Future Capital to see Rs 350-400 premium: Experts

Future Capital to see Rs 350-400 premium: Experts
Future Cap may list between Rs 800 to Rs 1,20


The first public issue of calendar 2008, Future Capital Holdings (FCHL), the financial services arm of the Future Group, will list on the stock exchanges on February 1, 2008. Experts feel that the stock is expected to see a premium of Rs 350-400.
Manish Bhatt of Prabhudas Lilladher said, "Future Capital is expected to list with premium of Rs 350-400. One can make partial profit booking."
According to R S Iyer of K R Choksey Securities, "The stock is likely to debut at around Rs 1150. Above Rs 1250, one can book profits. If the stock does not go above Rs 1250, then one can wait for better price for selling."
"Future Capital is likely to get listed at Rs 1,140 levels against issue price of Rs 765. Profit booking is advised upto Rs 1,000 levels, while fresh investment is not advised. Share may witness huge momentum and volatility", Investment Advisor, S P Tulsian said. The company had fixed the issue price at Rs 765 per equity share (upper end of the price band) for its initial public offering (IPO) of 6,422,800 equity shares of Rs 10 each for cash at the above price decided through a 100% book-building process. The issue had opened for subscription on January 11, 2008, and closed on January 16, 2008. According to the preliminary data obtained from the stock exchanges, the issue was subscribed to approximately around 133 times (Source: NSE website). The qualified institutional bidders portion was subscribed to approximately around 180 times; the non institutional investors portion 84 times; and the retail portion 55 times. The public issue received more than 11.71 lakh applications and bids for 85.7 crore equity shares as against 6.422 million shares on offer. The equity shares are proposed to be listed on Bombay Stock Exchange and the National Stock Exchange. The issue constitutes 10.16% of the post-issue paid-up capital of the company. The book running lead managers to the issue are Kotak Mahindra Capital Company Limited, Enam Securities Private Limited, JM Financial Consultants Private Limited and UBS Securities India Private Limited.

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The issue was oversubscribed 134 times, so we are expecting a strong listing. Future Capital premium has declined from Rs 550 per share to about Rs 400-450 per share. So, if one goes by the grey market premium, the listing is expected around Rs 1,150-1,200 per share. Even the break-even price for a leverage player is working out to be around similar levels. If one goes by valuations, which most brokerages are giving, this is one of the businesses, which doesn’t have much financials at the moment. It is all about a lot of promises and how the future businesses would pan out.

On that basis, the brokerages have valued this company. Most valuations are between Rs 5,000 crore to Rs 6,000 crore. If one goes by the grey market premium, then we are looking at a listing price of around Rs 1,150-1,200 per share. If one goes by valuations that the various brokerages are giving, then we are looking at roughly about Rs 800-975 per share.

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