Wonderla Holidays - IPO

Wonderla Holidays is one of the largest operators of amusement parks in India. It owns and operates two amusement parks under the brand name, ‘Wonderla', one at Kochi and the other in Bangalore. It is in the process of setting up third amusement park in Hyderabad. It also owns and operates a resort beside its amusement park in Bangalore under the brand name, ‘Wonderla Resort', which has been operational since March 2012.

The amusement parks offer a wide range of water and land based attractions catering to all age groups. It has 22 water-based attractions and 34 land-based attractions at Wonderla Kochi, situated on 92.95 acres of land and 20 water-based attractions and 33 land-based attractions at Wonderla Bangalore, situated on 81.75 acres of land. It recorded total footfalls of 23.40 lakh million in fiscal ended March 2013 (FY 2013) and 17.50 lakh in the nine-month period ended December 2013 across its two amusement parks at Kochi and in Bangalore. The total footfalls across the two amusement parks have grown at a CAGR of 7.42% from FY 2011 to FY 2013.

Wonderla Resort, is a three-star leisure resort located beside its amusement park in Bangalore, comprising 84 luxury rooms, with amenities including banquet halls, a board room, conference rooms, a multi-cuisine restaurant, a solar heated swimming pool, recreation area, kids' activity center, and a well equipped gym.

The company is coming out with an IPO for setting up its proposed amusement park in Hyderabad. The initial public offering comprises 1.45 crore of equity shares of Rs 10 each in a price band of Rs 115-125. At the lower price band, about Rs 166.75 crore will be raised, and at the higher price band, about Rs 181.25 crore.

The company intends to finance the setting up of the amusement park, Wonderla Hyderabad, through debt finance and from IPO proceeds. For setting up the proposed amusement park in the Ranga Reddy district of Andhra Pradesh, the company has acquired 49.57 acres of land, which has been mutated in the name of the company and has been converted from agricultural to non-agricultural land use. The company intends to deploy Rs 173.30 crore for setting up the amusement park from the Net Proceeds. It has also been sanctioned a loan of Rs 50 crore by the State Bank of Travancore for part financing of the amusement park project. It has utilized Rs 5 crore of debt for the project. The management confirmed that the amusement park to be operational by FY 2016

The promoter, Kochouseph Chittilappilly, in 1996 had incorporated V-Guard Industries, which is listed on the BSE and the NSE since 2008.

Strengths

India's increasing discretionary spending on the one hand and a large young population on the other work are in favour of the amusement park industry in general and Wonderla holidays in particular.

The proposed third amusement park in Hyderabad will be advantageous as Hyderabad is India's sixth largest city, with a population of about 7 million. Good infrastructure has encouraged the setting up of biotechnology, pharmaceuticals, IT and ITeS industries in the city. These industries typically attract a large number of young professionals.

Wonderla develops amusement rides in-house, which helps to maintain low cost. It has constructed 42 rides for its amusement parks till date. This has helped the company to reduce capex incurred on the rides. The cost of a ride manufactured in-house is one-third of the cost of procuring the ride externally. This has also equipped the company with in-house maintenance capabilities, thereby reducing the cost of maintenance and downtime for a ride.

The business is capital intensive and also requires large parcels of land, which are not easily available at good location. Wonderla has excess lands in Kochi (93 acres out of which utilized land is just 27 acres) and Bangalore (81.75 acres out of which utilized land is just around 40 acres), which will help in expansion in these locations without large investments.

Weaknesses

The company is involved in two litigations pertaining to 14.70 acres of land acquired in connection with Wonderla Hyderabad.

The company's business is seasonal with the maximum footfalls on weekends and during school vacations. The April to June quarter (summer vacations) and the October to December quarter (holiday season) are typically the peak quarters accounting for 35% and 25% of revenue, respectively.

Fall in level of discretionary spending due to any economic downturn, communal and terrorist events, political unrest or outbreak of contagious diseases will negatively impact the company.

Any major accident or mishap at any of its parks can not only affect the performance but also the reputation of the company.

Amusement parks are extremely land-intensive as large parks require around 40-50 acres with some of the current mega projects going up to 300 acres. Its inability to find locations to open and operate new amusement parks on commercially viable terms and successfully acquire the requisite land could adversely affect its future expansion plans

South India is prone to electricity cuts. Unavailability of adequate and uninterrupted supply of electrical power and water at a reasonable cost will hamper the company's operations.

Valuation

Net sales were Rs 137.95 crore and PAT Rs 33.48 crore in FY 2013. On fully diluted post-IPO equity share capital of Rs 56.50 crore, EPS for FY 2013 was Rs 5.9. Net sales stood at Rs 119.69 crore and PAT at Rs 30.99 crore for the nine months ended December 2013. Due to seasonality of business and the fact that the best two quarters have already passed (the company gets 35% of its total sales in Q1 and 27% in Q3 and the rest is equally spread between remaining quarters), it is very much likely that the actual EPS that the company will report for FY 2014 will be lower than the annualized EPS for the nine months ended December 2013. Thus we are not annualizing EPS for the nine months ended 2013. At the lower price band of Rs 115 and higher price band of Rs 125, the offer price discounts FY 2013 earning 19.4 times and 21.1 times, respectively. Though there is no listed company in the similar line of business, offer P/E close to 20 is steep.

PC Jeweller

PC Jeweller, promoted by Padam Chand Gupta and Balram Garg, is one of the leading jewellery companies in India in the organized jewellery retail sector. The company's operation includes manufacturing, retail and export of jewellery. It offers gold jewellery, diamond jewellery and other jewellery including silver articles, with a focus on diamond jewellery and jewellery for weddings. As of September 30, 2012, the company had 30 showrooms under the "PC Jeweller" brand located across 23 cities in north and central India with an aggregate area of approximately 1,64,572 sq.ft. All of these showrooms are operated and managed by the company, with the exception of Chandigarh showroom, which is operated and managed by a third party. The company has developed a strong brand in markets of north and central India. It also sells gold and diamond jewellery through online sales. It also exports gold and diamond jewellery on a wholesale basis to international distributors in Dubai and Hong Kong.

CARE IPO Review

CARE IPO Review

CARE, PC Jeweller, Bharti Infratel

 CARE, PC Jeweller, Bharti Infratel

Bharti Infratel IPO

 Bharti Infratel IPO

PC Jeweller IPO

 PC Jeweller IPO

CARE IPO Analysis

Credit Analysis and Research (Care) is the 2nd largest rating company in India by rating turnover. Promoted by major banks and financial institutions, its three largest shareholders are IDBI Bank, Canara bank and SBI. The company's main product is rating of debt instruments and bank loan facilities. With rating relationship with 4,644 clients, Care has significant rating coverage of Indian banks and financial institutions. Apart from rating, the company also provides specialized grading services including IPO grading, equity grading and grading various types of enterprises including energy service companies, renewable energy service companies, shipyards, maritime training institutes, construction companies, rating of real estate projects etc. The company has graded the largest number of IPOs since the introduction of IPO grading started in India.

Bharti Infratel IPO Analysis

Bharti Infratel's main business is to acquire, build, own and operate towers and related infrastructure and to provide access of its towers to wireless telecommunications service providers on a shared basis under long-term contracts. The company has 34,220 own towers in 11 telecom circles and 42% equity interest in Indus, which has about 1,10,561 towers in 15 telecom circles. Thus, on a consolidated basis the company operated in 22 telecom circles, with economic interest in 80,656 towers, in India end September 2012, making it one of the largest tower infrastructure providers in India. Bharti Airtel holds 86.1% stake in Bharti Infratel. Post IPO, the stake of the parent, which accounts for about 63% of the consolidated revenue, will come down to 79%. Bharti Airtel is not offloading any stake through the current offer for sale.

Tara Jewels IPO Analysis

CM RATING 38/100 Tara Jewels is promoted by first-generation entrepreneur Rajeev Sheth. The company is predominately an exporter of studded diamond jewellery, which constituted about 81% of total turnover as on March 2012 But to tap the growing domestic mid-income segment, Tara set up its first retail showroom in October 2008. Currently the company has net 29 stores spread over area of about 29,950 sq feet across suburban areas of metros, mini metros and cities with higher concentration of the mid-income segment. Each store is around 1,000 sq feet, carrying about Rs 2.5 crore worth of inventory of fashion jewellary. Tara plans to open about 20 new stores across west India, central India and the NCR region in India by March 2013.

VKS Projects IPO Analysis

Relatively Small business seeking high price VKS Projects is engaged in the business of undertaking EPC/turnkey/item-rate contract for mechanical, piping and heavy equipment erections for various industrial and infrastructure projects. Of late the company is also forayed into land development for industrial/infra projects. The company originally promoted by V K Sukumaran and K Unnikrshnan was incorporated in Feb 17, 1998 as a private company in the name of Chaitanya Contractors & Engineers. Subsequent to transfer of shares held by Unnikrishan and family to Saritha Sukumaran, the wife of V K Sukumaran in 2005, the name of the company changed to VKS Projects in August 31, 2007. Latter in Nov 3, 2010 the company has turned into limited liability company.

Speciality Restaurants IPO Analysis

Speciality Restaurants, promoted by Mr. Anjan Chtterjee and Suchanda Chatterjee, is a fine dining operator with 49 Company owned and operated restaurants, 20 Franchisee and 13 confectionary outlets spread across 20 cities in India and one in Bangladesh. The promoters had launched the network in 1992 under the name Only Fish (later renamed to Oh! Calcutta). First Mainland China restaurant was launched in 1994. Most of tits restaurants located in Metros and Tier 1 cities and it continues to expand its operations in these places and opportunistically in Tier II cities. In future it seeks to expand mainly through ownership and opportunistically through franchising on a Franchisee Owned Company Operated (FOCO) model across India as well as certain international destinations. The FOCO model allows it to enter and operate in markets, which it may not otherwise exploit particularly in to the Tier II cities. Also, the majority of its restaurants are located in western India, which has the highest proportion of people dining out regularly. The Company's flagship brand Mainland China serves Chinese cuisine in a standalone fine dining setting. Chinese is one of most popular foreign cuisines in India. The Company has 36 Mainland China restaurants across India as well as one in Bangladesh. Notably, the revenues contribution from Mainland China is steadily improving from 53.27% in FY'09 to 61.23% in FY'11. It believes that maintaining and enhancing the Mainland China brand is important for maintaining competitive advantage. Also, the brand Oh! Calcutta encompassed seven restaurants across India as well one in Bangladesh. This brand features a range of cuisines from the east India city of kolkata, including the Bengali, Nawabi, British and continental cuisines served in a fine dining setting. The other restaurant brands it owns are Sigree, Flame & Grill, Haka, Just Biryani, KIBBEH, Kix, Machaan, Shack as well the confectionary brand Sweet Bengal. It has consistently improved its revenues and earnings with expanding network of restaurants. The Company increased owned and operated 30 restaurants as on 31st March 2008 to 45 as of 31st March 2011 and further to 49 as of February 29th 2012. Also, the franchise based restaurants from one as of 31st March 2008 increased to 18 as of 31st March 2011 and further to 20 as of February 29th 2011. The revenues increased by 34% to Rs 173.16 crore in FY'11. The Revenue split across the brands in FY'11 was: Mainland China (60.3%) followed by the Oh! Calcutta (12.3%), Sigree (9.5%), Flame & Gril (5.1%), Machaan (4.1%), Haka (3.8%) and others (4.9%). The restaurants in western India has contributed 39% of revenues in FY'11 and 41% of revenues for the nine months ended December 2011. Also, number of guests served were at 2.59 million for FY'11 and 2.09 million in nine months ended December 2011 with an average 7313 and 8127 guests per day respectively. The major portion of proceeds (around Rs 131.60 crore) is proposed to be utilized for opening of 45 New Restaurants for next three fiscal years FY'13, FY'14 and FY'15. Of this, Rs 92.27 crore is planned to be spent towards interior and equipment costs. In addition, Rs 15.1 crore is proposed to be utilised for the development of food plaza in Rajarhat, kolkata, West Bengal. Going forward, The company plans to maintain a tight basket of brands with a focus on Mainland China brand, while targeting a few new market segments. It may introduce new products to adapt to dining trends, shifts in guest spending and tastes and nutrition preferences. Strengths: It has well recognized brands Mainland China and Oh! Calcutta brands with experience of over 17 years. Diversified business model with Mainland China (offers authentic Chinese cuisine), Oh! Calcutta (diverse traditional cuisines), Sigree (authentic Indian cuisine), Flames&Grill (serves Kebabs), Machaan (traditional Indian dishes & children dishes) etc. "Asset light model" as all the restaurant properties are leased. The strong process established over the past 12 years for the quality control, brand standards, operations monitoring and food and service audits. Presence in key strategic locations Weaknesses: The fine dining sector of the restaurant industry is highly fragmented and competitive. The slowdown in the economy could impact the business. Rising property rentals Valuation: Over the last three years (FY08-11), the company's revenues have increased at a CAGR of 27% and reported net profit at a CAGR of 47%. The revenues increased by 34% to Rs 173.16 crore in FY'11. OPM increased to 22% (improved by 150 bps YoY). Accordingly there was robust 44% growth in operating profit to Rs 38.15 crore. There was sharp rise in other income (100%) and marginal decline in interest cost (3%), partly offset by the increase in depreciation (25%). Eventually, PBT grew by 69% to Rs 24.08 crore. After the rise in effective tax rate by 130 bps to 33.5%, there was 66% growth in PAT to Rs 16.02 crore. After adjusting for prior period items, adjusted PAT increased 40% to Rs 15.63 crore. For the nine months ended December 2011, Revenues stood at Rs 149.70 crore with OPM of 20.9%, PAT was Rs 15.02 crore for the same period. At the issue price of Rs 146-155, the P/E works out 43-45 times the FY'11 EPS Rs 3.4 (on post-IPO equity). There is no comparable listed player focused on fine dining. However fine dining is part of Food Service sector of which Jubilant Foodworks is a listed player trading at FY 2011 P/E of 103. Jubilant Food's brand, business model and prospects are more robust than that of Speciality Restaurants. Due to rising urbanization and nuclear families, growing young population, growing number of working women, increasing preference for dining out/ eating outside food and changing food habits away from traditional food, the Food service sector offers excellent growth potential. But there is scarcity of listed stocks in this sector. Hence valuations of such stocks will remain high.

Tribhovandas Bhimji Zaveri IPO Analysis

With a track record of 145 years, Tribhovandas Bhimji Zaveri (TBZL) is a well-known and trusted jewellery retailer in India, particularly in Maharashtra. Started as a partnership firm initially, it became public limited company in July 2007. Currently, it has three promoters: Shrikant Zaveri, Binaisha Zaveri and Raashi Zaveri. Having registered office at Zaveri Bazaar, famously known for the gold jewellery business in the Indian financial hub, Mumbai, the company mainly sells gold and diamond-studded jewellery along with other products like platinum and Jadau jewellery across its showrooms. To cater to the changing taste across regions, it offers wide variety of jewellery from regions across India and also offers jewellery from various parts of world such as Italy, Turkey and Thailand. The company retails its jewellery through 14 showrooms with total carpet area of 48,818 sq ft, in 10 cities. Of the 14 show rooms, 11 are large format high street show rooms with carpet area of 3,000 sq ft and more and the remaining three are small format high street showrooms with carpet area of 1,000-3,000 sq ft. Currently, the company has six showrooms in Maharashtra, three in Andhra Pradesh, three in Gujarat, and one each in Kerala and Madhya Pradesh. Twelve out of 14 show rooms are under lease. Gold jewellery is the major contributor to revenue. In the nine months of fiscal ended March 2012 (9M of FY2012), gold jewellery constituted 72.48% of the total revenue. As a strategy to improve the margin, the company plans to increase share of diamond jewellery revenues in total revenue. The share of diamond- studded jewellery in total revenue increased from 21.62% in FY 2010 to 22.08% in FY 2011 and to 25.20% in 9M of FY2012. With the increase in scale of operations through expansion of retail outlets, the profitability has improved substantially in the past three years. The net profit margin has doubled from a mere 1.7% in FY 2008 to 3.4% in FY 2011 and has further increased to 4.5% in 9M of FY 2012. The marketing activities are focused on generate footfalls in showrooms throughout the year with launch of bangles and chain festivals, Oodiyanam festivals, advance payment scheme called, "Kalpavruksha" (paying advance amount throughout a plan period)

IPO Circuit Limits on first day of listing

In light of high volatility and price movement observed on first day of trading, market regulator Securities & Exchange Board of India (Sebi) had vide its circular dated 20 January 2012 put in place a framework of trade controls for IPO and re-listed scrips. Price bands for issue size up to Rs 250 crore for the first day in the normal trading session will be 5% of the equilibrium price. Additionally, the trading shall take place in trade to trade segment for first 10 days from commencement of trading. For issue size greater than Rs 250 crore, the applicable price bands for the first day are fixed at 20% of the equilibrium price.

MT Educare IPO

MT Educare IPO

MT Educare IPO Analysis

MT Educare, promoted by Mahesh R. Shetty, is one of the leading coaching services providers in Maharashtra, with primary operations in Mumbai. The company is an education support and coaching services provider for students in the secondary and higher secondary school and for students pursuing graduation degree in commerce, preparing for various competitive examinations and undertaking chartered accountancy examinations.

IPO NBCC

IPO NBCC

NBCC IPO

NBCC IPO

NBCC IPO Note

NBCC IPO Note

NBCC Grey Market Premiums

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)	Kostak (Rs. 2 Lac Application)	Kostak (Rs. 5 Lac Application)
REC	1000	1 to 1.50 (Seller)	--	--	--
Olympic Cards Ltd.	30 (Flore Price)	0.50 to 1 (Seller)	--	--	--
NBCC	90 to 106	15 to 16 (Buyer)	--	--	--

NBCC IPO Analysis

National Building Construction Corporation, a public sector undertaking under the Ministry of Urban Development (MoUD), Government of India, is engaged in the business of (i) project management consultancy (PMC) services for civil construction projects, (ii) civil infrastructure for power sector, and (iii) real estate development.

PMC for civil construction projects is the major business of the company, accounting about 90.8% and 97.4% of the total revenue in H1 of FY 2012 and FY 2011. On the other hand, the share of civil infrastructure for the power sector stood at 3.3% and 2.1%, respectively. The share of realty was at 6% and 0.5% in H1 of FY 2012 and FY 2011.