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Sunday, August 14, 2011

IPO Analysis - Brooks Laboratories Ltd

Brooks Laboratories Ltd is coming up with an Initial Public Offer (IPO) to raise RS.63 crores for expansion plans.

Issue Open: August 16, 2011
Issue close: August 18, 2011
Price Band: Rs. 90 - Rs. 100 Per Equity Share
Minimum Bid Size: 60 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% Book Building
Maximum Subscription Amount for Retail Investor: Rs. 200000

Brooks Laboratories Ltd was incorporated in 2002 and is in the business of Pharmaceutical Contract Research & Manufacturing. Company manufactures wide range of products catering to critical care segment in Parental Section like Beta Lactam, Cephalosporin & General Dry powder Injectables, Ampoules and Liquid vials, Dry Syrups and Tablets etc.

Brooks laboratories plans to set up a new manufacturing unit in Panoli, Gujarat for manufacturing various pharmaceuticals formulations to the tune of Rs 51.8 crore. It needs Rs 5 crore for long-term working capital.

IPO Grading / Rating:
ICRA has assigned an IPO Grade 2 to Brooks Laboratories IPO. This means as per ICRA, company has 'Below Average Fundamentals'.

Looking at the ICRA rating of Below average fundamentals, it is certainly not advisable to buy IPO in current volatile stock markets. If the L&T IPO with very good valuations can enter stock markets at 4% lower price than it's IPO price, companies with not so strong fundamentals would hardly have any chances of gains.

It would be better to see the listing and performance in secondary market, fundamentals after listing and then decide on investing in it.

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