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Emerging companies - Mid caps that can become large cap
 The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Emerging companies - Mid caps that can become large cap
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smartcat
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Quote smartcat Replybullet Topic: Edelweiss Capital - Rare Wild Flower!
    Posted: 15/Nov/2007 at 2:44pm
Originally posted by basant

Edelweiss will list at US$1.5bn mkt cap? What are they doing differently from MOtilal and Indiainfoline?Any ideas?
 
While Motilal and Indiainfoline earn most of their revenues from retail sector, Edelweiss is more like an institutional brokerage and an investment banking house - a micro-Goldman Sachs if you like. The two stocks you mentioned are however trying to get into institutional brokerage business.
 
Edelweiss seems to be the only independent signifcant player in investment banking business, especially after JM Financial dissolved the tie-up with Morgan Stanley.
 
I don't think Edelweiss will get into retail broking business. I personally like Edelweiss because their research reports are extremely well written (almost as good as Motilal). And their stock recommendations/calls are very clear (Sell, Reduce, Accumulate, Buy) and fairly accurate.
 
Services Offered:
 
- Investment Banking (M&As, Private Equity, Real estate advisory etc)
- Institutional and HNI brokerage business
- Asset/Wealth Management for HNIs/corporates.
 
Financials:
 
 
                                      FY05        FY06        FY07        FY08E 
Revenues (Rs. Cr)           77             158           371            520
Net Profits (Rs. Cr)          22               40           109            230
 
 
Note: A significant part of income is through trading in equities. However, this should be considered as a part of its core income because that's what global investment banks like MS, GS etc excel in.
 
 
 
 
 
 
 
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tigershark
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Quote tigershark Replybullet Posted: 15/Nov/2007 at 3:04pm
at what price is the issue priced and what will be the mkt cap and whats the equity post ipo
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
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Quote aloksahi1971 Replybullet Posted: 15/Nov/2007 at 3:19pm
Edelwise is a fantastic play in the financial sector.They are in a niche space of institutional fianace and in case you visit the web site are into whole sale financing.This makes for risk free handsome earning. They are prety open with this regard and not as secretive as Kotak who go through different companies for this purpose. The issue is priced richly at 825 ( but the Grey market has already given it 500+ gains on listing . This is good for the long term too considering that equity investment is in the nacent stage in India and will only rise with rise in diposable income .
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smartcat
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Quote smartcat Replybullet Posted: 15/Nov/2007 at 3:35pm
This wholesale financing stuff is pretty cool.
 
We help promoters by financing against their share holding to meet their business requirements, expansion of businesses and for diversification of the lines of business.
 
Loan Against Shares of a different variety! I wonder if this will become popular.
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deveshkayal
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Quote deveshkayal Replybullet Posted: 15/Nov/2007 at 3:43pm
Edelweiss is one of the Lead Managers for Kolte-Patil and Renaissance Jewelry IPO.
 
From next month, market will start pricing in FY09 numbers and Edelweiss at upper band trades at 18x on FY09E.
 
Since their retail exposure is small, margins are high.
 
Rasesh Shah also fits into the Basantji's critieria of IIM-A. Rasesh , Sanjeev of Info Edge and Subhiksha MD are all part of the same batch !!
 
Edelweiss can compared to India Infoline which is trading at higher multiples on FY09. Less competition in institutional broking space.
 
Disclosure: I am planning to apply for IPO.


Edited by deveshkayal - 15/Nov/2007 at 6:50pm
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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aloksahi1971
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Quote aloksahi1971 Replybullet Posted: 15/Nov/2007 at 3:47pm
Placing a calculated bet on exsisting promoters to expand business is a part of their work they have capability to analyse the future growth . banks are more interested in the recovery of their assets and interest rathar than expantion and all.
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deveshkayal
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Quote deveshkayal Replybullet Posted: 15/Nov/2007 at 4:01pm

Market Cap:

India Infoline - 6410 crs
Indiabulls - 17774 crs
JM Financial - 7489 crs
Motilal Oswal - 4875 crs
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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MuKeShHaRlAlKa
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Quote MuKeShHaRlAlKa Replybullet Posted: 15/Nov/2007 at 4:49pm
the issue size is 690 crores at upper band of 825/share
this works out to be a market-cap of 6900 crore

considering its grey market premium of Rs 850 if the share lists at Rs 1700 then market cap would be around 15000 crore

is this valuation justified?
In Cricket & Stock Markets, everyone seems to be an expert but only a few really are.
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