Research report on Pipavav Shipyard’s initial public offering (IPO).
The issue has opened for subscription today and will close on September 18. The price band is fixed at Rs 55-60. It recommended being cautious while investing in this issue.
· The company commenced its operations at the beginning of this fiscal year; there is lack of information with regards to the operating and financial performance of the company.
· Further, it is unfair to assume that the financial performance of PSL would be in-line with established peers like ABG Shipyard and Bharati Shipyard.
· Moreover, at the price band of Rs 55-60 per share, PSL’s stock would trade at higher valuations as compared to its peers. It seems that company’s financials for this fiscal year may not be comparable with its peers.
Thus, On the basis of financials of FY11 of PSL and its peers for comparison. On the basis of FY11 financials, PSL is trading at expensive valuation as compared to its peers. So, it’s better being cautious while investing in this issue.
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