Kaveri Seed Company Limited IPO Message Board (Page 3)

can anyone have idea of live subscriptition of kaveri ipo

i feel this ipo will be oversubscribed 15 times... and listing gain will be there like take soln.

i suggest go for this ipo..... this can give amazing returns.....

the issue will be oversubscribed by over 25 times

Kaveri Seeds (IPO): Invest at Cut-off - Hindu Business Line Report

Investors with a high-risk appetite can subscribe to the Initial Public Offering from Kaveri Seed Company, a producer of hybrid seeds. Long presence in the Indian market, a healthy product pipeline focussed on cash crops such as corn and sunflower and attractive growth prospects for the hybrid seeds business make this offer a reasonable investment.

However, the relatively stiff pricing and the possibility of cyclical and seasonal blips in earnings, suggest that the investment be considered only by those with a high risk appetite.

The offer is being made in the price band of Rs 150-170. At Rs 170, the offer price would discount the company’s foward earnings (estimated FY-08) by about 16 times, on the post-offer equity base. Though the company may be able to deliver to the growth expectations reflected in these valuations, the pricing appears expensive in relation to listed players in the agri-inputs space. This may cap short term gains in the stock, especially under current market conditions.

Kaveri Seeds has set a price band of Rs 150 to Rs 170 per equity share of Rs 10 each, translating into a PE of 19.5x on the lower price band and 22.1x on the higher side of the price band, according to EPS for FY 2007 on post-issue equity of Rs. 13.70 crore.

Monsanto India, the listed Indian subsidiary of Monsanto, US, which also sells hybrid seeds and genetically modified seeds to Indian farmers is presently trading at PE of 22x based on FY 2007 EPS.

Another hybrid seeds player J.K Agro Genetics is currently trading at PE multiple of 13x based on FY 2007 EPS.

The seeds industry is not a high-growth industry as its operations are sensitive to agro-climatic factors and unpredictable fluctuations. Moreover, Kaveri Seeds has shown substantial profit only in FY 2007 and its plans to enter the northern markets will take time to bear fruits.

In view of these factors, the asking P/E of around 20 looks high.

Past performance does not enthuse (Review by Premium Investments)
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Kaveri Seed is entering the capital market on 6th September 2007, with a public issue of 40 lakh equity shares of Rs.10 each, in the price band of Rs.150 to Rs.170 per share.

The company is into production, processing and marketing of high quality hybrid seeds, for different crops like Corn, Sunflower, Cotton, Paddy, Grain and Sorghum etc. The company has recently, diversified into micro-nutrients and bio-products and also produces non-hybrid seeds, primarily for paddy. The other listed peers are Monsanto, Syngenta, J K Agri-genetics and recently listed Advanta.

The financial performance of the company was lacklustre, till FY 06. In FY 02, topline was at Rs.23.65 crores, while PAT was just Rs.10 lakhs. Even in FY 06, total income was at Rs.49.72 crores with PAT of Rs.2.90 crores. Suddenly, in FY 07, though topline rose to Rs.67.24 crores, registering a growth of 35%, PAT increased sharply to Rs.10.54 crores, registering a growth of 263%. EBITDA rose to Rs.18.57 crores in FY 07 from Rs.5.53 crores in FY 06, recording, a growth of 235%.

Inspite of such an average performance of the company, promoters issued bonus of Rs.2.25 crores on 04-08-06 and equity shares of Rs.5 crores at par on 20-09-06 to themselves. Due to this, equity base increased to Rs.9.70 crores with net worth of Rs.26.28 crores as at 31-03-07, resulting in a book-value of Rs.27.10 per share.

The company is now implementing an expansion of Rs.63.30 crores, mainly to acquire farmland near Hyderabad for R&D, setting up marketing offices, corn cob drying plants, bio-technology lab, seed processing plant as also upgrading existing seed processing plant. The entire requirement is being met from proposed issue, is expected to be to the tune of Rs.60 crores to Rs.68 crores, depending on price discovery. Strangely, company mobilized Rs.3 crores in February 07, by private placement of 2 lakh equity shares at Rs.150 per share but this amount is not for meeting this capex. Existing operations seem fund starved. Post-issue, equity will rise to Rs.13.70 crores.

On pre-issue equity, EPS for FY 07 is at Rs.10.86 and hence at upper band, PE multiple works out at about 16. On fully diluted equity of Rs.13.70 crores, EPS comes at Rs.7.70 and PE multiple, in that event, works out at 22, at the upper band.

Monsanto, a leader in the segment and having highest EBITDA margin, is ruling at a PE multiple of 20. Even other players like Bayer Crop, Advanta and J K Agri-genetics are ruling at a PE multiple of 16 to 18.


Advanta, a recently listed peer, is ruling at Rs.820 with a high low of Rs.1,088 and Rs.585, with not very high investor interests. The track record and financial performance of the company, does not encourage one to go for the stock. Probably, secondary market price may be a better option, if someone has to urge to have this stock in the portfolio.

A mediocre issue, which certainly looks expensive at the upper band of Rs.170.

hi friends
it is good isue for short term

Kaveri is not in a exciting business. It is coming at a PE of 22 which i feel is too expensive for this industry. Also the promoters have been alloted shares in January 07 at a price of RS 10 and are now asking us to pay RS 170 /- . is this justified ? Is this a clear loot of public funds ? Beware of this company. Companies in this kind of industry normally trade at a PE of 5 to 7.. Keeping this in mind it is best valued at RS. 50-60 or so. So 170 is a heafty premium looking to the fundamentals..Best is to Avoid this issue.

The company appears to be on a very sound footing with a very strong hold on research, production,marketing and finance. Looking forward the industry will gain lot of attention and these kind of companies will get more demand. I feel this is valued very attractively and a must buy.

friends
valuation is very high but only concern is that Anand rathi manages IPO never listed below issue price
but fundamentally avoidable
HOLD HFCL as the share is going to cross Rs.35 mark the news is that BP is in the Acted again in this script

Very much steeply priced...Better avoid

Kaveri is not in a exciting business. It is coming at a PE of 22 which i feel is too expensive for this industry. Also the promoters have been alloted shares in January 07 at a price of RS 10 and are now asking us to pay RS 170 /- . is this justified ? Is this a clear loot of public funds ? Beware of this company. Companies in this kind of industry normally trade at a PE of 5 to 7.. Keeping this in mind it is best valued at RS. 50-60 or so. So 170 is a heafty premium looking to the fundamentals..Best is to Avoid this issue.

What about Kaveri Seed Company Limited IPO? Can I apply for the same.

Kaveri Seed fixes IPO band at Rs 150-170, Issue open from Sept 6 to 11

Business Line, Mumbai, Aug. 30

Kaveri Seed Company Ltd, an agri-input company, proposes to enter the capital markets with an initial public offering of 40 lakh equity shares of face value Rs 10 each.

The issue, which is being made through a 100 per cent book building process, opens on September 6 and closes on September 11. The price band has been fixed at Rs 150-170.

Of the total issue, 2 lakh shares have been reserved for eligible employees. Therefore, the net issue to the public is 38 lakh equity shares.

The total issue will constitute 29.20 per cent and the net issue will constitute 27.74 per cent of the fully diluted post issue paid-up capital of the company.

The equity shares are proposed to be listed on the BSE and the NSE.

The company plans to raise between Rs 60 and Rs 68 crore.

should i go for this ipo?

I want to know past financial performance of this co. .

It is not a good IPO. It may open in discount

may be ok for long term