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Tuesday, June 15, 2010

Parabolic Drugs IPO Analysis

The initial public offering of Chandigarh based manufacturer of APIs and API intermediates, Parabolic Drugs has opened for subscription on Monday.

Incorporated in 1996, Parabolic Drugs Limited is in the business of manufacturing Active Pharmaceutical Ingredients (API's) and API intermediates. APIs, also known as 'bulk drugs' or 'bulk actives' are the principal ingredient used in making finished dosages in the form of capsules, tablets, liquid, or other forms of dosage, with the addition of other APIs or inactive ingredients.

Issue Open: June 14, 2010
Issue close: June 17, 2010
Price Band: Rs. 75 - Rs. 85 Per Equity Share
Minimum Bid Size: 80 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% BOOK BUILDING
Maximum Subscription Amount for Retail Investor: Rs. 100000

IPO Grading / Rating:
CARE has assigned 'CARE IPO Grade 2' to the proposed Intial Public Offer(IPO) of Parabolic Drugs Ltd.(PDL). CARE IPO Grade 2 indicates 'Below Average Fundamentals'. Brickwork Ratings (BWR) has assigned 'BWR IPO Grade 3' to the proposed IPO of Parabolic Drugs Ltd.(PDL). Brickwork Ratings BWR IPO Grade 3 indicates 'average fundamentals'.

The IPO is at price band of Rs 75-85 per share. This converts into P/E multiple of 15.42-17.47 at post issue annualized EPS of Rs 4.86. As its business strategies, the company will be looking after increasing penetration into international market, expanding in the CRAMS segment, diversifying product portfolio and expanding into the non-antibiotic segment.

If you look at IPO valuations, issue looks overpriced at present level. Hence it is recommended to investor to not to invest in IPO and avoid it.

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