Central Bank of India -IPO Prospects

Central Bank of India:

Central Bank of India is open for subscription with an initial public offering (IPO) of 80,000,000 equity shares of Rs 10 each

IPO Period: July 24 to July 27
Price Range: Rs.85 to Rs. 102
Minimum Share Lot: 60 Shares
Recommnedation: Subscribe
Grade: Good - for Long term

Valuations

In FY07, the bank posted EPS and Book value of Rs.13.1 and Rs.77.3. At the upper price band of Rs.102, the bank is trading at 7.8x FY07 earnings and 1.3x FY07 book value, which is cheaper as compare to its peers. Expect an net profit of the bank to grow at a CAGR of 18-20 percent for the next 2 years.

Comments

Central Bank of India is a good issue. The price is very reasonable. Banking sector is also doing well and it's government owned bank. So no need to worry on the banking front. People can apply for the issue. It is expected to list at around Rs 120-125.

Premium on Listing: 15 -20%*