This post on RITES Limited IPO tries to bring out consolidated brokerage views , Grey Market Premium, Subscription information. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to RITES Limited IPO or not.
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RITES Limited IPO: Grey Market Premium etc.
19/06/18 Grey Market Premium – Rs. 40/- Kostak Rs. 400/-
Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on RITES Limited IPO .
Angel Broking: “IIn terms of valuations, pre-issue PE works out to 12x of annualized FY18 EPS `17 (at the upper end of the issue price band), which is reasonably priced considering (a) 3.5x of order book with execution capability and experienced management, (b) maintaining the RoE level in the range of 17- 18%, (c) diversified client base and (d) increasing opportunity of revenue from Railways due to new investment in electrification and infrastructure. Given that the RITES is a preferred consultant of Indian Railways along with other government authorities with exposure in international operation and fair valuation of issue, we recommend SUBSCRIBE to issue“
Capital Market: ” Score 55/100, At higher price band of Rs 428, the P/E on FY 17 EPS (on current diluted equity of Rs 183.28 crore) of Rs 26.8 works out to 16. There are no listed players engaged in the manufacturing of missiles in India. Due to the nature of its business, there can be volatility in quarterly earnings and it has to maintain secrecy about its plans at the cost of investor friendliness, which may affect the P/E that it can command.”
Choice Broking:“ On valuation front, at higher price band, the company is demanding a P/E valuation of 10.2x (to its restated FY17 EPS of Rs. 18.1). The issue seems to be attractively priced considering its strategic importance, limited competition, virtually debt free operations and healthy financial performance. Thus considering the above observation we assign a “SUBSCRIBE” rating to the issue with long term investment horizon. “
Mehta Equities: “In the view of the reasonable valuations, buoyant outlook on railway capex, Debt Free and robust order book, we recommend investors to ‘SUBSCRIBE’ on the issue while looking at the volatility in the market, investors may see muted listing gains, with long term perspective stock can deceiver healthy returns.”
Dalal Street Investment Journal: ” Core 53/100; The valuation seems to be attractive. It has strong client base and mainly caters to the Indian Railways. Looking at the volatility in the market, investors may not get listing gains, but they can subscribe for the IPO with long term perspective. “
SMC : “Rating 3/5 The Company was incorporated by the MoR and have the benefit of being associated with the Indian Railways, which is the fourth longest rail network in the world. The company has an experience spanning 43 years and undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East region. Moreover, it has been a debt free company for more than a decade. An investor may opt the issue for long term.”
SP Tulsiyan website: “Track record of past PSU IPOs play spoilt-sport along with the company’s mediocre fundaments. Given reasonable valuations, while there is nothing avoid about it, there is nothing for a subscribe too. In view of the subdued secondary market conditions, listing gains appear unlikely. Hence, one can give this issue a miss. “
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.