Chemcel Biotech is entering the capital market on 9th September 08, with a public issue of 1.54 crore equity shares of Rs.10 each at a premium of Rs.6 per share, with total issue price of Rs.16 per share, aggregating Rs.24.64 crores.
The company is a pesticide formulator manufacturing pesticides for crops like paddy, cotton and sugarcane and had a total income of Rs.25 crores for FY 08 with PAT of Rs.1.20 crores, resulting in an EPS of less than 50 paise.
It is learnt that the company has managed to get its IPO subscribed from closed sources and the said source or operator is from a nearby hill station of Mumbai. The stock is likely to witness huge momentum post listing, and it will help the said operator to jack up the price of the stock after listing, if it does not receive any public response. So, interested to have negative analysis and rating on the stock.
Rightly so, the stock has no fundamentals at all. The company is entering into bio-diesel field but nothing seems to be attractive. The huge equity base of Rs.26 crores would be a big dampner. But who cares for all these, if you have some different motive!
Nothing attractive in the stock while having necessary momentum and speculative ingredients in it. Those who have inclination to ride the momentum may get attracted towards the issue.
A very risky proposition and hazardous to the health of primary market.