IL&FS Trans to be institutional fav infra stock: Udayan

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IL&FS Trans to be institutional fav infra stock: Udayan

CNBC-TV18’s Managing Editor Udayan Mukherjee says that IL&FS Transportation is a good company. He adds that the stock has seen quite a bit of interest from the institutional players. :It will become one of the institutional favourite infrastructure stocks."

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS IL&FS Trans IPO overbid; should you invest? ALSO READ See what other CNBC-TV18 anchors have to say ILandFS Trans BSE | NSE 30/05/12 Are Mutual Funds betting on ILandFS Trans? Other Stocks in this news Pradip Overseas |

CNBC-TV18's Managing Editor Udayan Mukherjee says that IL&FS Transportation is a good company. He adds that the stock has seen quite a bit of interest from the institutional players. :It will become one of the institutional favourite infrastructure stocks."

Below is a verbatim transcript of his comments on CNBC-TV18. Also watch the accompanying video.

IL&FS Transportation is a good company. The market loves companies with toll revenues. Two thirds of IL&FS Transportation's revenues are from toll side. They will see expensive on a price earnings multiple. You just have to go back and see the IRB experience. When the IRB IPO came in, a lot of people thought that it was very expensively priced. Not only has it held its own, it has actually delivered returns over the last couple of years since listing. Rs 185 issue has come now to Rs 253.

People will remember that episode and try and keep owning these toll kind of players for medium-long term investment horizons because they do work out pretty well. So IL&FS Transportation already has seen quite a bit of interest from the institutional players. It will become one of those institutional favourite infrastructure stocks, but I would submit that even retail would not do too badly unless they want to play for a big listing, which may or may not be there. Over the medium term, this kind of plays will make you some money. So it is a good story. It is some what stretched on traditional valuation parameters. They have left a bit on the table compared to IRB.

Pradip Overseas is not a unique player or anything. It is a regular textile play, not very small, but at least they have out priced themselves. It comes in a fairly reasonable PE multiple, which is why you are seen some subscription. Hence, I do not see any great problems here.