Just Dialed or Just Don’t Dial – IPO

I hate writing on the IPOs  personally I don’t like them – It is important to highlight apart from Mr Amitabh Bachchan imageswho else is playing the Just dial game becoming bit richer as he owned 62,794 shares, or 0.1% of Just Dial, since February 2011.

Though Mr. Bachchan won’t be selling his equity in the share sale, his investment could now be worth as much as 34 million rupees ($615,249). Meaning, he has made a theoretical profit of 33.5 million rupees ($603,048).

Moving out from Bollywood the latest that I know is Just Dial’s up to 9.4 billion rupee ($170 million) initial public offer was subscribed 11.6 times on closing on Wednesday, in what is the biggest IPO in the country so far this year.

Here are some of the arguments that I have – How can SEBI,Exchanges,MOF,Company Law Board even allow this IPO of just under Rs 1000 crs ! There are no real Objects to the Issue as it is fully an Offer For Sale by Existing and Part Exiting Promoters and PE Shareholders and the Company does not get any IPO Money

If you do subscribe in the IPO you’ll make these Existing and Part Exiting Promoters & Other PE Shareholders more very very very filthy rich in no time and making yourself poor in time to come !

At top band Price of Rs 543 the Issue Size is Rs 950 crs with all the Monies going to the selling shareholders that include three Promoters,V S S Mani,Ramani Iyer and V Krishnan and 6 Funds that include Sequoia III,SAIF,Tiger Global Four JD Holdings,Tiger Global Five Indian Holdings ,EGCS and SAPV ~ All are Part Exits except for EGCS who exits in full.

Am stunned simply at the gaul and audacity of the Company guided by it’s Lead Issue Managers Citigroup Global & Morgan Stanley to come out with such an overvalued IPO that is totally an Offer for Sale providing part Exit to Promoters and some PE Players !

Please do not carried away by the Crisil giving a top 5 on 5 IPO grading ! IPO Grading has simply no connection to the IPO Pricing which is over 50 Earnings Multiples and over 9 Book .

Here is a small paper on : DO Grading of IPO HELP ? (NO)

Corporate Governance Issues and if one wants to move past these then High Valuations in the IPO Pricing increases the Investment Risk Considerably Even Google at US $ 910 and a Market Cap of over US $ 300 Billion offers a Trailing P/E of 27 and a Book of under 4

Just Dial at Rs 543 is at 60 Earnings and 9 Book Multiples and will yet be under Market Cap of Rs 4000 crs and a Billion dollars.

More on IPO : Why IPO should be abolished

Over Priced – IPO

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