Talwalkar IPO
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Our stocks. Buy hold or sell - The help ourselves Board
Forum Discription: What do we do with our stock portfolio.Ask any member and for a short opinion.If you know something about a particular stock do tell the forum.These will later be put in as seperate topics
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2732
Printed Date: 03/May/2025 at 6:18am
Topic: Talwalkar IPO
Posted By: samirarora
Subject: Talwalkar IPO
Date Posted: 20/Apr/2010 at 4:39pm
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Talwalkaars was doing ok in my town, and then Gold's gym opened, and even people who had paid advances, are now gold's gym members..
As for me, i just have my own equipment, with equipment becoming cheaper and more easily available, many people prefer to get the gadgets and weights home..
things are changing real quick, and just because a concept seems to work in other countries, for example like in the US, it is not necessary that it will work here.
In the US, people earn to enjoy, in india, people earn to save and save and save, although with the new generation, saving is a bit of a lesser issue, but all the same, genes of indians are a bit diff from genes of white people and that must be kept in mind.
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Replies:
Posted By: nav_1996
Date Posted: 20/Apr/2010 at 8:23pm
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Gym is commodity with low entry barrier. Also, there are local gyms in each locality which has its loyal fans. Marico is pulling out of Kaya Life.
Difficult to make money here. |
Posted By: TCSer
Date Posted: 20/Apr/2010 at 8:39pm
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Please dont forget that one of the most savviest but low profile indian investors prof mankekar of bajaj institute who bought pantaloon at 16 n financial technologies at 60 rs n exited after earning multi multi baggers is one of the confident investors in Talwalkars. there are other real savvy investors as well. |
Posted By: nav_1996
Date Posted: 20/Apr/2010 at 8:47pm
| Ok. I did not know that. It was just my humble opinion about the gym business. |
Posted By: basant
Date Posted: 20/Apr/2010 at 8:54pm
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Prof Mankekar's cost is around Rs 5 or less then that and so is Prashant Desai's (the head of IR at PRIL) cost these guys have creamed out the milk and diluted it with water. Also Mankekar is known for his PRIl but he has had several misses with that he bought Tv 18 at the peak, Asian Electronics, Rishi Lazer, Zee News, Future Capital all these stocks went almost nowhere or actually declined in value. This is one of most bizarre instances of public offering where private investors get to make 25 to 30 times in 3 years and then retail investors are offered a share in the pie! Irrespective of how Talwalkar does I am not one bit interested to be made a sucker and hence I will skip this one. Sometime it is about management integrity and democratization of shareholder rights and when that comes under question everything else is a blind spot for me. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Bhupan
Date Posted: 20/Apr/2010 at 9:29pm
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Read a few articles http://moneylife.in/article/81/4889.html - here and http://economictimes.indiatimes.com/features/investors-guide/IPO-watch-Talwalkars-issue-fairly-priced/articleshow/5830097.cms - there and does not look like a super opportunity to me . I mean 10% margins does not command price range quoted in there . I mean profits and eps are weak indicators going by the size of the enterprise . I guess the major advantage it would take would be the first fitness chain to be listed like domino's pizza company . |
Posted By: TCSer
Date Posted: 20/Apr/2010 at 10:37pm
VERY WELL SAID BASANTJI. BUT I will closely watch the subscription figures.if there is good QIB N HNI response I will apply otherwise not.
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Posted By: hit2710
Date Posted: 20/Apr/2010 at 11:27pm
Yes gym has now become a commodity business. Today I discussed Talwalkar's services with a friend who recently left Talwalkar subscription and found a totally different reason for his quitting. He says that Talwalkar's has started giving life and couple life membership at very cheap rates to compete against the local competition and hence this has given rise to poor quality people coming to the once classy Talwalkar's gym and hence the savvy and choosy people are leaving Talwalkar's to go for other higher grade establishments. I think this cheap life memberships are being offered to shore up revenues prior to and immediately following IPO so that the figures look "nice" and there is a good subscription and good follow up "action" on the stock. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: prashantmohta
Date Posted: 20/Apr/2010 at 12:38pm
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Any idea about the Growth rate of the co.
In grey market it is trading at 150 rs. |
Posted By: TCSer
Date Posted: 20/Apr/2010 at 12:56pm
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OF WHICH PLACE GREY MARKET R U TALKING ABOUT IS IT THE PER APPLICATION RATE OR PER SHARE RATE |
Posted By: TCSer
Date Posted: 20/Apr/2010 at 1:00am
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CAPITALMARKET ALSO FINDS IT EXPENSIVE Valuation The company has set a price band of Rs 123 to Rs 128 per equity share of Rs 10 face value. At the lower band of Rs 123 per share, the P/E would be 51.6 times the annualized EPS of Rs 2.4 for the nine months ended December 2009 (on post-IPO equity) and 82 times the EPS of Rs 1.5 (on post-IPO equity) for FY09. At the upper price band of Rs 128 per share, the P/E would be 54 times the annualized EPS for the nine months ended December 2009 and 85 times the EPS for FY09. There is no comparable listed company. The very high valuation already factors in very high growth rates in future. |
Posted By: prashantmohta
Date Posted: 20/Apr/2010 at 1:07am
| 150 per share. |
Posted By: aloksahi1971
Date Posted: 20/Apr/2010 at 11:15am
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Is there going to be growth in this beyond the Mumbai Market highly unlikely.This is hardly the pizza business where every one wants a peice. They are competing with all 5 star hotels who will gradualy take away all the moneyed crowd. ------------- Born To Golf forced to work. |
Posted By: LearningToFly
Date Posted: 21/Apr/2010 at 12:47pm
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"Sometime it is about management integrity and democratization of shareholder rights and when that comes under question everything else is a blind spot for me." ### Very Good Post Sir. ------------- Success... at all cost. |
Posted By: LearningToFly
Date Posted: 21/Apr/2010 at 12:51pm
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I will surely avoid it. This valuation is ridiculous. PE of 82 for FY2009 is way too expensive. ------------- Success... at all cost. |
Posted By: basant
Date Posted: 21/Apr/2010 at 4:14pm
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My argument is not just about some guys picking up a rupee's worth of stock at 5 paisa but that I should see reasonable amount of scope at listing (I do not apply for IPOs) and in this case since Domminos became such a hot commodity everybody is gunning for this. As Investors we need a big potential to bet big and unless we see big potential in a stock we cannot bet big surely small stakes here and there make little difference.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: LearningToFly
Date Posted: 21/Apr/2010 at 4:51pm
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Very right Basantjee.
One of the ironies of IPO is that companies do this only when they can overprice it so that they can get good money while investors go for it because they think there is gonna be huge appreciation.
This makes the situation more interesting. I also avoid IPO. ------------- Success... at all cost. |
Posted By: myshr
Date Posted: 21/Apr/2010 at 5:21pm
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This bull market has been a god send for many of the companies that had to defer their (expensive) IPO in 2008 and those that had been waiting to raise money from the markets (PSU's included). In the meantime valuations can take a back seat.
Now promotors and early/private investors are able to make hay while the sun shines at the expense of the retail investors. Hopefully, the small investors are nimble and able to flip out on listing with good gains.
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Posted By: j2eeprofessiona
Date Posted: 21/Apr/2010 at 7:48pm
ahh.... didnt know about mankekar's failures .... just out of curiosity basant ji, how did you manage to know about the acquisition price for talwalkar, is this info documented anywhere ? |
Posted By: j2eeprofessiona
Date Posted: 21/Apr/2010 at 7:51pm
talwalkar is pricey, but markets do funny things, they have a panache for peculiar offerings. if gym can be considered commodity with low entry barrier what would one say about pizza business. look what's dominos doing... just ridiculous ..... |
Posted By: addie
Date Posted: 21/Apr/2010 at 9:27pm
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I think the threat of new entrants and 5 star hotels is over-rated. Think of it this way a) India is the diabetes capital of the world + fast becoming a hub for other lifestyle diseases -> people will start becoming more fitness conscious b) If they start exercising, where will they go ? Our cities have such poor facilities (i.e. stadiums/parks etc.) -> so they need to join gyms c) In all unorganized sectors, there usually emerge 1-2 orgnized players that become leaders - Talwalkars has that potential d) As far as Basantji 's comments are concerned based on the PE ratio - I like to refer to one his quotes- "if mathematics and ratios were the key... how come mathematicians arent billionaires?"
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Posted By: basant
Date Posted: 21/Apr/2010 at 9:36pm
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Hi Addie, thanks for registering today and contributing directly to this thread.:) ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 21/Apr/2010 at 7:39am
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this is a no moats business .it is also ahigh capex business.
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: prashantmohta
Date Posted: 21/Apr/2010 at 10:34am
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There are so many ways to find moat.
Finally what the co.s growth rate will rule. If company can create good roe from that extra capital then capex is good. |
Posted By: addie
Date Posted: 21/Apr/2010 at 10:57am
| Yes it is a high capex business.. which is why i feel it is not easy for new entrants.. Also to scale up is not easy here - at best you can have 2-3 gyms ; Eventually players like talwalkars will consolidate this industry by acquiring some of these 2-3 gym players. |
Posted By: vivekbhauka
Date Posted: 22/Apr/2010 at 7:14pm
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talwarkar ---what u have store
well it takes about 2 cr to have one gym.hence the co is having abt 50 gym .net asset book 100 cr .60-70 cr loan.40 cr self reserves. each gym has a turnover of about 1 cr.meaning if u invest 2 cr in one gym u have turnover of 1 cr.hence whatever asset book the co will have turnover will be half.hence now turnover around 50-60 cr. ebitda will be 30%...hence 15-17 cr. so the point is will u invest in a business where u earn around 30% ebitda on one cr with investment of 2 cr...meaning ebitda of 30 lac ..investment 2 cr.15-16% returns. its good.the stock should hence sell at 2-3 times book value easily with that kind of margin.but p/e will depend on growth. if there is growth price to book value will be 3-6 times.post issue bv will be 35-40 rupee.loan portion given 20 cr. but given the growth the price could be 110--240.240 possible only if co has growth prospects for next 3-5 years at same rate. |
Posted By: addie
Date Posted: 22/Apr/2010 at 7:25pm
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Vivek, i am impressed. thats why the investors reads like the whos who in Dalal Street
a) Prof mankekar
b) R Damani
c) Nikhil vora
see the directors - MG Bhide (formerly SBI), Glen Saldhana (Glenmark)..
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Posted By: addie
Date Posted: 22/Apr/2010 at 7:35pm
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just saw the stats.. Institutional buyers have bid 1.5x their quota... so I guess the MFs are seeing value in this.. |
Posted By: j2eeprofessiona
Date Posted: 22/Apr/2010 at 7:40pm
| anything which is niche tends to get the market fancy.... fundmentally how pricey it is issued is totally different thing. |
Posted By: basant
Date Posted: 22/Apr/2010 at 9:27pm
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Addie: It seems you are promoting this IPO on TED and that is not a good idea because TED is only for unbiased views. You have joined in yesterday and have posted only in this thread. If there is some vested interest involved you should put it upfront on the site. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: j2eeprofessiona
Date Posted: 22/Apr/2010 at 9:38pm
this is a very, very wrong way to judge the potential of a IPO. |
Posted By: addie
Date Posted: 22/Apr/2010 at 10:15pm
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TCSer.. i agree that is not the right way to judge. I retract that one!
Basantji: Yes, I do have a favorable view of this stock.
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Posted By: subu76
Date Posted: 22/Apr/2010 at 11:35pm
Some rough calculation on the economics of the business as outlined by vivek.
If a gyn has a turn over of 1 cr => monthy turnover => 8.33 laks
Assuming membership charge = Rs 1000
=>No of members = 833
Assuming it is open for 12 hours (Active time)
=> it needs to have the capacity to accomodate atleat 70 people at any point.
My guess is a place which can accomodate 70 folks samultaneously will have a rent greater than 1 cr in one year.
By this logic the gym will not be making money.
In places where folks can afford to pay more than Rs 1000/month the rents will also be higher.
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Posted By: FutureBull
Date Posted: 22/Apr/2010 at 11:55pm
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FYI,the gym I go to in B'lore has more than 100 members with avg earning per member well above 1k and i'm not counting Yoga, Massage and Aerobics which are more popular.. i believe this will be a good biz in times to come ------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: TCSer
Date Posted: 22/Apr/2010 at 12:02pm
BTW how many of us teddies go to gym  . must be the younger lot who r regulars. |
Posted By: subu76
Date Posted: 22/Apr/2010 at 12:41pm
How many members can the place support samultaneously?
Any idea about the rent?
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Posted By: Mohan
Date Posted: 22/Apr/2010 at 1:21am
I have suggested to them to open a facility next to every dominoes pizza store as the consumer for Dominoes will need them too.  Fitness awareness is increasing in India so the demand is there and now Companies growing to cater to this demand. Like everything else in india, The problem is not demand, but supply. Lets see how this story unfolds. I am going to apply for this issue. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: FutureBull
Date Posted: 22/Apr/2010 at 2:17am
see at any time not more than 25-30 but this starts at 6 AM in the morning and ppl come at different time.. 6.30-10.30 witnesses good rush and again in the evening but ladies who don't work keep coming anytime as this being unisex.. whenever i check register to see how many attended that day I found it touches 100 everyday.. many ppl don't come everyday so it is manageable..and this is very city specific chain not at all national like Talwalkars'
------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: LearningToFly
Date Posted: 23/Apr/2010 at 12:06pm
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Subu's queation is right. He is saying getting 1 crore revenue requires 833 members at any time. This is a big number. A typical Gym has about 100-300 members at any time.
By the way I go to Gym 3 days a week. ------------- Success... at all cost. |
Posted By: vivekbhauka
Date Posted: 23/Apr/2010 at 12:40pm
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i mean to say 2 cr investment in gym equipments infra etc.
ebitda will take care of rentals.after paying rentals ebitda is 30%. 2 cr is capital cost. now talwarkar has 40-50 gyms.turnover also around that level.and asset capital block is 100 cr.thats my findings and co is likely to grow at these ratios. hence i know the ratios.i dont know if they can have 100 gyms..200 or 300....but ratios will work in tandem.so u can work the profitability accordingly. ultimately these are co with potential of 1000-1500 market cap range.so worth that risk.with base valuations around book value of 50-60. |
Posted By: subu76
Date Posted: 23/Apr/2010 at 8:41pm
30% is quite high. Vivek, do you have any data point for this claim?
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Posted By: TCSer
Date Posted: 23/Apr/2010 at 8:46pm
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QIB 35 TIMES HNI 51 TIMES RETAIL 8 TIMES WHAT TO DO NOW |
Posted By: subu76
Date Posted: 23/Apr/2010 at 8:49pm
My 2 cents from limited observation of IPOs is that the stock will do extremely well.
It is one of it's kind and seems to be creating the right buzz.
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Posted By: TCSer
Date Posted: 09/May/2010 at 11:46pm
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Listing happening tomorrow on 10 may 2010. everybody has good allotment . what are you doing selling ,buying or holding |
Posted By: PKB2000
Date Posted: 09/May/2010 at 8:31am
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I have received 92 stocks against my full retail subscription. Anyway it is not a bad thing to get money back at certain times. ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: TCSer
Date Posted: 09/May/2010 at 10:12am
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Talwalkar management has come out with fantastic projection for next 2 years. EPS will be 8-9 rs in march 11 n 12-13 rs in march 12. prof mankekar n ramesh damani are big investors in this company. dont sell your ipo allotment .rather buy more |
Posted By: aloksahi1971
Date Posted: 09/May/2010 at 10:33am
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My guess is that VLCC will be comming out with its IPO that would in my opinion be the stock to be in in the lifestyle and healthy lifestyle stocks.
VLCC now has a pan India presence with at tilt to beauty products and slimming business. ------------- Born To Golf forced to work. |
Posted By: vivekbhauka
Date Posted: 09/May/2010 at 10:35am
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talwarwak management has come with guidance of 80-85 gym with turnover of 170-180 cr.
i have a huge doubt on turnover numbers. i assume that as they are making one cr per gym in turnover,hw can it make 2 cr.because in earlier interview at time of ipo the same management said it has around one cr turnover per gym. hence today management has given a wrong signal that it cant be trusted on words.and because some investors are already invested here therie interest will always be kept by management in giving guidance. hence i can never trust this management on projections.today itself it has brought down my confidence in them. hence i will approach with caution.but if management delivers what it says then there is good appreciation ahead.but i doubt that. |
Posted By: TCSer
Date Posted: 09/May/2010 at 11:41am
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http://www.moneycontrol.com/news/ipo-new-listings/talwalkars-lists-at-rs-14795-eyes-rs-20cr-patfy11_456721-1.html THE INTERVIEW GIVEN TODAY |
Posted By: PKB2000
Date Posted: 10/May/2010 at 4:29pm
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: TCSer
Date Posted: 13/May/2010 at 12:30pm
| http://ak57.in/2010/04/talwalkars-ipo-expensive-but-great-potential-going-forward/ |
Posted By: TCSer
Date Posted: 13/May/2010 at 1:08am
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a few positives about talwalkars * http://www.talwalkars.net/ - Talwalkar is the leader in a sector with huge potential and relatively untapped. * Non promoter share holders in this company includes some smart guys like R.Damani and Shivanand Shankar Manekar ,both are well known for their smart moves and wealth creation in stock market. *There was no 'offer for sale' from these non promoter holders in IPO ,which means they are expecting better days ahead. * Most of the funds raised through IPO is going for expansion of business and repayment of loans * Since 'Talwalkar' the brand name is well known,possibility of brand extension to other related products and services related with fitness segment is easy. * Because of its financial strength ,company is in a better position to compete with un- organised players. * Post listing ,Mutual fund are showing interest and Reliance Mutual fund bought about 15 lakhs shares today ( Total shares offered in IPO was 60 lakhs) |
Posted By: basant
Date Posted: 13/May/2010 at 6:59am
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What is so special about R Damani holding a stake. Was he not the one holding cash as the markets rallied last year. The focus should be on the business then on the investors. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: TCSer
Date Posted: 18/May/2010 at 12:09pm
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latest news reliance mutual fund has increased its stake in talwalkars to 11 percent now.thy have purchased another 5 percent yesterday. reliance was first day buyer earlier in jubilant food n cox n kings as well. they also got out from jubilant food at a decent profit. |
Posted By: basant
Date Posted: 18/May/2010 at 12:14pm
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Please understand why you want to buy the stock? DO not become overly focused on what Reliance or HDFC or any Tom, Dick and Harry are doing they are taking chances with 0.01% of their total corpus so if that is all that you are betting you can focus on them but if you are betting more then there is no substitute for independent research. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: TCSer
Date Posted: 18/May/2010 at 12:45pm
sage words to be chewed upon |
Posted By: prabhakarkudva
Date Posted: 18/May/2010 at 12:51pm
This is really a simple yet powerful insight.Not many think about this when they follow X,Y,Z Mutual fund or when they follow Rakesh Jhunjhunwala.I made this mistake once which i have documented in "How we lost our millions" thread.Bought Autoline with about 25% of my money while i failed to realize than it was less than 5% of RJ's portfolio. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: master
Date Posted: 18/May/2010 at 10:18pm
Very well said. Even that 0.01% is not their money, it's only funds under management with little accountability, so under-performance here & there is not going to hurt them much. But for a small investor... ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: TCSer
Date Posted: 18/May/2010 at 10:46pm
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but anyhow i feel talwalkar to be carefully evaluated.eps of 13 in march 12 n with cagr of 80 percent in last 3 years 300-400 rs price is easily achievable. scarcity premium will be there for this lifestyle company. if the promoters can walk the talk it will be the company of the coming decade.huge growth is staring in the face. for me loss will start if the price goes below 128 which will be anyway my stoploss. |
Posted By: basant
Date Posted: 18/May/2010 at 11:44pm
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That kind of growth was generated for the ipo. I doubt that they can do that kind of growth with the capex structure that they exhibit. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: addie
Date Posted: 18/May/2010 at 6:31am
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I agree that the growth projections are a bit too optimistic.. however, if you are a buyer now, assuming a 30% lower EPS in March 12, it will be around Rs 10/share; If so, I think it might fall back to Rs 170 + per share in FY12. Hence, may not be such a risky bet.
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Posted By: TCSer
Date Posted: 18/May/2010 at 11:10am
Basantji, could you throw some light on the capex structure of the company. |
Posted By: addie
Date Posted: 19/May/2010 at 12:24pm
| but nevertheless, it is a bit overpriced.. probably need to wait for it to drop to below 160 to buy |
Posted By: kulman
Date Posted: 19/May/2010 at 12:45pm
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On a lighter note, here's a take on Tall-Wall-Kars: |
Posted By: chimak10
Date Posted: 19/May/2010 at 12:53pm
| I can see the shorts in the pics!!!!!! |
Posted By: farhaan
Date Posted: 01/Jul/2010 at 1:42pm
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I am a new investor investing for the first time,I have heard that Reliance Mutual Fund has a number of funds can I have some more details about its mutual funds that they offers? |
Posted By: commnman
Date Posted: 27/Jan/2011 at 3:24pm
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Is there any Value in this fitness?
Q3 numbers out, and there is total chaos 
There is a standalone number which is disaster compared to previous quarter. There is consolidated number which is a bit better than disaster. Heard someone from company on CNBC that Q3 for them is worst Quarter and one should not compare it to any other Quarter... I just can't understand how ppl suddenly stop going to gym during October - December  ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: bitu1978
Date Posted: 27/Jan/2011 at 3:30pm
By this logic Jan-March period should be awesome as lot of people have new year resolutions regarding fitness 
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Posted By: Ravenrage
Date Posted: 27/Jan/2011 at 6:34pm
COLD !! People tend to stay home . 
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