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From: The Sharekhan Research Team [mailto:marketwatch
Sent: 29 October 2007 15:14
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated October 29, 2007
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Dear Sir / Madam,
We are pleased to send you our analysis of the IPO of Religare Enterprises Ltd. with a Subscribe with a medium term view rating. The Rs140Cr ($36mn) IPO which is open for subscription during October 29 - November 1, is priced in the band of Rs160 - 185 per share.
Market cap of Rs14Bn or $356mn, based on the cap price.
Highlights
· Religare Enterprises Ltd. (REL), a Ranbaxy promoter group company, is one of the leading integrated financial services institutions in India. Operates from 392 cities and 1,217 business locations in India as well as a representative office in London.
· REL has undertaken reorganisation of its various businesses and created separate subsidiaries for effective functioning of each.
· RIHCL, an SPV, entered into a 50:50 JV with Aegon International NV to foray into mutual funds. For life insurance business in India, RIHCL has entered into a JV with Aegon (26% stake), in which the former has a 44% stake and investors 30% stake.
· REL subsidiary RWMSL formed a 50:50 JV with Macquarie for wealth management business.
· The Arts business operated under subsidiary RAIL will contribute to revenues FY09 onwards.
· Topline growth over the last 2 years has been phenomenal, driven by contribution of subsidiaries. H1 of FY08 also has seen aggressive topline and bottomline growth.
· Going forward, we expect the EBITDA margin to marginally increase, on account of addition of new businesses of investment banking, insurance, venture capital and trading in arts.
· High debt-equity ratio is a concern. While the large size of the balance sheet can be termed as a positive, interest costs will eat into profitability. Also some of new ventures like arts initiatives are risky.
· Pre-IPO placement to Indopark Holding, a Merrill Lynch subsidiary @ Rs160 per share aggregating at Rs61Cr, on October 15, 2007.
· Valuation of 22.6x in FY08E and 14.4x in FY09E is substantially lower vis-Ã -vis peers India Infoline (66.7x FY08E and 43.4x FY09E) and MOFSL (at 33.1x FY08E and 23.7x FY09E).
Please refer to the ratings structure and disclaimer on the last page of the report.
Mukesh Ambani world's richest now
http://economictime
NEW DELHI: Billionaire Mukesh Ambani on Monday became the richest person in the world, surpassing American software czar Bill Gates, Mexican business tycoon Carlos Slim Helu and famous investment guru Warren Buffett, courtesy the bull run in the stock market.
Following a strong share price rally on in his three group companie, India's most valued firm Reliance Industries, Reliance Petroleum and Reliance Industrial Infrastructure Ltd, the net worth of Mukesh Ambani rose to $63.2 billion (Rs 2,49,108 crore).
In comparison, the net worth of both Gates and Slim is estimated to be slightly lower at around $62.29 billion each, with Slim leading among the two by a narrow margin.
Warren Buffett, earlier the third richest in the world, also dropped one position with a net worth of about 56 billion dollars.
Ambani's wealth of about Rs 2,49,000 crore includes about Rs 2,10,000 crore from RIL (50.98 per cent stake), Rs 37,500 crore from RPL (37.5 per cent) and Rs 2,100 crore from RIIL (46.23 per cent).
Slim's wealth has been calculated on the basis of his stake in companies like America Movil (30 per cent), Carso Global (82 per cent), Grupo Carso (75 per cent), Inbursa (67 per cent), IDEAL (30 per cent) and Saks Inc (10 per cent).
According to information available with the US and Mexican stock exchanges where these companies are listed, Slim currently holds shares worth a total of USD 62.2993 billion, with more than half coming from Latin American mobile major America Movil. Slim is closely followed by Gates with a net worth of 62.29 billion dollars currently.
Earlier last month, US business magazine Forbes had named Gates as the richest American with a net worth of $59 billion, calculated as on August 30. The magazine had said that a movement of two dollars in the share price for Microsoft, the world's biggest software maker, could "add or subtract a billion dollars" from his wealth.
Since August-end, Microsoft's share price has risen by $6.58 (based on yesterday's closing on Nasdaq at $35.03), which results into a gain of $3.29 billion in Gates' wealth based on Forbes assumption.
Besides a stake in Microsoft, Gates' wealth also includes the commission and license fees earned by him and gains through his shares in an investment holding company that invests across the market.
Gates is followed by Buffett at the fourth place in the league of the world's richest with a net worth of $55.9 billion through his holding in his investment vehicle Berkshire Hathaway and in other companies. At the end of August, Buffett's wealth stood at $52 billion, as per the Forbes magazine. Berkshire Hathaway's share price has gained by about 7.5 per cent since then.
Earlier on September 26, Ambani had overtaken steel czar Lakshmi Mittal to become the richest Indian in the world.
Mittal currently ranks as the fifth richest in the world with a net worth of $50.9 billion through his 44.79 per cent stake in world's biggest steel maker ArcelorMittal.
While most of Mittal's wealth comes from his steel empire, though he has also spread his wings into businesses like oil and real estate, those of Ambani and Gates are mostly through petrochemicals and software respectively. However, Buffett and Slim are making money from investments across a host of sectors.
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