked divided in their opinion while talking to Moneycontrol.com. Investment Advisor, SP Tulsian said one should aviod the issue while Manish Bhatt of Prabhudas Lilladher recommended subscribing with short to medium term view.

The price band of the issue is between Rs 165 and Rs 185 per equity share. Bids can be made for a minimum of 35 equity shares and in multiples of 35 equity shares thereafter. The issue will close on January 29, 2010.

SP Tulsian

The company can neither be treated as a contracting or EPC company nor realty company. Also, it falls in mid category segment of both the sectors, where PE multiple of such stocks are anywhere between 8 to 10 times. The Company is issuing shares at a PE of over 30 times, based on FY 10 earnings, which is very expensive, even at the lower band of Rs 165.