RITES IPO opens for subscription on June 20. Should you invest?

Established in 1974, RITES has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East

The initial public offer (IPO) of RITES – a government-owned railway consultancy firm and a Miniratna (Category – I) Schedule ‘A’ Public Sector Enterprise – opens for subscription on June 20. The price band for the issue has been fixed at Rs 180-185 a share (discount of Rs 6 per share for retail shareholders and employees), and the government aims to raise up to Rs 460 crore via this sale. The issue closes on June 22.

Established in 1974, RITES has undertaken projects in over 55 countries including Asia, Africa, Latin America, South America and Middle East regions. It is the only export arm of Indian Railways for providing rolling stock overseas (otheRITES IPO, IPO, Angel Broking, Centrum Wealth, Arihant Capital, Indian Railways, Infrastructure, PSU IPO, Markets, Market newsr than Thailand, Malaysia and Indonesia).

Going ahead, the company plans to scale up operations in the transport infrastructure space (expansion into turnkey railway, airport, metro projects etc.) along with strengthening its international operations, reports suggest.

So, should you subscribe to this IPO? Here's what leading brokerages across the country suggest.

ANGEL BROKING

In terms of valuation, pre-issue price-to-earnings (PE) works out to 12x of annualised FY18 earnings per share (EPS) of Rs 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.

Also Read: Investors will know we are here for 44 yrs, like an Indian MNC: RITES CMD

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 subscribing to issue.

CENTRUM WEALTH

Over FY13-17, RITES registered revenue and PAT CAGR of 9% and 11%, respectively. Average earnings before interest, taxation, depreciation and amortisation (EBITDA) margins and return on equity (RoE) over the period stood at 28% and 18%, respectively. RITES is a virtually debt free company.

At the higher end of the price band of ₹185, the issue is priced at P/E of 10.5x (post dilution) on FY17 and 11.4x on 9MFY18 (annualized) basis, which we believe is attractive. The company has no listed peer. Given RITES competence along with good track record, healthy financials and attractive valuations, we suggest that investors Subscribe to the issue.

ICICI Prudential Life Insurance lists below issue price

The stock is listed at Rs 330, 1.2% below its issue price of Rs 334 per share, on the National Stock Exchange

ICICI Prudential Life Insurance has listed at Rs 330, 1.2% below its issue price of Rs 334 per share, on the National Stock Exchange (NSE).

At 10:01 am, the stock was trading at Rs 331.60, after hitting a high of Rs 333.80 post its listing.

ICICI Prudential Life Insurance has raised Rs 6,057-crore through initial public offer (IPO), become the first insurer to list.

The company's public issue was oversubscribed 10.5 times. The quota set aside for qualified institutional buyers was subscribed 11.83 times while for the non-institutional investor category, it was 28.55 times. The retail portion was oversubscribed 1.42 times, the exchange data shows.

The insurer is a venture between banking major ICICI Bank and UK's Prudential Corporation Holdings. Singapore's Temasek and PremjiInvest are also the shareholders.

At the end of financial year 2016 (FY16), ICICI Prudential was the biggest private sector insurer in the Country having a market share of 11.3%. The company has 521 offices with around 10,663 employees and 121,016 advisors all over India as of FY16. ICICI Prudential Life’s total premium and net profit has risen at a CAGR of 8% and 5% in the past four years, respectively.

Article Source: Business Standard

L&T Infotech IPO subscribed nearly four times Edit

L&T Infotech IPO subscribed nearly four times

Larsen & Toubro (L&T)'s 10 per cent stake sale in its IT services arm L&T Infotech has been lapped up by investors. The company’s Rs 1,236-crore initial public offering (IPO) has so far seen four times more demand than shares on offer. The 12.25-million share offering has attracted bids of 43 million bids from investors, data provided by exchanges showed.

Bulk of the bids have come from qualified institutional buyers (QIBs) and retail investors. TheQIB segment has been subscribed five times, while the retail category is subscribed nearly four times. The high networth individual (HNI) segment has so far garnered 60 per cent subscription.

The IPO has so far seen around 500,000 applications from retail investors. The issue closes on Wednesday. Good post-listing performances of almost all recent IPOs have buoyed investor sentiment towards the primary market.

Typically, most of the bids in an IPO come on the last day, but investors, particularly retail and institutions, have been subscribing to IPOs on the first day itself. Previous, two IPOs of Quess Corporation and Mahanagar Gas, too, had seen the shares getting lapped up in the first two days of the issue. Read more.