Gujarat Pipavav Port has fixed the issue price for its Rs 500 crore public issue at Rs 46 a share while price band was at Rs 42-48.

The initial public offer (IPO) of Gujarat Pipavav Port was subscribed over 19 times on Thursday, the final day of bidding, reflecting a strong appetite from investors for public issues.

Prakash Steelage IPO on first day of trading, five qualified institutional investors (QIBs) sold their entire allotment, which are -

Shares of Prakash Steelage Ltd — the stainless tubes and pipes maker which came out with its maiden flotation recently— leapt almost 71 per cent on listing, yielding huge gains for stags.

Shares of Prakash Steelage (PSL), engaged in the manufacturing of seamless & welded stainless steel Pipes, Tubes and U-tubes, started day at Rs 122, a premium of 10.9% over its issue price of Rs 110 per share.

Issue Opens: August 23, 2010
Issue Closes: August 26, 2010
Lot Size: 130 Shares & in multiples of 130 shares
Price Band:Rs 42 to Rs 48
Issue size:Rs 500 crore
IPO Rating:CRISIL Rating 4/5
Gujarat Pipavav Port Ltd (GPPL) is India’s first private sector port having multi-cargo and multi-user operations. GPPL is the developer and operator of APM Terminals Pipavav.

SP Tulsian, Subscribe to GPPL IPO

Investment Advisor, SP Tulsian has recommended this issue for investment even at the upper price band of Rs 48 per share. “As the infrastructure projects have huge potential and this being an operational port with the strong pedigree of the APMM Group, it represents an excellent investment bet.”

Anagram Research

“At the lower price band, GPPL is valued at 4.3x its P/BV and 4.9x at the upper price band. Mundra Port on the other hand is available at 100% premium as it’s already profit making company and has positive (16%) return on its net-worth. Though GPPL is a loss making company, on the back of traction from rising global trade, rapid industrialization in the state of Gujarat and strategic location of the Port, we believe, rise in cargo handling and lower interest out go would prove to be a turn around case for GPPL and investor can ‘Subscribe’ to the issue with long-term horizon.”

Mehta Equities : Subscribe to Gujarat Pipavav Port IPO

Mehta Equities expects the company’s operational efficiency to improve substantially on phase by phase expansion. “The strong background of A.P Moller-Maersk group, strategic location and fast growth in volumes will compel growth of the port going forward. We expect that the funds from the proceeding IPO would significantly reduce debt, the company could well move into the profit zone in a couple of years. While looking at the long term growth prospects of the company, Industry and scope to expand the margin we advice Investors to subscribe to this IPO with healthy returns on Investment.”

Way2Wealth

“At the lower and upper end of the price band, the issue is quoting at P/BV of 4.3-4.9x its Dec FY09 Book Value of Rs 9.78. Its peer in this space is Mundra Port trading at P/BV of 9x and PE of 46x FY10 EPS of Rs. 17.5 per share. The traffic at ports in India is expected to increase to 954 million tons per year by 2012 & 1167 million tons by 2014. Traffic at the ports is expected to surge at a CAGR of 9.7% from 2008-2014 due to buoyant Indian economic growth. But we do believe that GPPL as compared to Mundra Port is comparatively smaller and it will take time for the company to deliver a positive PAT. One can definitely look for better avenues to park their money for better returns. Since not much peers are available we suggest going long on Mundra Port to enjoy higher comparative valuation. We give an avoid for the issue.”

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