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Saturday, November 10, 2007
Gokul Refoils IPO
Gokul Refoils And Solvent Limited, a Gujarat based company, engaged in the business of solvent extraction, refining of Edible oils and Vanaspati manufacturing, proposes to raise Rs15bn with an Initial Public Offer (IPO).
The Objects of this issue are to set up a new 1500 TPD Soyabean processing plant near Gandhidham, expansion of its existing edible oil refinery at Surat, investment in its wholly owned Singapore subsidiary, funding part of its long term working capital, brand building activities, investment in increasing warehousing capacities and continuous Capex for existing units, general corporate purposes and public issue expenses.
Gokul Refoil started its business in 1982 and is primarily engaged in the business of Solvent Extraction, refining of Edible oils and Vanaspati manufacturing. The group's interest also includes power generation, commodity trading in the domestic and international markets.
The company markets its products under the brand name "Gokul" in the states of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh and Punjab. The brand enjoys a national recognition and the products are packed and sold include Mustard oil, Sunflower oil, Groundnut oil, Cottonseed oil, Palmolein oil, Vanaspati oil and Soya bean oil these are not only sold in in bulk quantities but also consumer retail packs of 15 Kgs, 15 Litre, 10 Litre, 5 Litre, 1 Litre and 500 ml.
Pan India distribution network spread across 19 States catered by 18 C&F agents and 802 distributors, 3 depots, 15 brokers and 295 resellers, distributing Gokul products through a total 1133 bulk points.
Gokul Refoils has setup a Solvent Extraction plant and an oil refinery at Sidhpur, Gujarat, a refinery of 800 TPD and Vanaspati plant of 100 TPD at Gandhidham, four environment friendly wind mills of 1.25 MW each in Kutch for captive power consumption and a 100 TPD operational refinery in Surat. It has also set up a co-generation power plant of 500 KWH at its Gandhidham unit. At present the company has 680 TPD of seed processing, 600 TPD of Solvent Extraction, 1200 TPD of refining and 200 TPD of Vanaspati manufacturing.
Towards expanding the scale of operations and having global presence Gokul Refoils has setup two wholly owned subsidiaries in Mauritius and Singapore under the name Maurigo Pte Limited and propose to invest approximately Rs250mn i.e. US$ ~6.10mn for enhancing the resources of the subsidiary.
Commenting on company's global expansion plans, Kanubhai Thakkar, MD, Gokul Refoils and Solvent limited said, “Singapore is the global hub of edible oil industry with all major oil suppliers having a base in Singapore. Currently we are sourcing about 1, 50,000 MT of Palm oil from Malaysia and Indonesia and 1, 00,000 MT of soyabean oil from Argentina and Brazil. If we have our presence in Singapore, we shall be in a position to negotiate locally and deal with the small and fragmented oil suppliers of Malaysia and Indonesia, which will further enable us to procure the raw materials at reasonable terms."
“Setting up of this office was a part of our long term strategy of increasing our foot print in the global markets to reduce the involvement of intermediaries and source raw materials from the producers. It will help us in procuring oil at reasonable terms and also providing assured supplies round the year. This global presence shall help us to improve the scope of exports of De-Oiled Cake and our margins in export of de-oiled cake," Said Thakkar.
Gokul Refoils consolidated total income for the financial years / period ended July 31, 2007, March 31, 2007, 2006 and 2005 was Rs6.57bn, Rs15.66bn, Rs12.55bn and Rs9.07bn respectively. The Company posted net profit for the said years / period was Rs207mn, Rs254.2mn, Rs123.4mn and Rs200.5mn respectively.
DOW slides again
Both the major US indices declined on Firday on worries over the tech sector and concerns on subprime losses.
While the Dow dropped 223 points to 13,043, the Nasdaq Composite was down 68 points at 2,628. For the week, the Dow dropped over 4% and the Nasdaq Composite Index declined 6.5% - its biggest weekly loss since 9/11.
Indian ADRs, too, declined on Friday. ICICI Bank plunged over 7% to $60.24. HDFC Bank, Tata Motors, Infosys and Wipro also declined.
Analysts' Picks
PTC
CMP: Rs 152.40
TARGET PRICE: Rs 99
HSBC Securities has downgraded its rating on PTC India to ‘underweight’ from overweight, but maintained its target price of Rs 99 for the stock. “The stock has had a strong run of 75% appreciation over the last month and is now trading at 42.7 times FY08e(estimated) earnings, which is substantially higher than the Chinese and Indian utilities average of 22.1 times. We believe it is fully priced for the next 12 months and the time has come to book profits,” the HSBC note to clients said.“Since we believe in its long term growth story on the back of higher visibility of implementation of its power projects, we maintain our forecasts for net profit CAGR at 54% over the next five years. We have not factored any future investment or dilution of equity into our forecasts,” the note added.
Oriental Bank
CMP: Rs 233.65
TARGET PRICE: Rs 280
Merrill Lynch has retained its ‘buy’ rating on Oriental Bank of Commerce with a price target of Rs 280 despite weak earnings for July September. “While core earnings have disappointed in 2Q(July-September), we maintain our buy given the low valuations (0.9 times FY09E book value with 15% return on equity) and the fact that it is one of the few banks that is providing for AS-15, giving it some buffer to its earnings. We believe OBC currently trading at 1.0 time FY08E book, could trade up to 1.1 times FY09E adjusted book given the forecast rise in ROE to +15% in FY09E on back of improving NII (net interest income, rising fee income and lower NPL (non performing loan) provisions,” the Merrill Lynch note to clients said.
IVRCL Infra
CMP: Rs 521.15
TARGET PRICE: Rs 601
ABN Amro has initiated coverage on IVRCL Infrastructures & Projects with a ‘buy’ rating and a sum-of-the-parts based target price of Rs 601.“We believe IVRCL will be a key beneficiary of the government's plans to develop the agriculture sector by increasing irrigation facilities. IVRCL’s diversification into power distribution (18% of sales) and roads should balance its product mix, as these segments are growing exponentially due to private participation,” the ABN Amro note to clients said. Adjusting for subsidiary value of Rs 158.1 per share at 15% holding company discount, the stock trades at 17.3 times FY09F (forecast) diluted EPS of Rs 24.8, the lowest among tier-2 construction companies.
Samvat 2064 a whimper
The Samvat year 2064 began on a weak note as Sensex plunged by 151 points in the special Diwali muhurat trading on the Bombay Stock Exchange today due to the heavy profit sellings by funds.
The Sensex, which fell by about 917 points or 4.59 per cent in the last four trading sessions, fell further by 151.33 points at 18,907.60 in the muhurat trading on the first day of Hindi calender year Samvat. It witnessed the day's high of 19,329.57 and a low of 18,737.22 points.
Similarly, the broad-based National Stock Exchange index Nifty fell by 35.50 points at 5663.25, after touching a high of 5794.20 and a low of 5614.90 points.
Visa files for $10 billion IPO
Visa Inc, the world's largest credit card network, filed with regulators on Friday to raise up to $10 billion in an initial public offering, in one of the largest and most eagerly awaited US stock offerings.
Visa announced the offering two days after agreeing to pay $2.1 billion to settle a three-year-old antitrust lawsuit with rival American Express Co.
The card network did not reveal in its registration statement filed with the US Securities and Exchange Commission when it plans to go public, how many shares it plans to offer, or the expected share price.
San Francisco-based Visa outlined plans in October 2006 to float a majority of the network, which is now owned by its 13,400 member banks, and at the time said it hoped to go public within 12 to 18 months.
On Wednesday, it agreed to settle a 2004 lawsuit that American Express filed against Visa, the smaller MasterCard Inc and eight banks charging them with anti-competitive practices.
The new publicly traded entity, Visa Inc, will combine Visa's US, international and Canadian operations. Another affiliate. Visa Europe, will remain a membership organization and take a minority stake in Visa Inc.
Visa has said it plans to use IPO proceeds to fund expansion and an escrow account to help cover legal bills. The network and MasterCard face a variety of antitrust lawsuits from rivals and retailers, some of which accuse them of price fixing.
Visa's roots date to 1958 when a Bank of America Corp predecessor created the blue, white and gold BankAmericard, helping pave the way for the modern credit card business. That card has evolved into Visa.
MasterCard went public in May 2006 in a $2.4 billion IPO and its shares have since risen roughly five-fold.
Morgan Stanley spun off its Discover Financial Services, but those shares have fallen by about one-third.
Visa said Bank of America Securities, Citi, Goldman Sachs & Co, HSBC Securities USA Inc, JPMorgan, Merrill Lynch & Co, UBS Investment Bank and Wachovia Securities are joint book-runners for the IPO.
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