Wednesday, April 21, 2010
Issue opens on - 21th April 2010, Wednesday
Issue closes on - 23th April 2010, Friday
QIB Book - 30,25,000 shares (50% of Net issue)
HNI Book - 9,07,500shares (15% of Net issue)
Retail Book - 21,17,500 shares (35% of Net issue)
Total No. of Shares offered - 60,50,000 shares or 25.09%
Equity Shares outstanding after the Issue - 2,41,15,672 Eq Sh
Equity Shares outstanding prior Issue - 1,80,65,672 Eq Sh
Total Size of the Issue- Rs. 74.42 Crs. - Rs. 77.44 Crs.
Talwalkars Better Value Pvt Ltd (TBVF) - Commonly famous as Talwalkars, is India’s largest chain of health centers. The company established in 1932, it operates 58 health clubs in 28 cities, serves 55,000 clients in India.Hence demands premium. Talwalkars were the Official Fitness Partners for Standard Chartered Mumbai Marathon in 2008 and 2009 and Femina Miss India Contest in 2009.
The proceeds will be used for setting up of 27 additional health clubs about Rs.50.22 cr and repaying certain unsecured loans of Rs. 20.59 cr. The issue will constitute 25.09% of the fully diluted post issue paid-up capital of the company. Promoters’ stake will be reduced to 59.39% and non-promoters to 15.42% post issue.
At upper band of Rs.128 the stock is available at 53.9x the P/E & 2.6x the P/Bv based on FY10 post issue EPS of Rs.2.4 & BVPS of Rs 48.6. For the year ended on 31st March 2009 company reported PAT of Rs.5.687cr on total income of Rs.59.424 crs, For the period ended in April-September 2009 ,Company posted PAT of Rs.31.90 cr on the total income of Rs. 358.82 cr.
CARE has assigned an IPO Grade 3 to Talwalkars Better Value Fitness Ltd IPO. This means as per CARE company has 'Average Fundamentals'. CARE assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.
TBVF IS AT EXPENSIVE VALUATION: BUT GOOD BUSINESS
The company has set a price band of Rs 123 to Rs 128 per equity share of Rs 10 face value. At the lower band of Rs 123 per share, the P/E would be 51.6 times the annualized EPS of Rs 2.4 for the nine months ended December 2009 (on post-IPO equity) and 82 times the EPS of Rs 1.5 (on post-IPO equity) for FY09. At the upper price band of Rs 128 per share, the P/E would be 54 times the annualized EPS for the nine months ended December 2009 and 85 times the EPS for FY09. There is no comparable listed company. The very high valuation already factors in very high growth rates in future.
Friday, April 2, 2010
There was a small village, everyone there were living happily, one day someone from the big city came with his assistant, he announced that - "I will give Rs. 10 each for every monkey you catch and bring it to me", now the villagers started catching monkeys, soon villagers found a new job. They caught monkeys and sold to that stranger & made good money, after a short while villagers lost their interest. The stranger again announced that - "I will give you Rs. 15 each for every monkey", more monkeys came in, after a while the price of monkey went up to Rs. 60 !!! Suddenly one day the stranger was out of the village & his assistant said - "Look this guy does not pays me much, I want to sell all his monkeys at Rs. 50 each so when he comes back you can sell it back to him for Rs. 70" - the villagers agreed -The assistant sold all the monkeys to the villagers for Rs. 50 and went out of the village. Villagers were now left with their monkeys & still waiting........for the Stranger and his assistant to come... but none of this two came back & left villagers with their monkeys worth nothing...while that strangers made money out of nothing....
THE MORALE OF THE STORY -
The villagers are we small Investors , our stocks are the monkeys and FII’s (Foreign Institutional Investors) are those strangers !!!
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