Samvardhana Motherson Finance Ltd IPO Message Board (Page 2)

LOOK AT THIS COMPANY. NOT AT PARENT COMPANY. BIG LOSS MAKING COMPANY. SEBI OFFICIALS SHOULD BE MADE ACCOUNTABLE FOR CLEARING THIS ISSUE AT THIS HEFTY PRICE.

SEBI clearing doesnot mean that one should jump to buy. if its risky you should not apply... its as simple like that..

we should use our brain as its our money we are putting.

if issue withdrawn , how can related officials, if any will go on to summer vacation as plan may made.

No Buyers in Grey Market, Kindly let me know where grey market is open.

according to mr. tulsian IPO like jaypee infra; nhpc;was the best IPO but what happen to that issue every one is knowing . So don't go on the statement of mr.tulsian.you can subscribe the issue. It will give you as many return as MT EDUCARE has given.

As per MR. Tulsian review company got very poor respond from investor till 1 pm.. that only 250 shares application received..
i think issue will not subscribed in this 3 days..and company have to go for issue cancelled.. or reduce price and extend days..

HAI EVERYBODY,

AS PER S.P. TULSHIAN THE VALUATION OF THIS IPO IS 40/-. SO, HE CLEARLY

MENTIONED THAT ONE SHOULD NOT APPLY IN THIS IPO. AND I AM COMPLETELY

AGREED WITH HIM. PL DO NOT APPLY AND TEACH SUCH TYPE OF COMPANIES

A LESSON. SUCH TYPE OF COMPANIES WANT TO LOOT THE SIMPLE INVESTORS.

IN THIS MISSION SOME OF SEBI OFFICIALS MAY BE INVOLVED OTHERWISE

SUCH A HIGH RATE OF THREE TIMES CAN NOT BE FIXED.

COMPLETELY AVOID.

As of now thinking apply SMFL IPO,This IPO is next MT EDU.

to s w 18
in which city g.m is open ple let me knw so i wnt to seel my appli

Dear All,

As of now thinking Not to apply motherson IPO due to following reasons...

company is loss making

Shares are being isssued at very high valuations.... p/bv of over 4.

Promoters are selling through "offer for sale"

Most of the money will go mauritius and other tax heavens!!!! u can guess what they can do with IPO money!!!!

As always I donnot want to take very high risk for minimal gains.... So my decision is as of now... Not to apply in this issue..

If any changed thoughts from my side as issue progresses.... I will keep them updated to u...

Dear All
You can invest in this IPO because grey market is now open , today's rate is Rs 2200-2400 for full size application of 2 lac.
I can strongly support this IPO.
grey market market premium indicates that good returns at the time of listing of this issue.

This IPO is open invitation to share the loss of 152.9 crore
declared for 9 months ending Dec. 2011.

Should we oblige ?

Recommendation: AVOID
 
Samvardhana Motherson Finance Limited (SMFL), a parent of Motherson Sumi Systems Ltd (MSSL) is looking to come out with an IPO next week with a price band of Rs 113- Rs 118, to raise ~Rs 16.6bn from issue of fresh equity shares and offer for sale of a part of promoter holding.   SMFL is an investment/holding company of the promoter group (Sehgal family) and amongst other smaller holdings, its key investments includes the following stakes:
 
(a) ~36% in Motherson Sumi Systems Ltd (MSSL) – engaged in wiring harness and plastic component businesses
(b) ~46% in Visiocorp (now called SMR)  - one of the largest manufacturers of rear-view mirrors for passenger cars
(c) ~39% in Peguform (now called SMP) - a supplier of differentiated high quality interior and exterior products (bumper systems, plastic components for vehicle exteriors, vehicle dashboards and vehicle interior trims) for the automotive and related industries.

Samvardhana Motherson announced the price band for the IPO of Rs 113-118 per share. At the lower end of the band, it would result in dilution of 25%, fresh issue of 118.9mn shares and post dilution market cap of Rs 67bn (total outstanding shares – 593mn shares). This is as compared to Rs 69bn market cap of Motherson Sumi Systems Limited.

If we do a reverse calculation, the implied market cap for Motherson Sumi comes to a minimum of Rs 100 bn
This is based on the assumption that MSS (ex Peguform and SMR) business will grow at a mere pace of 13% and 10% in FY13/FY14. We believe that the growth opportunity in MSS is much higher than the implied growth rate. A faster growth in MSS (ex Peguform and SMR), which result in higher value accretion in MSS
There is also an implied assumption that SMR and Peguform profits will be ~70% of MSS (ex Peguform and SMR) in FY14 as compared to 12% and 39% in FY12 and FY13 respectively. We see downside risks to these assumptions
SMFL other business (ex MSS, Peguform and SMR) will report exponential growth. The most important risk is that this growth will be inorganic in nature and can have its own set of concerns w.r.t. to acquisitions (debt, turnaround risks etc). We are attaching a sheet which describes the business interest of SMFL
 
We recommend AVOID given that the issue price is expensive and as we believe MSSL could be a better and cheaper way to play the same businesses.
 
************
Key reasons to AVOID:
 
v      Pricey valuations: The post-issue market-cap that the company is looking for stands at ~67bn vs. our assessment of a fair value of Rs 30-40bn, based upon different valuation metrics (see below)
 
v      Better played through Motherson Sumi (MSSL): MSSL holds 51% stake in the entities holding the SMR & SMP businesses vs. 49% held by SMFL. The same entities/businesses which are played by SMFL can be played through buying the already listed entity MSSL, that too at valuations which are cheaper by about 40%.
 
v      Holding/Investment company structure: SMFL is a holding company of the promoter group with investments in over 30 companies - the major three, as mentioned above. Structure of holding/investment companies typically fetch a steep valuation (holding company) discount given absence of operating businesses/cash-flows and chances of arbitrary fund allocations.
 
v      A bet on management’s ability to turnaround businesses: Given the nature of an investment company, SMFL would be a bet on the management’s ability to find foreign assets cheap and then turning them around (they have a good track record in that, though). The future cash flows could be invested in any of the group companies requiring funds or for any future acquisitions. Infact, the proceeds from the IPO would be used for reducing debt for one of the recent acquisitions and funding a past acquisition.

Samvardhana Motherson announced the price band for the IPO of Rs 113-118 per share. At the lower end of the band, it would result in dilution of 25%, fresh issue of 118.9mn shares and post dilution market cap of Rs 67bn (total outstanding shares – 593mn shares). This is as compared to Rs 69bn market cap of Motherson Sumi Systems Limited.

If we do a reverse calculation, the implied market cap for Motherson Sumi comes to a minimum of Rs 100 bn
This is based on the assumption that MSS (ex Peguform and SMR) business will grow at a mere pace of 13% and 10% in FY13/FY14. We believe that the growth opportunity in MSS is much higher than the implied growth rate. A faster growth in MSS (ex Peguform and SMR), which result in higher value accretion in MSS
There is also an implied assumption that SMR and Peguform profits will be ~70% of MSS (ex Peguform and SMR) in FY14 as compared to 12% and 39% in FY12 and FY13 respectively. We see downside risks to these assumptions
SMFL other business (ex MSS, Peguform and SMR) will report exponential growth. The most important risk is that this growth will be inorganic in nature and can have its own set of concerns w.r.t. to acquisitions (debt, turnaround risks etc). We are attaching a sheet which describes the business interest of SMFL


We conclude that at the valuations of Rs 68bn of SMPL, the value of MSS will be in the range of Rs 100bn to Rs 110bn with an upside bias. The discount in the market cap of SMFL and MSS should be at least 33%, if not more. Which means, Rs 50 is more the correct entry price..

Samvardhana Motherson Finance's IPO is a tad expensive as per economic times review
capital market has given a rating of 30 only
at present no grey market activity
its a avoid

3.25 to 4.25 time over ss.............
521 to 399 shares allot
prim. 5 rs avr. 2000\= to 2500\= profit/////

day, April 29, 2012
SAMVARDHANA MOTHERSON IPO REVIEW - AVOID



For the 9 months ended 31-12-11, the company reported a total income of Rs 6025cr and loss of Rs 129cr. For FY12, the loss could be around Rs 200cr. The company post issue will have equity around Rs 593cr. Considering the Samvardhana demands a PE multiple of 10, the company should report a net profit after tax of Rs 590cr in FY13, which is unlikely. The funds are intended for reduction / prepayments of debt, investments in joint ventures and not for capacity expansion. One of the promoters is also part selling his stake in the offer for sale. It will take another year or two for the company to consolidate its operation and report decent bottom line.

AVOID THE IPO. taken from first choice

agreed .ipo market lost its charm.

Very good company,mainly manufacturing company with very good diversified product range.
Motherson has very good track record of paying dividend regularly.

Don,t waste you time and money all 95% ipo/fpos are trading upto 98% discount.

i don't think, anything has been left for the investors.

The analysis of the Company is not very good. The company is held by a 3-4 companies Incorporated in Maritius, British Virgin Islands and Swiss. The promoters have bought the shares at very low rate and the funds from this IPO shall be used to repay the debt in Maritius, BVI and Swiss. So not sure if the business ethics of the company are strong...

If so it will be risky to apply.....

LETS WAIT FOR VIEWS ON TULSIAN SIR TO APPLY FOR SMFL IPO

HAI EVERYBODY,

PRICE BANK HAS BEEN DECLARED FROM 113 TO 118.