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Punjab & Sind Bank aims growth of 27.5% in FY11

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Coal India issue price band set at Rs 225-245

The price band for Coal India’s initial public offering (IPO) will be between Rs 225 and Rs 245 apiece, coal minister, Sriprakash Jaiswal said on Tuesday.

The company will offer 5% discount to the issue price to its employees and retail investors.

The government will put on block 631.64 million shares, of which 63.16 million shares will be reserved for employees. At the higher end of the price band, the company will mop around Rs 15,500 crore, making it the largest ever IPO in the Indian capital market history. So far, the biggest IPO to hit the Indian capital market is Reliance Power, which raised Rs 11,563 crore in January 2008.

The IPO will be open between October 18 and October 21. It will close a day earlier for the qualified institutional buyers (QIBs).

At this price band, the issue price is at a discount to its global peers. The company price-to-earnings multiple based on its FY10 EPS works to 15.73 times at the upper end of the price band, while it is 17.65 for China Shenhua, and 31 for Peabody Energy, USA’s leading coal producer, based on its December 2009 earnings. On listing, Coal India could become the second most valuable coal producing company with a market capitalisation of $35 billion compared with $84.7 billion for China Shenhua, as per Bloomberg data.

The issue comprises 10% of the post-offer paid-up share capital of the company. About 50% of the issue will be allotted to QIBs on a proportionate basis, 15% to non-institutional bidders or high net worth individuals (HNIs) and the rest to retail individual bidders.

The government may allocate up to 30% of the QIB portion to anchor investors, of which at least a third will be reserved for domestic mutual funds. Citigroup, Deutsche Bank, Bank of America, Enam Securities, Kotak Mahindra and Morgan Stanley will manage the IPO. Three rating agency, Crisil, Icra and CARE, have assigned the highest grade of 5/5 to the IPO, indicating strong fundamentals.

Career Point Infosystems, debutes 104% up

Tutorial services provider Career Point Infosystems which listed today has registered a massive gain of 104%, or Rs 322.35 to close at Rs 632.35 on the BSE. It listed at Rs 461.10 as against issue price of Rs 310. The company raised Rs 115 crore through the issue, which opened for subscription during September 16-21, 2010. It was subscribed 47.39 times. Career Point's market capitalisation stands at Rs 1,146.64 crore.

The company intends to use issue proceeds for construction and development of an integrated campus facility; expansion of classroom infrastructure and office facility; acquisitions and other strategic initiatives; and to meet expenses towards general corporate purposes.

In an exclusive interview Pramod Maheshwari, CMD and CEO of Career Point today said that the company will continue to grow at its historical run-rate of 25% year-on-year. He said in terms of the revenues, the company would end the current fiscal with Rs 80-85 crore. He is also hopeful that the company would post Rs 25 crore in profits for the fiscal. He added that Career Point would be adding facilities for about 2,000 students as part of its capacity expansion plans in FY12.

Brokerages bullish on Eros International Media

The Rs 350 crore IPO of Eros International Media, part of the Eros Group, which is a global player within the Indian media and entertainment sector, has been subscribed nearly 50%, as per data available on NSE website.

It has fixed a price band of Rs 158-175 per equity share for the issue, which closes on September 21, 2010.

Why are brokerages bullish on Eros International Media?

Experts as well as brokerage firms look bullish on this issue and advised subscribing the same. Investment Advisor, SP Tulsian says, the issue seems to be fairly priced. "Those looking to take an exposure in this sector, can go for it!"

KRChoksey says, "Considering potential growth in Film industry and expanding exhibition platform in India, we see strong opportunity for increase in theatrical revenues, thereby providing opportunity for movie content and distribution players. Also we are sanguine about rapid analogue to digital migration and emergence of new digital media platforms which have provided the opportunity to de-risk the movie business model through pre-sale of rights. Eros with 30 years of experience in acquiring movie rights and strong movie distribution network in India is expected to largely benefit."

"In addition, Eros has partnership agreement with Eros plc which gives ready exposure to international revenues. On upper price band, the issue is priced at 13.8x of consolidated FY11E EPS of Rs 12.6 which is at significant discount compared to its closest peer UTV Software, trading at FY11E P/E of 33x. We recommend a subscribe to Eros International Media IPO," according to its report.