The Issue : INDIA BULLS POWER LIMITED proposes to issue 33,98,00,000 shares of Rs 10/ each with a green shoe option of 5,09,00,000 aggregating to 39,07,00,000 in the price band of Rs 40 -45 . The company intends to garner around Rs 1700 cores from the issue. The issue is slated to open on 12-10 -09.
Promoters: The project is promoted by IBREL. Foreign investors FIM limited and LMN India internet ventures limited hold17.9 and 10.7 percent respectively.
The project: To set up power generating units with total capacity of 6600MW in different states. Although 16 Banks /institutions have committed funds to the extent of Rs 6,525.00 crores for the project, no Bank or Institution has independently appraised the project.
Industry/Competition: Highly competitive capital intensive industry. The promoters have no experience in the power generation business.
Other points to note: The Company is yet to obtain some clearances. For Chattisgarh project the land is yet to be acquired. First unit to be commissioned in June 2012. Heavily indebted company. The promoters have acquired 118, 50, 00,000 shares at an average cost of Rs 5/.
IPO grading: The rating agency CRISIL has assigned Grade 3 indicating average fundamentals.
The company has no business track record. Hence share premium of Rs30-35/ is not justified.
Recommendations: Considering the inexperience of the promoters, long gestation period and heavy indebtedness, investors may avoid subscription.
did not aplly to the issue.
ReplyDelete