Thursday, September 9, 2010

My call on GPPL on IPO........

Gujarat Pipavav makes a stellar debut, up 22% on BSE

Mumbai, September 9, 2010

The country's first private-sector port, Gujarat Pipavav Port, which made a stellar listing on the bourses on Thursday, said it expects to clock a 65 per cent growth in container trade in the current financial year.

Earlier in the day, the Denmark-based AP Moller-Maersk Gujarat Pipavav Port (GPPL) made a resounding listing on both the National Stock Exchange and the Bombay Stock Exchange, with the stock listing on BSE at a premium of nearly 22 per cent, at Rs 56, over the issue price of Rs 46.
It listed on the National Stock Exchange at Rs 56.10, a premium of a little over 22 per cent.
In early trade, the stock jumped to a high of Rs 58 a piece. As many as 3.3 lakh shares exchanged hands on the bourses in during the trade.
The company had mopped up Rs 500 crore through an initial public offer in August, to repay debt and fund its expansion activities.
"We are quite happy with the response we got from retail investors. We would be using about Rs 300 crore to repay our loans, Rs 150 crore as capital expenditure," GPPL Managing Director, Prakash Tulshiani, told reporters after the successful listing.
Currently, the company has a debt of Rs 1,075 crore. Of this, about Rs 300 crore will be repaid from the IPO proceeds.
The company's container and bulk cargo trade has grown 64 per cent and 35 per cent, respectively, and would continue growing at the same pace, Tulshiani added.

My Comments:
That is an excellent perfomance for GPPL.I gave a call to "go for GPPL" ....and I think it is still a buy at this rate of Rs 56.It may dip from here so buy call  is on every Dip.....excellent LT said by the MD, they will keep on growing at 64 and 35 % ...that is an excellent growth for any Co.....I have already discussed reasons why I like not writing it here again.....


  1. raju bhai
    in my opinion we see next rally in sugar scrip.
    i have some insider news that bajaj hin up30% from cmp till deewali.i also like ponni sugar, rajshree sugar,balram pur chinni.
    if u like this sector than advice us your pick

  2. Ashok,
    My pick for Sugar sector is Thiru Arooran Sugar Ltd which is at 180.This is a huge multibagger in making.I have already recomended Thiru many times here from 110-120...
    Super Spinning and Loyal Tex in tex sec and Hitech Gear in AA sec still looks excellent to me.

  3. Rajeev,

    I came across this amazing article in BS.

    Digital information in India to grow 60 fold by 2020: EMC

  4. Hi Rajeev

    Got this in my e mail. wud appreciate ur views on this stock.

    Southern Ispat & Energy (BSE Code - 531645)

    Posted: 09 Sep 2010 01:57 AM PDT
    This company is not about some niche story. This is a case of sheer undervaluation of stock. Again this is no great analysis. I just managed to chance upon the stock. If one of you would have looked at the financials I think you too could have recommended this stock as an investment opportunity.

    Website : Southern Ispat & Energy

    This was just one of the companies till the end of FY09. However, it is after FY09 when the management started taking a more aggressive strategy. And thus last year that is FY10 has been stellar.
    Lets just give you pointers to what I saw.

    a) Revenues have grown from Rs 39 odd crores in FY09 to 272 odd crores in FY10 (about 7 times)
    b) Profit before interest and tax has grown from Rs 1.56 crores in FY09 to Rs 9.78 crores in FY10 ( about 6 times)
    c) PAT has grown from Rs 0.73 crores in FY09 to Rs 7.33 crores in FY10 (10 times increase)
    d) However during the same time the interest has gone up from Rs 52 lacs to Rs 62 lacs. The interest numbers not going up too much suggests that the growth is not burdened by debt.

    If you look at the 1st quarter numbers they seem to vindicate that the company is clearly on a growth path.

    (June 2010 results). Don't think these would need any further analyses.

    Now what has the market done to its share price for all this announcement.

    The price has plunged from Rs 48 odd levels in January 2010 to about Rs 13.
    This means a PE of about 2 and a market cap of about Rs 14.5 odd crores based on June 2010 shareholding pattern. (1.1 crore shares X Rs 13)

    So what next is in store for us. The following news flows could give some pointers to the future prospects of the company.

    a) Meger of privately held Kerala Sponge with itself
    b) Own power generation through waste heat recovery in the steel plant as well as coal based plants.
    c) Purchase of company in Gujarat. (Management interview)
    Some digging on the name of the target company revealed the name Newtech Forge & Foundry Limited. (Source link) - DealCurry.
    You can check out the website of the target company on this link. (Newtech)

    What does all of this mean?
    a) The company is integrating both backward and forward and this am sure will be reflected in the financial performance in future.
    b) It is also alive to the opportunity that generation of power presents in current times.
    c) The forward integration is infact even more interesting when the product portfolio of Newtech is looked at.
    Did someone mention getting into auto parts manufacturing? Well if the entire company is being acquired then that is what is going to happen.

    The board meeting on 7th April 2010 gives us some insights into how all this expansion will be funded. (Link)
    You can imagine the scale of expansion.

    The company has just recently concluded a GDR issue of about 3.23 crore shares.

    Some of you all must be worried by now about the extent of promoter contribution. Yes, you are right it is quite low. Its about 20% and has remained constant all these years. Frankly, I dont know why it is so low. But my hunch is that in future with the merger of Kerala Sponge the promoters share should go up as Kerala sponge is a privately owned company. Secondly I think the fall in share price could also be because the management wants to mop up shares at a low price.

    Now the interesting bit. On 27th of May 2010 1 crore warrants were issued to non promoters at Rs 32 per share (Rs 10 face value + Rs 22 premium). (Share warrant issue)

    I have started investing. Do let me know if you think I have got it wrong somewhere.

    Till then happy investing.


  5. Raju bhai happy Ganesh chatuedashi to you and all group member
    no one beat u to choose a multibagger in any type of market you are a God father of all invester
    i choose these 5 scrip which look currently very bullish
    rajubhai your view please

    1 MICRO TECH 532494 @ 213.5

    2 SIMPLEX CASTING 513472 @ 117.65

    3 RATHI ISPAT 504903 @ 25

    4 WELSUN SYNTEX 508933 @ 18.65
    5 BAJAJ HINDUSTAN @118.00
    (some insider news bajaj hindustan up 30% from cmp till deewali

  6. ashok,
    I had already gave my pick in sugar sector.Thiru Arrooran Sugar.
    Tum 30% return ki bat kar rahe ho aur main 300% return ki sochta hun......tell me, mera aur tumhara koi mel ho sakta hai?

  7. Ravi,
    I still feel that Ratrhi Steel and Power is much much better option then investing in Southern Ispat and Energy.
    1)Promoters stake in Southern Ispat is just 20% while in Rathi steel, it is constantly increasing and now at over 50%....means it says that promo are upbeat in theirCo.
    2)Rathi Steel is already having a sales of 775 cr and comparing to Mcap which is 72 cr, it looks extremly stunning valuation to just go ahead and buy....
    3)As the author himself confess that he do not know why the promoters stake is so low and even not come up.....that gives all the answers to us....
    Well, even after reading the article I willnot invest in Southern Ispat.
    Try to compare the parametres with Rathi Steel and Power and decide yourself....that's all I will say....
    Do as per your conviction....I can prove wrong in my analysis....let better council prevails...
    Let me tell you one thing.Send them Rathi Steel and Power information....and tell him what to buy....either Southern Ispat or Rathi Steel....!He must not have got to chance upon Rathi Steel otherwise he would have written on Rathi Steel instead of Southern Ispat...
    Ravi,remember one thing always....when you wants to buy a stock of same sector,try to compare it with which stocks you have got and see which is better....and then go for it...Those who wrote about Southern Ispat may not at allbe knowing about Rathi Steel and Power...

  8. Hi Rajeev, what is your opinion on investing in loss-making companies or those which have gone into BIFR? Say, GPPL is a loss maker and Artson is just out of BIFR (I bought both).
    What are the signs we should look for in such cases, because not all loss-makers or BIFR referred firms would be good picks? Need a small tutorial here...

  9. JC, these are the things u will have to learn ur self.It is hard to explain all things here and as I said sometimes, intution plays an important role in picking such learn with experiance...pick up 4-5 stocks in that category and analyse them and then predict what will and can happen to them...and then see the results ....month after month or year after year.Because sometimes, after coming out of BIFR also Co takes more time to flourish....

  10. Rajeev,
    I have invested in Rathi. Now that they have given a dividend, and as this is my first dividend will i get the dividend in cheque to my address or be electronically transferred to my shares account? Sorry for the novice question!

  11. Happy to see a stock quoting at Rs 20-25 paying out dividend!