Friday, November 26, 2010

MOIL IPO : Apply at cut off price

MOIL Limited (formerly Manganese Ore India Limited) or “MOIL” is a government owned company and the largest producer of manganese ore by volume in India (Source: Indian Bureau of Mines, Indian Mineral Yearbook 2008) and accounts for about 50% of country’s manganese ore production. The company plans to raise around Rs 1240 Crore through its Initial Public Issue, the issue which will open for subscription on November 26, 2010 and close on December 01, 2010.

At the upper price band of Rs 375 MOIL is trading at a P/E multiple of 13.5X and 9.5X as against its FY 10 EPS of Rs 27.7 and fully annualized FY 11 EPS of Rs 39.5. This coupled with superior Operating and Bottom-line margins of the company, significant cumulative cash resources which on a per share basis comes out to be Rs 105, large scale of its business and zero debt position; creates a very healthy scenario for the future growth potential of the company. Moreover, Retail investors are offered a discount of 5% on the discovered price; we recommend, to Apply for the Issue at “Cut-Off” Price.

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