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Wednesday April 23rd 2014

PPAP IPO – Precision Pipes IPO Opens on Dec 17th – Apply for sure

About Precision Pipes
About Precision Pipes and Profiles Company (PPAP) is engaged in the business of manufacturing automobile sealing systems and exterior products. PPAP’s product range includes weather strips, trim door opening, windshield molding, roof molding, quarter window seal, A-pillar garnish, B-pillar garnish, skirt air damper, body side molding, among others. Additionally, it manufactures PVC based customised profiles for white goods and other industries. PPAP has five manufacturing facilities, which are located in New Delhi and Noida, Uttar Pradesh.
About Precision Pipes IPO
Issue Period December 17, 2007 to December 20, 2007
Issue Size (.) Equity Shares aggregating Rs. 7500 Lacs
Issue Type 100% Book Building
Face Value Rs.10/-
Price Range Rs 140 to Rs 150
Tick Size Re. 1/-
Market Lot/Min Lot :45 shares
Issue Objectives
Fund to be use for setting up two new manufacturing plants for auto components and electrical outlet system products for Power and Data Corporation of Australia. It also plans to use the proceeds to expand capacity (to about 30 lakh kilos) in its existing plant from the current 12 lakh-levels.
Plus Factor
>PPAP is an OEM supplier to the automobile industry and its client list includes Maruti Udyog, Honda SIEL, General Motors and Toyota Kirloskar.
>PPAP is in agreements with Nissen Chemitec Corporation, Japan
>Leader in its area and striving to grow.
Minus Factor
> Fall in Automobile industry growth
> Large revenue from single client is not good sign , if the client sees a hit in it sales (Maruti Suzuki)
> No Export order
> Auto Sector dependent
Financial
Sales have increased from 39 crore sales in 2003 to 109 crore in 2007 , Net profit has increased from 4 crore to 13 crore.At a price band of Rs 140– 150, PPAP’s PE is at 14.5 – 15.1 times yearly 2007 earning and 10.2-10.6 times there-months FY 2008 annualized earning on post-IPO equity.
Crisil Rating for PPAP IPO
Crisil Rating for PPAP IPO is 4 out of 5.
Final Verdict – Apply for the IPO
I know there are some strong negative factors but for sure in coming years the revenue wioll increase and this being a rated company by CRISIL it will get very good attraction from QIB and FII so for sure this will subscribe more than 100 times for sure and get heavily listed like religare , so apply for PPAP IPO , But PPAP IPO Allotment will be lottery based.