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Review By Dilip Davda on April 10, 2014
At last a main line IPO from Wonderla is breaking the ice for the fiscal 2014-15 after a very dull season in past few months with only SME IPOs and few debt offers making the bee line. No doubt, two IPOs planned their issue i.e. Maiam Global Foods and Loha Ispaat, but the first one got postponed before even road show starts and the other one failed to garner minimum subscription despite longer duration period and lowering of rates, indicating at no trust from retail masses at large. And this has happened when the secondary market has made historic highs in past few weeks. Amidst such scenario, the main IPO from Wonderla is coming in this month.
Wonderla that got SEBI node in April 2013 and wanted to hit the market around last Diwali is now coming out just before its SEBI card gets expired. The company is from the stable of V-Guard group and has a commendable performance in the stock market from the parent company. Now it is coming out with a maiden offer for its amusement arm called Wonderla Holiday Ltd (WHL).
The company has two amusement parks at Bengaluru and Kochi and now planning third part at Ranga Reddy District of Andhra Pradesh. WHL’s parks offer a wide range of water and land based attractions catering to all age groups. It has 22 water based attractions and 33 land based attractions at Wonderla Kochi, situated on 93.17 acres of land and 20 water based attractions and 35 land based attractions at Wonderla Bangalore, situated on 81.75 acres of land. The company recorded total Footfalls of 23.40 lakhs in Fiscal 2013 and 17.50 lakhs in the nine month period ended December 31, 2013 across its two existing amusement parks in Kochi and Bangalore. Total Footfalls across the two amusement parks has grown at a CAGR of 7.42% from Fiscal 2011 to Fiscal 2013. WHL also has resort that is operated under the name, Wonderla Resort and, is a ‘Three Star’ leisure resort located beside its amusement park in Bangalore comprising of 84 luxury rooms, with amenities including banquet halls, a board room, conference rooms, a multi-cuisine restaurant, a solar heated swimming pool, recreation area, kids’ activity centre and a well equipped gym. Further, for setting up the proposed amusement park in Ranga Reddy District of Andhra Pradesh, it has acquired 49.57 acres of land.
To part finance this expansion plan, the company is coming out with a maiden IPO of 14500000 equity share of Rs. 10 each via book building route with a price band of Rs. 115-125. Minimum application is to be made for 100 shares and in multiples thereof, thereafter. Issue opens for subscription on 21.04.14 and will close on 23.04.14. Post IPO, its existing equity of Rs. 42 crore will rise to Rs. 56.50 crore. Issue is lead managed by Edelweiss Financial Services Ltd and ICICI Securities Ltd and Karvy Computershare Pvt Ltd is the registrar to the issue. This issue is rated as “IPO Grade 4” by CRISIL indicating above average fundamentals of the company. Post allotment shares will be listed on BSE and NSE. During January 2008 to Mach 2008 the company allotted around 1.5 crore equity shares at a price of Rs. 12 per share.
For past three fiscals, the company has posted an average EPS of Rs. 7.61. For first nine months of the fiscal 2013-14, it has earned net profit of Rs. 30.91 on a turnover of Rs. 121.53 crore translating in to annualized EPS of Rs. 9.81 on existing equity of Rs. 42 crore and at Rs. 7.30 on fully diluted equity of Rs. 56.50 crore post this IPO. Its NAV as on 31.12.13 is Rs. 36.29. Thus the asking price is at a P/E of 17+ and at a P/BV of 3.44 on upper price band basis. For a while, company will have southern centric play in the field with next project being planned at Chennai.
On merchant bankers’ front, Edelweiss had 20 mandates so far out of which 15 gave positive returns and 5 negative whereas ICICI Securities had 28 mandates out of which 15 gave positive returns and 13 negative.
As there is no comparable peer available as of now, the issue appears to be fully priced based on current market parameters, but being the first such company going public and has a average EBIDTA margins of around 45% for last three fiscals, issue is worth applying for handsome rewards in medium to long term.
Review By Dilip Davda on April 10, 2014
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on the information published here. My reviews do not cover GMP market and operators game plans. Any reader taking decisions based on any information published here does so entirely at their own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of Wonderla Holidays Ltd offers an early investment opportunity in Wonderla Holidays Ltd. A stock market investor can buy Wonderla Holidays IPO shares by applying in IPO before Wonderla Holidays Ltd shares get listed at the stock exchanges. An investor could invest in Wonderla Holidays IPO for short term listing gain or a long term.
Read the Wonderla Holidays IPO recommendations by the leading analyst and leading stock brokers.
Wonderla Holidays IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Wonderla Holidays IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Wonderla Holidays IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Wonderla Holidays IPO.
The Wonderla Holidays IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Wonderla Holidays IPO allotment status to check.
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