03 September 2014

Snowman IPO - what is your chance in getting share? 5%

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Snowman Logistics IPO was oversubscribe 41.26 times

So some say chance/probability you get share is 1 in 41 or around 2.5%

NO, this is not how it work after new SEBI regulation.


2.6 lac application received for Snowman IPO. Some apply minimum lot (1 lot or 300 share for Rs 14,100) some do full 14 lot (4,200 share) for Rs 197,400

But whatever you invest you will get ONLY 1 lot. which is why we advice to invest in one lot ONLY.

CALCULATION:
Share reserve for retail:  4,200,000 shares
Share allotment to lucky investor = 1 lot (300 share)
No. of investor get share = 4,200,000/300 = 14,000

No of applications: 2.6 lac
Ratio =2.6 lac/14,000 =18.57

Or 1 on 18.57  or approximately 5.38%


ONLY 14,000 lucky investor will get share. You chance is around 5%



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Next IPOs in Sept: Shemaroo Entertainment & Mante Carlo.

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Two  more IPOs announced for this month.

  1. Shemaroo Entertainment 
  2. Mante Carlo.



Happy investing in IPOs!



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Reasonable valuations of Sharda Crop IPO : Sharekhan

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Key investment positives
Asset-light business model with core competence in
registration of ingredients
The company has an asset-light business model whereby
it focuses on identifying generic molecules, preparing
dossiers, seeking registrations, and marketing and
distributing formulations through third-party distributors
or its own sales force. As of August 5, 2014, SCL has over
180 good laboratory practices (“GLP”) certified dossiers
and as of July 15, 2014 it owns over 1,040 registrations
for formulations and over 155 registrations for generic
active ingredients across Europe, North American Free
Trade Agreement (NAFTA) nations, Latin America and the
Rest of the World. As of August 5, 2014, SCL has filed over
500 applications for registrations globally which are
pending at different stages.
Consequently, the company is able to cater to the demand
for protection of a wide range of crops grown in varied
soil and weather conditions across different jurisdictions
as well as serve turf and specialty markets. SCL also follows
an asset-light business model for its non-agrochemical
operations and supplies belts, general chemicals, dyes and
dye intermediates only on the basis of specific orders
received from distributors. It procures these nonagrochemical
products primarily from the manufacturers
in China or India which provides it the flexibility to cater
to varied customer demands.
Strong global distribution network
The company is undertaking the distribution of formulations
and generic active ingredients through third-party
distributors based in Europe, NAFTA, Latin America and the
Rest of the World. With an objective to increase its presence
in the agrochemical value chain, the company has set up
its own sales force in various countries in Europe as well as
in Mexico, Colombia, South Africa and India. As of date it
has over 440 third-party distributors and over 100 personnel
in its own sales force. SCL is able to increase the penetration
of formulations and generic active ingredients in various
countries because its third-party distributors and own sales
force are present across the globe.
Well diversified product portfolio
The company’s agrochemical business operations are spread
in over 60 countries across Europe, NAFTA, Latin America
and the Rest of the World offering a diverse range of
formulations and generic active ingredients in fungicide,
herbicide, insecticide and biocide segments. In the nonagrochemical
business, the product portfolio comprises
belts, general chemicals, dyes and dye intermediates which
enable it to cater to the varied demands of customers.
Debt-free with strong return ratios
The company has a strong balance sheet with healthy
return ratios. It has maintained a focus on capital
efficiency and has a conservative debt policy (zero debt
as per FY2014 balance sheet). It has the ability to leverage
the balance sheet to take advantage of a favourable
business cycle or market opportunity. The company has
demonstrated a consistent track record of profitability
over the last three years and a 25% compounded annual
growth in the net income over FY2012-14. It has strong
return on capital employed (RoCE) of 25% and return on
equity (RoE) of close to 20%. The net working capital days
have also improved over the last four years and at the
end of FY2014 the net working capital days stood at 99
days as compared with 143 days in FY2010.



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Subscribe to Sharda Cropchem IPO :: Hem Securities

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Asset light business model
Company have an asset light business model whereby it focus on identifying
generic molecules, preparing dossiers, seeking registrations, marketing and
distributing formulations through third party distributors or its own sales force.
Company procure formulations and generic active ingredients in their finished
form from third party manufacturers for onward sale. Company also procure
generic active ingredients for preparation and sale of formulations wherein it
outsource the process of preparation of formulations to third party formulators.
This, benefits company in terms of cost competitiveness and helps it to offer varied
range of formulations as well as generic active ingredients in a timely manner.
This business model also allows company to channelize and efficiently utilise its
time, resources and bandwidth towards developing its core competency of seeking
registrations which would otherwise be spent on inter alia identifying and owning
land on leasehold or freehold basis, setting up research and development (“R&D”)
operations and manufacturing or formulation facilities, technology maintenance
and upgradation or hiring qualified R&D employees or maintaining a workforce to
operate at the manufacturing or formulation facilities, some of which are heavily
capital intensive. Overall, the asset light business model helps company pay
unfettered attention and invest capital and time on identifying generic molecules
and corresponding formulations and generic active ingredients, preparing
dossiers and seeking registrations, thereby driving co’s portfolio of formulations
and generic active ingredients.


Global distribution network 
In the past, company was undertaking the distribution of formulations and generic 
active ingredients through third party distributors based in Europe, NAFTA, Latin 
America and Rest of the World. With an objective to increase its presence in the 
agrochemical value chain, company have set up its own sales force in various 
countries in Europe as well as in Mexico, Colombia, South Africa and India and 
other jurisdictions in addition to third party distributors. As of August 5, 2014, 
company have over 440 third party distributors and over 100 personnel of its own 
sales force in over 60 countries across Europe, NAFTA, Latin America and Rest of 
the World. 
Core competency in registration 
Co’s core competency lies in identifying opportunities in generic molecules and 
corresponding formulations and generic active ingredients, preparing dossiers 
and seeking registrations in the relevant jurisdictions. Co’s library of dossiers & 
number of registrations owned by company have increased progressively. 




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INITIAL PUBLIC OFFER (IPO) SHARDA CROPCHEM LIMITED : Kotak Sec

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INITIAL PUBLIC OFFER (IPO)
SHARDA CROPCHEM LIMITED
ISSUE PERIOD: SEPTEMBER 05 - SEPTEMBER 09, 2014
 



Sharda Cropchem Limited has proposed to sell 2,25,55,124 Equity Shares exclusively through Initial Public Offer (IPO) between September 05-September 09, 2014.

Company NameSharda Cropchem Limited
Issue Period
September 05 - Sepember 09, 2014
Price BandRs 145/- – Rs 156/- per equity share
Lot Size90 shares & in multiple of 90 shares thereafter
Issue SizeINR 351.85 crs (at INR 156 per share)
Face ValueRs. 10 each.
ListingTo be listed on NSE & BSE
Who Can InvestResident Indian individuals, HUF, Companies, corporate bodies, scientific institutions, societies and trusts, NRIs, FIIs

Highlights of the Company
  • Sharda Cropchem Limited was incorporated as Sharda Worldwide Exports Private Limited on March 12, 2004 as a private limited company. Company was converted into a public limited company on September 18, 2013
  • Sharda Cropchem Limited is a crop protection chemical company engaged in the marketing and distribution of a wide range of formulations and generic active ingredients globally. It is also involved in order based procurement and supply of Belts, general chemicals, dyes and dye intermediates.
  • Company recently entered into the biocide segment and have acquired several registrations from the existing registration holders, primarily, in Europe.
  • Company has diversified range of formulations and generic active ingredients in fungicide, herbicide and insecticide segments for protecting different kind of crops as well as serve turf and specialty markets and in biocide segment as disinfectants, thereby catering to varied market demand
Company Profile
  • Net Profits after tax: INR 1069.03 million as on 31st March 2014
  • Total Income: INR 8,147.39 million as on 31st March 2014
  • Net worth: INR 5,528.96 million as on 31st March 2014.
     

 


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Apar Inds Report : Centrum

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Rating: Buy; Target Price: Rs470; CMP: Rs335; Upside: 40%



Multiple triggers ahead; Initiate with a BUY



We initiate coverage on Apar Industries (Apar), a diversified company,
with a BUY rating and a PT of Rs470 implying a 40% upside. We are
optimistic on the company due to (1) Apar being a preferred play on
T&D reforms in the power sector; (2) Margins bouncing back; (3) Return
ratios jumping, revealing a strong outlook and (4) Attractive
valuations. This apart, we highlight that monetisation through listing
of each division could unlock value and make Apar a multi-bagger
entailing an upside of 142%, which we have not factored-in.

$ Preferred play on the uptick in Transmission & Distribution cycle:
With reforms nearly over in power generation space, we strongly
believe that pick-up in T&D capex cycle is imminent and is the crux of
power sector reforms. As a thumb rule, +25% of the T&D capex is
represented by conductors, transformer oil and cables. Apar with its
45% market share in the supply of transformer oil, 23% market share in
conductors and positive turnaround in its cables division is a key
beneficiary. Also, its cost competitiveness, consistent order wins,
healthy order book, niche product offerings, increasing exports,
preferred supplier to over 80% customer base and shift to high margin
products like high efficiency conductors and supply of transformer oil
in the 400kV and above transformers make Apar the best preferred play
on the T&D upcycle.

$ Robust financials make Apar a strong investment case: A conservative
16% CAGR in EBITDA earnings and 30% CAGR in PAT earnings over FY14-17E
coupled with RoE of 21% in FY17E, turning free cash flow positive over
FY15-FY17E and current valuations at a discount to peers, make Apar a
compelling investment bet. We emphasise that for such a turnaround
case, only FY17 would represent a return to stable earnings, and
demonstrate that even modestly better margins, realistic for Apar, can
lead to materially positive earnings surprises.

$ Possible value unlocking through monetization of divisions – A
multi-bagger in the making: We believe that as a logical long term
outcome, Apar will look at monetizing its divisions – conductors,
transformer oil and cables through separate listings on the bourses,
unlocking value for its shareholders. Apar trades at a discount to its
peers and on assigning comparable valuations of peers to each of its
divisions we see further deep discount, an anomaly which would be
rectified through re-rating. Our scenario analysis indicates fair
value following different methodologies between Rs635 to Rs810 thus
making Apar a multi-bagger.

$ Valuation and Key risks: We initiate coverage with a BUY rating and
a PT of Rs470 based on Sep-16E which is derived as the average value
using fair multiple assigned to EV/EBITDA, EPS and BV. Apar currently
trades at steep discount to its peers, which cap the downside. Key
downside risks are (1) Lower margins; (2) Acquisition/Investment which
are not EPS accretive and (3) Skewed product mix. The stock has
limited coverage on the street.



Thanks & Regards



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Kostak, Grey Market Premium for Sharda Cropchem IPO strategy; INVEST!!

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Sharda Cropchem

Price band:  145-156
Grey Market Premium (GMP) Rs 40-42

To maximize profit, Go for minimum size application of 90 shares  (1 lot) for Rs 14,040/-

Kostak Rs 650-700 for minimum application (1 lot)

Expected to be oversubscribe at least 30x


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Snowman IPO: listing strategy!

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Snowman IPO update:
Grey market premium (GPM) Rs 23

IPO price will be Rs 47

SELL AROUND Rs 70!


50% gain if you are lucky to get share!!


Allotment by lottery! If you get 300 share allotment, you will make profit around Rs 6,900

300 share X 23 profit/share = 6,900


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