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aloksahi1971
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   Posted: 15/Nov/2007 at 4:59pm |
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Justification is there for the rich valuation set by the company,not for that set by the punters.But who are we when in these times RPL has valuation of more than Infosys and Rakesh Junjunwala seems to be humbled by this market exuberance!!!
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MuKeShHaRlAlKa
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Posted: 15/Nov/2007 at 5:51pm |
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since the issue size is not a large one so the FIIs and Institutions will get very less allotment. So they would try to mopup the shares at the day of listing.
Crisil has rated this ipo a grade of 4 out of 5. This would be a blockbuster of an ipo
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In Cricket & Stock Markets, everyone seems to be an expert but only a few really are.
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deveshkayal
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Posted: 15/Nov/2007 at 6:48pm |
Very Useful Information.MUST READ
Edelweiss Capital president and co-head-institutional equities Naresh Kothari in conversation with ET . Excerpts:
Where do you think is the institutional broking space currently placed in India, in terms of revenue, players, size and entry barriers?
In terms of revenue, the overall commission market is about $500-800 million. There are about 10-12 large international players and about 7-8 large domestic players who together form about 80% of the market. Currently, there are quite a few significant entry barriers and, therefore, not many new entrants. The biggest entry barrier is definitely in terms of a large research platform. I don't think it is easy to build scale in this business. Second, is establishing a network. These two form the business' core.
How has brokerage rates changed? Have they fallen in line with retail broking or is there a difference in this segment?
On the institutional side, there is a large element of fixed cost that we incur and I don't think that the rates will come down drastically. There is always pressure on commission, but I think the volume growth has made up for it. The volumes in the cash market have gone up significantly. Overall, I think the commission pie has not reduced because of that. There has been a lot of action with many a player looking to enter the business in a big way.
In such a scenario, where do you place yourself and what is the major competition that you will face?
We expect competition to continue and intensify in the future. However, opportunity in India is fairly widespread. India has anywhere between 800-1,000 companies, out of the 4000-odd listed companies, which are of investment grade. On the other side, we have about 2,000-2,500 institutional investors.
You can clearly see that market opportunity cannot be restricted to just 5-10 players. As of March 31, 2007, we had over 150 institutional investors actively doing business with us and approximately 135 professionals in our institutional equities business.
Funds are being raised within India and abroad for investment here. How do you think this will benefit the institutional broking space in India?
The total AUMs are going up substantially in India every year. This is why the institutional broking business looks very attractive to players. This is going to continue as opportunities keeps growing. Unlike putting up a steel plant or a manufacturing unit, this space is very easy to enter.
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One more on Investment Banking
For instance, a firm like Merill Lynch will have a cut-off fee for an IPO of at least $2 million, this means it can work only on IPOs of more than Rs 1,000 crores. Even Citibank and UBS, who are doing small IPOs for market penetration, may not pursue it in the long run. Even for M&A transactions, global banks cannot compete for mid-sized deals. Mr Khanna, says, "If its a cross-border transaction and the deal has come from India its difficult to excite the overseas offices in a global bank. The deal has to be worth $2 billion to $3 billion for them to find it worthwhile. How many such deals are there in India." The maximum number of overseas acquisition by Indian firms fall in the $100 million to $500 million-range. This is the area that Indian investment banking firms plan to play. (ET)
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"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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deveshkayal
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Posted: 15/Nov/2007 at 6:53pm |
Originally posted by MuKeShHaRlAlKa
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?
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Slight correction, market cap will be 6200crs. Edel Cap deserves premium valuation bcoz of high margins. Yes, if it list at 15000 crs, it will be expensive.
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"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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xbox
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Joined: 10/Sep/2006
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Posted: 15/Nov/2007 at 4:36am |
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Remember people made more money in DLF than Vishal retail at IPO. People could make little money from this IPO as allotment size will be very small. Listing of Edelweiss Capital will re-rate some of listed brokers. Real money will be made in listed space. Play has already started. Market is quite excited on this space.
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Don't bet on pig after all bull & bear in circle.
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MuKeShHaRlAlKa
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Posted: 15/Nov/2007 at 10:51am |
Originally posted by xbox
Remember people made more money in DLF than Vishal retail at IPO. People could make little money from this IPO as allotment size will be very small. Listing of Edelweiss Capital will re-rate some of listed brokers. Real money will be made in listed space. Play has already started. Market is quite excited on this space. |
yes u r right Indiabulls has already run up to 800 and IndiaInfoline has also crossed the 1100 mark. Religare listing will also have a positive impact on listed brokerage cos.
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In Cricket & Stock Markets, everyone seems to be an expert but only a few really are.
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smartcat
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Posted: 15/Nov/2007 at 11:15am |
Real money will be made by holding on to Edelweiss for a few years - even after buying at listing price.
The price at which Edelweiss would list will not affect my decision to buy the stock - it will only affect the amount of investment.
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deveshkayal
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Posted: 15/Nov/2007 at 11:34am |
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After listing, i feel "Good business at a good price" wont remain. Good thing is that they priced the issue at 825 bcoz for most retail investors 20 Rs stock is cheaper than Rs 100 stock!
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"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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