Wednesday, December 2, 2009

Some thoughts on IPOs

This post is to highlight the fact how investors are fooled into investing in IPOs. The basic idea of the post is to show that some of the companies coming up with IPOs in the last 5 years raised more money in their IPOs than their total market cap today. Please have a look at the table:

CompanyIPO timeOffered EquityTimes SubscribedRaised MoneyMarket Cap Today
Raj TelevisionFebruary 200727.5%2.3691.7 Crore78 Crore
AMD MetplastFebruary 200742.16%4.8876.25 Crore56 Crore
Oriental TrimexFebruary 200764.50.9548 Crore22 Crore
Evinix AccessoriesFebruary 200732.71%3.442 Crore35 Crore
Broadcast InitiativesFebruary 200744.27%2.36102.6 Crore36.5 Crore
Indus FilaFebruary 200725%1.3482.35 Crore50 Crore
Euro CeramicsFebruary 200732.87%2.8692.75 Crore71 Crore
Transwarranty FinanceFebruary 200742.86%1.5231.2 Crore19 Crore
Cinemax IndiaFebruary 200731.86%41.86138.26 Crore160 Crore
House of PearlFebruary 200733.52%3.67362.83 Crore172 Crore
XL TelecomDecember 200626.07%8.159.35 Crore80 Crore
Ruchira PapersNovember 200645.57%2.5328.5 Crore19.5 Crore
Blue BirdNovember 200625.07%4.8292.14 Crore100 Crore
Global Vectra HelicorpOctober 200625%3.5364.75 Crore60 Crore
Hov ServicesSeptember 200632.3%2.5181 Crore89 Crore
Lokesh MachinesMay 200625.47%19.3742 Crore52 Crore
R SystemsMarch 200632.57%3.36110.21 Crore105 Crore
Uttam SugarMarch 200615.53%4.63136 Crore156 Crore
Nitco TilesMarch 200644.9%4.51184.8 Crore162 Crore
Nitin SpinnersJanuary 200657.14%16.5149 Crore29.5 Crore
Celebrity FashionsDecember 200525.5%23.681 Crore35 Crore
Kernex MicrosystemsDecember 200534.85%22.9599 Crore105 Crore
Prithvi InformationDecember 200525.17%15.27135 Crore116 Crore
SPL IndustriesJuly 200531.03%28.2663 Crore30 Crore

The list is so long my finger pains and I am not including more.

Investors bought fraction of a company at a price and today the whole company is available at a fraction of that price, after two-three years. I don't believe in Efficient Market Hypothesis, so I do believe some of the companies listed above and also some which have not been included are real bargain today. I would see if I find some bargains and list in the next post.
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ParagRAPh said...

I have been tracking R systems lately, and i do think it is a good bargain at the current price. The big doubt I have is the European acquisition they made--last qtr they announced that some customers are cancelling the contracts , and Rsystems may be left with a high cost EU workforce, and not much revenue traction.

Clark Luca said...

Don't stop making money. Money is primary!

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