Date :Oct 18- Oct 23
Issue Price :35 Rs
Min. Order Quantity :175 Shares
Grade :Average
Recommendation :Skip
Company Info
Iron and steel maker, Rathi Bars will raise Rs 25 crore through initial public offer (IPO) to fund its production capacity expansion plans. The shares with a face value of Rs 10 each would be issued at Rs 35, he said. The issue would open on 18 October and close on 23 October.
The company has earmarked an investment of Rs 35 crore for purchasing and upgrading its equipment and other expansion plans. “The public issue will fund the bulk of the expansion programme. The rest of the fund will come from internal accruals and debt market,”
Valuation
Rathi bars is an average issue. The sector enjoys very low PE multiple of 5 to 6. Since company is already operating at its full capacity EPS for FY 08 and FY 09 is likely to remain at Rs 7 and present issue, discounts it, at a multiple of 5. Hence, not much upside is seen and such small issues, recently have been ruling at below its issue price.
Its better to avoid this IPO.People should wait for better scrips, which will be available in near term.
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