Should you subscribe to these two IPOs?

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Should you subscribe to these two IPOs?

Deven Choksey of KR Choksey Securities gives his perspective on Lanco Infratech and Parsvnath Developers.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS DLF revives plan for IPO Info Edge IPO oversubscribed nearly 6 times ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Unitech BSE | NSE 25/05/12 Are Mutual Funds betting on Unitech?

Deven Choksey of KR Choksey Securities gives his perspective on Lanco Infratech and Parsvnath Developers.

According to him, Parsvnath Developers offers a good amount of opportunity. Moreover, he feels that there is a good amount of appetite for such issues because in the realty space, the institutional buyers and the overseas buyers are equally interested. Hence, he feels that it should find good response from investors.

As regards to Lanco Infratech, Choksey feels that given the kind of issue and the kind of a complexity, it is largely for those investors who are institutional investors and who have an appetite to stay in the infrastructure space for a longer period of time.

Excertps from CNBC-TV18's exclusive interview with Deven Choksey:

Q: How do you think the price band for Parsvnath Developers is valued?

A: I think if one is looking at comparative valuation with Unitech, what we find is that sales to market cap ratio of Unitech is probably 30 times and this company is being marketed at less than 5 times. So if one looks at it from this angle, then this particular company should be revalued.

Secondly, the land bank of about 102 million square feet is equally impressive because as it unfolds into projects and realizing into revenue and profits, in the coming years, it will significantly contribute to topline and bottomline of the company.

So, to a great extent, the issue offers a good amount of opportunity. Moreover, there is a good amount of appetite for such issues because in the realty space, the institutional buyers and the overseas buyers are also equally interested. This company is a relatively known company as far as the operations are concerned. Probably that would find good amount of interest in the market. So all put together, it should find good response from investors

Q: Have you done any preliminary work on where exactly their land banks are and what kind of reasonable market value would you ascribe to that?

A: We haven't gone into the nitty-gritty part of the land bank valuation. But it is spread across various states unlike other issues like Lanco where they are predominantly focussed in Hyderabad. So to a great extent, that should be better.

They also have commercial and residential properties coming up. So that should give them a better valuation. As far as the balancing is concerned, it looks quite promising.

Q: It has a non-metro focus as well. So on a strict comparison, which listed entity would you compare it against?

A: There could be some amount of comparision with Unitech and at some point of time, in future, with DLF.

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