As MCX hit the roof top in the IPO market and subscribed 54 times on robust demand, was wondering how many of the investor bother to see that it was graded 5 star from the CRISIL. Here is a research proposal that could be worked upon on the IPO grading :-
On the 30th April 2007 SEBI decided to make grading of all IPOs mandatory. Grading makes additional information available for the investors, in the sense that it is supposedly an objective opinion of a credit rating agency arrived at after analyzing business and financial prospects, management quality and corporate governance practices etc of the issuer. Grades represent relative assessment of the fundamentals of the issue compared to other listed equity securities. Now that the IPO grading is about to complete one year, we seek to assess its impact on the primary market of equity shares.
Intuitively, we feel that grading should have direct effect on subscription statistics. Issues with grading of 3 or below should attract less subscription and issues of grading 4 or 5 should attract more subscription. It means that by and large the variability in subscriptions of different issues (i.e. if an issue gets p times subscribed, the variability in p) should rise after introduction of grading. If investors are risk avers, and if they trust grading, more monies should go to better graded issues. View full article »
What is common between the IPOs of Facebook and MCX ?They both have the Morgan Stanley as a lead manager for the IPO.
Both of them in the market since 8 years.
Both the IPO’s will try to revive their moribund IPO respective market.
Well not more things should be compared since the nature of both the entities is
different and there functioning is different. As always IPO’s has more critics as well
as well wishers. Valuations are always on the upper side and the initial investors
(promoters) are set to become millionaires, as India’s first ever share sale by an
exchange opens the next week. Crisil the rating agency graded MCX IPO 5/5 .
MCX has not left no stone – unturned as they failed to launch the IPO 2 times in the past.
MCX is valued at 24.8 times its year-end earnings as on March 31, 2011 at 860 and at29.8 times at 1,032. Its counterparts, the US-based CME and ICE, are valued comparatively cheap at around 16 times their estimated earnings for 2012, (source Blomberg)
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Continuing where I left in my last post Face book all set to fire . As on Feb 1st the social network confirmed its plans for an Initial Public Offerings (IPO) confirming its valuations between $75 billion and $100 billion. The valuation reflect an extraordinary belief that a start-up hardly 8-year-old firm is more valuable than Boeing , the world largest airraftmaker. Are they nuts ??
$100 Billion? 100:1 PE ratio?
I like Facebook but hard to imagine an upside there.
$100B is the same value as Verizon, Cisco, Pepsi or McDonald’s.
Would like to share three things that leaped out at me from Facebook’s financial filing. They involve marketing, hypocrisy and arrogance — in other words, standard Wall Street fair.
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The dark clouds are hanging over Europe, and there are rumors that Greece may Exit Euro. Yesterday Fitch the rating agency dented and downgrades Spain and Italy each by two notches, Belgium by one. Ireland affirmed at BBB+. Luck of the Irish! it was like a bomb but it was already discounted by the market and market not surprised by Fitch downgrades Euro remained higher against Dollar even after downgrades.
But Fitch was not a news maker, it was non other than Facebook raised the curtains which is ready all set for IPO filing, here is the big estimate whether market will discount this or not.They say $100B now… it will bump up to $115B by time of IPO… then $130B on first day out….
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