Review By Dilip Davda on March 22, 2012
Off late we are seeing some surprised announcements for IPOs. If we recall, in the month of November 2011, we suddenly saw around 9 IPOs hitting the market in the month of October 2011 to mobilize funds in a hurried way. After which there was a lull in primary market till we saw MCX IPO opening in the Month of February 2012. Well market expected the close of fiscal 2011-12 with the IPO of NBCC, but suddenly we have seen the announcement of MT Educare IPO opening on 27.03.2012. Details of this IPO are as under:
MT Educare is the rechristened 'avtar' of Mahesh Tutorials that started its coaching classes business in 1984 and then went full-fledged in tutorials, education related field by 1988. The company provides coaching services to students in the secondary, higher secondary school and pursuing graduation degree in commerce, preparing for various competitive examinations and undertaking chartered accountancy examinations. Ever since then, it expanded its wings in four states i.e. Maharashtra, Gujarat, Karnataka and Tamil Nadu and is currently spreaded at 110 locations with 188 centres having 1400 faculty and staff and has serviced over 58300 students in the year 2010-11.
Mahesh Tutorials offers coaching for Std. IX & X - State Board, ICSE and CBSE Boards, Science coaching for Std. XI, XII, Engineering & Medical Entrance Test - CET, Commerce coaching for Std. XI till TYBCom, along with entrance test preps for CA - CPT, CS , CWA, and for professional CA (IPCC & Final) exams. MT Educare has also diversified into Pre-School and Day Care services through 'Global Champs'.
Now it mulls expansion of its Karnataka operations and constructing a PUC Campus and establishing new coaching centres at 20 locations. To part finance this it is mobilizing Rs. 35 crore via fresh issue of equity (approx 4375000 shares) and is also providing exit option to existing PE Helix Investment Company which is selling 80 lakh shares . The company is offering equity share of Rs. 10 each within a price band of Rs. 74-80. The issue opens on 27.03.12 and closes on 29.03.12. Post issue, shares will be listed on BSE and NSE. Enam Securiteis Pvt. Ltd. Is the sole BRLM for the issue and Link Intime India Pvt. Ltd. Is the registrar to the issue. CRISIL has assigned IPO Grade 4 to this issue indicating at above average fundamentals of the company. Minimum application is to be made for 80 shares and in multiples thereof thereafter.
As far as BRLM's performance in concerned, it has disclosed details on 10 mandates from 13.10.10 to 08.09.11 out of which 3 IPOs failed to give returns on debut day.
On company's front, it has earned net profit of Rs. 8.25 crore on a total income of Rs. 107.35 crore for 2010-11 and net profit of Rs. 9.75 crore on a total income of Rs. 72.29 crore for first six months of the current fiscal. This translates into annualized EPS of Rs. 5 on enhanced equity. Thus on the higher price band the asking price is at around 16 P/E and at a P/BV of about 5, which appears to be greedy one. The company has utilized free reserves while giving two liberal bonuses in the ratio of 5 for 1 (in 2009) and in the ratio of 32 for 1 (in 2010), thus new investors will have to wait for getting appreciation.
High Risk-Low Return - only risks aver investors can park modest fund for long term.
Review By Dilip Davda on March 22, 2012
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of MT Educare Ltd. offers an early investment opportunity in MT Educare Ltd.. A stock market investor can buy MT Educare IPO shares by applying in IPO before MT Educare Ltd. shares get listed at the stock exchanges. An investor could invest in MT Educare IPO for short term listing gain or a long term.
Read the MT Educare IPO recommendations by the leading analyst and leading stock brokers.
MT Educare IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the MT Educare IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is MT Educare IPO?"
Our recommendation for MT Educare IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the MT Educare IPO.
The MT Educare IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit MT Educare IPO allotment status to check.
