Monday, August 10, 2009

NHPC IPO

NHPC IPO is one long term story that looks similr to NTPC. Valuation on PE front seems expensvie to the naked eye but it is not true. But think about it from P/BV or even vision 2011 it seems something is left on the table.
a)I expect it would be around 44-45 for a long time before i takes a call on upside, on downside it wont be much from 36. P/BV post the listing would be around 1.45 times.
Valuations dont go by it Think about owning a HYdro POwer business 10000 MW by the end of 2011. It will be around 3 Rs per watt. So lot of potential at this point of time. With Maket being positive this will atleast trigger 39-42 in the first week of listing otself.
I put a subscribe on this IPO with a rating of 3. and long term rating of 4. Its fair price for issue is around 27- 33. This is because if I compare NTPC listing it gave 40% return to investors I expect the regulatory body will definitely adjsut to make sure you get 40% return on Investment on the amount allotted.
It seems the book will subscribe 5-6 times on retail front so you can get 15-16k worth of shares add the 20-25% gain. You can make appx 4500 -5000 on upper limit. The Kostak rate in different market is around 3k to 3.5k. SO i guess even punters has sensed the same.
Happy Investing.
PSU's at the time of listing has given decent returns and it will be no different to the promising star of tomorrow. D0nt go for valuation ploy lot many projects are undergoing, which has impacted Profit Loss on going basis as revenue will be streamlined in days to come