Two listings, both at discount

about 5 months ago
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Chemplast Sanmar got listed on the BSE at Rs.525 v/s IPO price of Rs.541, a 3% discount. The stock price went up briefly to Rs.550 but soon sagged under listing selling.  

The issue was met with a muted response; it was subscribed 2.17 times.

In our IPO Analysis we had concluded, “Let the group leverage be addressed before taking any fundamental business view. Besides, valuation also doesn’t leave anything on the table. Hence, the IPO is not recommended.”

The other listing was of Aptus Value – it got listed at Rs.329.95 v/s IPO price of Rs.353; it rose to Rs.348.80, its intraday day high-point currently, which still remains well below the IPO price.

The IPO was subscribed 17.2 times.

In our IPO Analysis conclusion, we had said, “ While Aptus’ founder pedigree (ex-Cholamandalam) is good, along with post-IPO holding of 24% and another 35% with investor-promoter Westbridge, valuation of 7x post-money PBV is sky-rocketing, especially since loan book stress will not decline overnight. Preferring asset quality over growth, we do not advise applying in expensively-priced IPO of Aptus Value Housing Finance.”

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