Shobha Developers has long been in news to be preparing to offload 9,476,800 equity shares of 10/- each face value for a price band of 550-640. Even though the company has priced its IPO dearly; industry experts believe that it should bring decent long term returns.
The latest development is its IPO launch on 23rd November which remains open till 29th November, 2006. Here’s the news to share with you all.
Quote:
Sobha Developers is coming out with a net public offering of 80 lakh shares, priced within band of Rs 550-640 each. It plans to rise between Rs 440 crore and Rs 512 crore, to fund land acquisitions (Rs 234.3 crore), loan repayments (Rs 132.2 crore) as well as ongoing ad planned projects (Rs 142.5 crore).
Sobha Developers’ revenues have registered CAGR of 75 per cent through FY04-06 and stand at Rs 597 crore in FY06. During the same period, operating profit and net profit have grown at a CAGR of 175 per cent and 57 per cent respectively.
With an annualised EPS of Rs 14.8, the FY07 valuations of Sobha Developers stand at 43 times at the upper end of the band and 37 times at the lower end.
Sobha’s shares are priced at 45.9 times the FY06 earnings at the cap price and 39.5 times at the floor price. The FY06 valuations of peers stand at: BL Kashyap (31x), Ansal Properties (83x) and DS Kulkarni (19x).”
- Business Standard
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Taking the integrated business model into view, the company is likely to raise its capital as well as profits over the medium to long period. And with its each creation in Bangalore, Shobha developers has certainly been able to stamp its authority in the real estate market within a short span of time.
So, what the competitors of Shobha Developers going to do about such a strategic move?