Syncom Healthcare looks expensive: Udayan

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Syncom Healthcare looks expensive: Udayan

Yesterday, Syncom Healthcare listed at Rs 89.90 on the NSE, at a premium of 19.86% to its issue price of Rs 75. Udayan Mukherjee, Managing Editor, CNBC-TV18, says the stock opened well, but all three QIBs (Qualified Institutional Buyers) sold on day one, which is very suspicious.

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Yesterday, Syncom Healthcare listed at Rs 89.90 on the NSE, at a premium of 19.86% to its issue price of Rs 75. The stock closed its first trading session at Rs 85.80, at a premium of 14.4% over its issue price. 

Udayan Mukherjee, Managing Editor, CNBC-TV18, says the stock opened well, but all three QIBs (Qualified Institutional Buyers) sold on day one, which is very suspicious.

"If you look at the fundamentals, from what the management told us, Rs 5 crore profits for this year, which is about Rs 2.8 per share. On that how can you justify a stock price of Rs 88? You are talking about 30-31 times PE multiple for a fledgling pharmaceutical company where you can buy the biggies for 20 times, so valuations makes no sense."

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also see the accompanying video.

The stock opened well, but all three QIBs (Qualified Institutional Buyers) sold on day one. Very suspicious, the whole way it's happened; half of the allotment going to three QIBs, all of whom sold out on day one, just 7% marked for delivery out of huge volumes and this has happened several times before. These stocks have habit of running for sometime and then blowing up completely. I don't know whether Syncom will be that way, but it's suspicious, on day one 10 times the IPO float got traded, and that volume also raises eyebrows.

If you look at the fundamentals, from what the management told us, Rs 5 crore profits for this year, which is about Rs 2.8 per share. On that how can you justify a stock price of Rs 88? You are talking about 30-31 times PE multiple for a fledgling pharmaceutical company where you can buy the biggies for 20 times, so valuations makes no sense. So this is about complete trading thing, if you are lucky and a sharp trader you can still scalp it for a bit more. But when the stock settles I don't think it will settle anywhere close to Rs 90 or 100, much-much lower.