On a turnover of Rs 1225cr for FY 10, the debtors outstanding are to the extent of Rs 825cr. That means more than 66% of the reported revenue is yet to be realized. One has take, this kind of turn over and debtors outstanding in an IPO year, with a pinch of salt. The CAGR, profitability has no meaning, since the company has experienced negative cash flow for the last four years.
At Rs 400-410, the company is demanding a valuation of 30x on FY10 earnings, on its post issue capital of Rs 75.60cr, which is very expensive. The company is not into exiting business to demand such high valuation. The company derives most of its income from EPC segment. The revenue from the other verticals are yet to pick up. Do not be mislead by the big name, IPO grading, associated with the issue. Even SKS Micro had the big names like Sequoia, Sores, Narayana Murthy and the same IPO grading. Within 3 months of its listing the share are down 30%, to its offer price.
AVOID THE IPO - FIRST CHOICE IPO ANALYSIS