Omaxe Limited IPO Message Board (Page 31)

its 10 % in retail on 17th july as per nseindia.com . so its going to be subscribed more than 40 times atleast.

Mr. Lokesh ,whoever u r ??on what ground u r saying to avoid this one?????

Omaxe (OL) Limited Review - Capital Market

CM RATING 46/100

Strengths
_________
1. Access to land reserve of approximately 3,255 acres end March 2007. Total land reserve includes about 571 acres belonging to joint ventures and collaborations in which OL has an economic interest of approximately 74% calculated on a weighted average basis. It owns 31% of the land reserve directly or through its subsidiaries and has sole development rights on 46% of the land bank. About 6% of the land has been allotted by the government and its agencies on a long-term lease of about 90/99 years.

2. Of the total land reserves, around 3096 acres (including approximately 451 acres belonging to joint ventures and collaborations) relate to projects that are currently under development or in various stages of approval for development, representing approximately 150 million sq. ft. of saleable area. Of the 150-million sq ft saleable area, about 66.6 million sq ft will be for group housing and 77.3 million sq ft developed into township and 4.89 million sq ft reserved for commercial purpose.

3. One of the first developers to conceptualise and develop theme malls in north India. OL conceptualised wedding mall: the one-stop shop for wedding arrangements. Given the strong supply glut in the retail space in the NCR region, this ability to differentiate its property will hold good in attracting tenants and retaining them.

4. Adoption of percentage completion method means revenue recognition starts only if the actual cost already incurred on the date of financial statement is at least 30% of the total project cost as estimated by the management. In FY 2008, OL is likely to recognise revenue for more projects out of the current 38 projects as against 23 projects in the previous year.

Weaknesses
__________
1. Ventured into realty business only in 2001 and has completed just eight projects since then. Was only a construction contractor since 1989. Despite longer track record as a construction contractor, OL decided not to take up any more construction contracts since March 2006 as the margin in the realty business is higher. As a company with limited track record in this business, it is more prone to cyclical ups and downs of the business.

2. The strong rise in real-estate prices and rising interest rates are likely to impact the affordability of housing. Real-estate prices are already showing signs of softening in certain locations

3. Effective tax rate stood at 20.18% in FY 2007 largely on account of benefits availed under Section 80-IB of the Income-Tax Act, 1961. For projects approved on or before March 2007 and completed within four years, OL is eligible for this benefit, subject to conditions. New projects approved after this date will not be eligible for this benefit. Hence, the company’s tax incidence is set to increase.

4. Operating cash flows in recent fiscals are negative. Operating cash flow for FY 2007 is negative Rs 713.13 crore. The comparative figure is Rs 131.06 crore in FY 2006. Strong negative operating cash flow is primarily on account of a sharp rise in projects in progress. This was Rs 839.75 crore end March 2007 compared with Rs 544.30 crore end March 2006. The inventory, too, has increased to Rs 192.08 crore end March 2007, from Rs 111.52 crore end March 2006.

5. Ol does not own the ‘Omaxe’ brand. It is owned by its Chairman and Managing Director. Rohtas Goel. Under a license agreement dated October 1, 2005, the company had to pay a lumpsum amount of Rs 1.2 crore and a royalty fee at the rate of 2% of its annual real-estate turnover. Accordingly it paid Rs 13.2 crore on this account in FY 2006. But from FY 2007, Goel has exercising his rights of renunciation, and has agreed to receive fixed payment of Rs 10 lakh per annum as royalty. Further, the license agreement expires end March 2008.

Valuation
_________
Total income posted a CAGR of 77.34% to Rs 1439.67 crore in FY 2007 to Rs 145.56 crore in FY 2003. CAGR in profit after tax and minority interest was 171.04% to Rs 257.26 crore in FY 2007, from Rs 4.77 crore in FY 2003.

Consolidated FY 2007 EPS on post-issue equity, assuming the green-shoe option is fully exercised, works out to Rs 14.7. At the offer price band of Rs 265 - Rs 310, the P/E range is 18 –21.1, respectively. Parsvnath Developers, the nearest comparable listed player, trades at P/E of 24.

A surprising aspect of first day's subscription is the 80% subscription by employees of the company. Do they know something others do not know?

Hellooo

What is the Percentage (%) applied by the retail investors in this issue?
Anybody has idea??

Dear ballynain and AKA,

Ravi has rightly said, PAN is only required in application exceeding 50,000. For more information please refer to the documentation clause of prospectus. The section reference number can be found in extreme left hand side of form where you mention PAN card details.

Best regards,
Vikas Jain

1.35 times bidded on the DAY 1..
so huge demand for Omaxe...
so it will be TOUGH to get the allotment..
i think not so beneficial now to go for this IPO..
what u guys say..??
Please discuss...!!!

Omaxe is oversubscribed 1.4 times

Omaxe, a real estate player, is open for subscription with a public issue of 1.78 crore equity shares of Rs 10 each with an additional green shoe option of upto 17.50 lakh equity shares in the band of Rs 265 to Rs 310 per share. The issue will close for subscription on July 20, 2007.

Qualified institutional investors, (QIBs) portion subscribed fully on day one.

All brokerages have come out with reports on Omaxe IPO, they advised investors to subscribe the issue.

First Global report says, "Looking at the price band of Rs 265-310, Omaxe is available at a FY07 P/E band of 18-21, as against a FY07 P/E of 53.6 for DLF, 35.1 for Unitech, 42.4 for Sobha and 23.9 for Parsvnath."

"The overall picture appears bright for Omaxe and its IPO, which is quite reasonably priced, is likely to prove rewarding for investors. We recommend ‘Subscribe’ on the Omaxe IPO."

Edelweiss Securities says, "We have valued the company on NPV basis. NAV estimate is INR 400–405. This represents a 51%-31% upside over the IPO price of INR 265-310 respectively. We have discounted the cash flows at a WACC of 15% over a period of four years."

"Government of India’s (GoI’s) increased thrust on improving the infrastructure and economic development in Tier 2 and Tier 3 cities is likely to provide Omaxe a big growth opportunity, going forward. We believe the company will be able to make the best of this growth opportunity, given its proven execution capabilities. We recommend ‘Subscribe’ to the IPO.

SSKI India says, "We have valued Omaxe using the NAV method, by discounting the equity flows from all its projects at a 15% discount rate. We have assumed a development cycle of about 8 years for the company’s current land bank and have not given any value for future land bank additions. Based on the above, our fair value estimate of Omaxe’s NAV comes to Rs 448/share, which gives a 44% upside from the upper band of the price range of Rs 265-310/share."

"We believe, Omaxe, with its established brand name, focus on quality construction and strong execution skills, is well placed to benefit from the rising demand for residential and commercial real estate in India. Moreover, we believe the company’s strengths mentioned above would ensure strong realisations for all properties, resulting in sustained growth in revenues, profitability and earnings in the future. We recommend to Subscribe to the issue."

The company has a land bank of over 3,000 acres and at present 47 projects are under development.

The issue would constitute 11.20 per cent of the fully diluted post-issue paid-up capital of the company, if the green shoe option is exercised and 10.30 per cent, if the option is not exercised.

Of the total equity float, up to 1.75 crore equity shares are for the public, while the balance 2.96 lakh shares are reserved for eligible employees of the company. Additionally, there would be a green shoe option of 17.5 lakh equity shares.

Omaxe has appointed DSP Merrill Lynch Ltd, Citigroup Global Markets India and UBS Securities India as global coordinators and joint book running lead managers for the issue. JM Morgan Stanley is the book running lead manager.

BBBBBBBBBBUUUUUYYYY
(Rs crore)

Revenues 31,128
Construction cost 16,794
SG&A (3% of revenues) 934
PBT 13,401
Tax 4,288
PAT 9,112

Discounted value
(13% for three years) 7,136
Less: Debt 1,099
Less: Customer advances 259
Less: Unpaid land payment 80
Add: Cash on hand 165
Add: IPO proceeds 552
Equity value 6,415
Number of post-issue equity 17.3

Fair value per share (Rs) 371

omeitech & zylog are better option than omaxe as real estate land bank valuation is always been a big question mark. there is no any standard procidure to evaluate nor any agency is there to evaluate. as per my view real estate shares are going to proove big bubbles

In future it its compulsory for the retail invester to show pan number in IPO form

OMAEX, is a very good issue. You will get good returns.

pan card is required only on the applications of 50000 or above not below that .

CHANDEEP ,FROM TODAY ONWARD PAN CARD ZEROX IS COMPULSARY FOR EVERY APPLICATION MADE WEATHER IT IS FOR ABOVE RS. 50000 OR LESS THAN RS. 50000. KINDLY TAKE NOTE AND BE CAREFULL.

Hi All, any inputs will be highly appreciated...

which is better of two Omaxe or IVR Prime?????????

IVR Prime subsidary of IVRCL Infrastructure is also coming up with its IPO, price band between Rs 510 and Rs 600 per share. The company is expected to raise between Rs 918 crore and Rs 1,080 crore at either end of the price band.

The issue will open on July 23 and close on July 26, 2007.

pan card to b submited for trans. above 50k

Hello Ravikiransingh
Very common sense says that if u have the demat a/c then only u can apply for the ipo. and if u have the demat a/c then u must have the pan card. then this sebi people, why the copy of pan card required?

dear Mr. Ravi Kiran singh [ 40]

U have misguided Mr. AKA by your reply Mr AKA is right and as per the SEBI guidelines under instruction of CBDT ( Ministry of Finance ) Quoting of PAN card is MUST for all transactins in Security Market. U can see this in the website of TAxmann.Com where the same circular was posted on the website way back in the month of April 2007.

aka,

pan card proof is required if you are investing 50k or more than that. below 50k retail investors doesnt required to provide their pan card proof.

hope i answered your query