The listing of Garden Reach Shipbuilders is also expected to be tepid, not only due to current bearish market scenario but also because of weak operational performance, experts said
Due to current market conditions, experts advise selling Aavas Financiers on listing, even if it lists below Rs 800 per share, as it looks overvalued at the current juncture
Brokerage houses advised either subscribing with caution or said high risk appetite investor may opt this public issue due to current equity market conditions and dependency of the company on limited number of large customers for revenue.
IRCON International has order book of Rs 22,407 crore as of March 2018, which is 5.6 times of FY18 revenue which also gives good revenue visibility for the company.
Majority of brokerage houses advised subscribing to Aavas Financiers issue with long-term perspective, but not for listing gains as the issue is fairly priced and FY19 earnings multiple do not leave much upside in the near term.
Garden Reach is a shipbuilding company in India under the administrative control of the MoD and primarily adhere to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard
At the higher price band of Rs 475 per share, IRCON's share is valued at a P/E multiple of 10.9x (to its restated FY18 EPS of Rs 43.8), which shows the issue is attractively priced at current levels, brokerages said.
Astha Jain advises investors to hold shares for around a year or so as she expects the stock to gain 10-15% over its issue price
Majority of brokerage houses do not expect huge listing gains from the microfinance lender as they feel it is highly valued at current price band.
Overwhelming response to the issue indicated the listing could be at a hefty premium and experts also agreed with the same.
Some are saying it is a high conviction buy, some are saying it is a must in any portfolio while some are rating it as five out of five.
HDFC Asset Management Company is seeking a valuation that is more than twice what its close rival Reliance Mutual Fund sought in its offering last year
At 46.6 times trailing twelve month earnings, the stock seems fully priced, notwithstanding the fact that it is still valued at a discount to the industry average.
Given the decent financials, mature valuations and growth prospects, majority of brokerage houses are of the view that investors can subscribe the issue with a long term perspective, but not for listing gains.
SMC says only high-risk investors should opt for the issue as it looks expensive and given the company's high dependence on its global business. Choice Broking also advises subscribing with caution due to its expensive valuation.
Multiple brokerages recommend subscribing to the issue with a long term perspective as valuations could be higher from some perspective. But the business has a strong potential to grow ahead, they said.
Industry tailwinds, increased awareness towards insurance products, leadership status amongst private non-life insurers in India, a robust distribution channel, and healthy financials make ICICI Lombard's IPO a proposition worth considering.
IIFL Private Wealth feels unlike developed countries, there's a huge demand for matchmaking within communities/castes in India.
Prima facie, the IPO satisfies Warren Buffet’s cardinal principal of investing - a business that is easy to understand, has favourable long-term prospects and operated by honest and competent people.
The very first reason for avoiding the issue is its weak financials and the second prominent reason is its valuations, which are high compared to listed peers, analysts said.
Investors have to be extremely careful when everything around looks so good. Bharat Road Network, which is into road BOT (build operate transfer) assets, is one of those IPOs that needs an extra scrutiny before investing.
The issue size of close to Rs 599.3 crore (at the upper end of the price band of Rs 1760 – 1766 per share) is a combination of fresh issue worth Rs 60 crore (0.03 crore shares) and offer for sale of 0.3 crore shares.
“We expect Cochin Shipyard to be on premium with a listing gains of over 20 percent," Mustafa Nadeem, CEO, Epic Research said.
Most domestic brokerage firms have recommended investors to subscribe to the issue on account of attractive valuations, healthy order book, and low debt on books as well as quality management.
Brokerage houses largely recommend subscribing to the issue, citing penetration in areas that large financial institutions are absent from, but also flag risks of change in business environment, among others.