By V S Fernando, IPO Analyst at India Aarthik Research
A company whose aggregate profit in last five years was only Rs 2.6 crore and reserves is just Rs 1.1 crore is asking for a share premium of Rs 45 crore! How can one justify a market cap of Rs 360 crore plus for a company whose aggregate turnover in last five years was only Rs 135 crore? Absurd valuation short-circuits genuine appreciation prospects on M&B Switchgears.| OFFER AT A GLANCE | |
| Name | M and B Switchgears Ltd |
| Offer Quantity | 50 lakh shares of Rs 10 each |
| % on Total Equity | 25.0% |
| Offer Price | Rs 180 to Rs 186 |
| Offer Amount | Rs 90 cr to Rs 93 cr |
| Application Quantity | 30 & Multiples of 30 |
| Offer Opens | September 28, 2011 |
| Bid/Offer Closes | October 5, 2011 |
| Rated By | ICRA |
| Rating | 2 out of 5 |
| Lead Managers | D & A Financial |
| Registrars | Bigshare Services |
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