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Friday, October 7, 2011

RDB Rasayanas stock succumbs to pressure after flat listing

RDB Rasayana stock today opened at Rs. 85 against the issue price of Rs.79 on BSE.

Stock touched the high of Rs. 93.15 and traded in tight range till 1:30 pm and then suddenly started its southward journey.
At the end of the day, stock managed to close at Rs.26.5 which 66% discount to the issue price.

The valuations of the stock were already much stretched, for the EPS (post issue) of Rs. 1, the issue price of Rs. 79 was never justified.
Net profit margin and CAGR (net profit) too were around 4 depicting poor growth prospects of the company.
Even at the today’s close price of Rs.26.5 share is expensive.
That’s why I had categorically warned my blog readers to stay away from this issue in the IPO analysis report.



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