CARE IPO Review

care-ipo

Credit Analysis & Research Ltd (CARE) is the second largest credit rating company in India. CARE offers rating and grading services across a diverse range of instruments and industries including IPO grading, equity grading, and grading of various types of enterprises.The company being professionally managed has no identifiable promoter and has domestic banks and financial institutions as key shareholders.

Credit Analysis and Research (CARE) is entering the capital market on 7^th December 2012 through an offer for sale of 71.99 lakh equity shares of Rs.10 each in the price band of Rs. 700 – Rs. 750 Per Equity Share.

Issue Details:

  • Issue Open: Dec 07, 2012 – Dec 11, 2012.
  • Issue Size: 7,199,700 Equity Shares of Rs. 10. 
  • Face Value: Rs. 10 Per Equity Share.
  •  Issue Price: Rs. 700 – Rs. 750 Per Equity Share.
  •  Market Lot: 20 Shares.
  • Minimum Order Quantity: 20 Shares.
  • Listing at BSE and NSE. 

On a consolidated basis, for 6 months ended 30th September 2012, company’s total income was Rs. 104 crore, with a net profit of Rs. 50 crore, resulting in net margin of 54.6% and EPS of Rs. 17.43, on equity of Rs. 28.55 crore.

India’s largest credit rating agency and S&P’s 53% subsidiary CRISIL at current price of Rs. 1024, quotes at a PE multiple of 34 times and  ICRA, in which Moody’s holds 28.5% equity stake, trades at 32 times. Whereas CARE, at the current IPO price is offered at lower P/E multiple of 20 times at the estimated EPS Rs. 35, which is attractive at current market conditions.

Hence, considering the valuations, investors can invest with a long term view and current market conditions favor those who invest for listing gains too.

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