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    Thursday , May 05, 2016


   Publication: The Financial Express , Agency:Bureau
   Edition: Delhi/ Kolkata/ Bangalore/ Chandigarh/ Pune/ Ahmedabad/ Hyderabad/ Chennai/ Mumbai , Page No: 11 , Location: Middle Right , Size(sq.cms): 180

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Parag Milk Foods' IPO subscribed 0.10 times
fe Bureau
Mumbai, May 4: Parag Milk Foods' initial public offering (IPO) for Rs 766 crore saw a rea­sonably good response on the opening day on Wednesday. The issue was subscribed only 0.10 times with bids coming in for 19 lakh shares of the total 1.91 crore shares on offer.
On Tuesday, the company allotted 1.51 crore shares at Rs 227 apiece to anchor in­vestors, including Nomura In­dia Investment Fund, Morgan Stanley, Tata Balanced Fund among others, raising Rs 342 crore in the process.The IPO includes a fresh issue of shares worth Rs 300 crore and an offer for sale amounting to Rs 466 crore. The price band for the issue is Rs 220 to Rs 227 and at the upper end of the price band, the share is valued at 50.4 times its FY15 earnings.
The qualified institutional buyers (QIB) portion was sub­scribed 0.12 times as they bid for 13.1 lakh shares of the 103 lakh shares on offer for them. High net-worth individuals on theotherhandbidfor 1.45 lakh shares of the 50 lakh shares re-
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served for them, bidding 0.02 times. Retail investors were a little more enthusiastic as they bid for nearly 14% of their quota or 5 lakh shares of the 33 lakh shares reserved. Employees bidfor 8,970 shares of the 3 lakh shares reserved.
Domestic brokerage, India Infoline believes the stock is overpriced given growth prospects and emerging com­petition. The brokerage ex­pects the company to report an EPS (earnings per share) of Rs 8.6 per share for FY18E. The shares are being offered at a dis­count of Rs 12 for retail investors or at a multiple of 42.4 times es­timated FY16 earnings.
The company plans to use the proceeds of the offer for ex-
pansion andmodernisation of its dairy farms, partial repay­ment of debt and for general corporate purposes.
It reported a net profit of Rs 32 crore in the nine months to December , 2015 while the EBITDA stood at Rs 108; at the end of December the total debt was Rs 363 crore The com­pany which started off as a milk collection and distribu­tion channel, currently is a manufacturer of milk prod­ucts with brands like GO, Gowardhan, Topp Up and Pride of Cows. Kotak Mahin-dra Capital, JM Financial Se­curities, IDFC Securities and Motilal Oswal Investment Ad­visors are the investment bankers to the issue.
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Date: Thursday , May 05, 2016
Publication: The Financial Express, Agency: Bureau
Edition: Delhi/Kolkata/Bangalore/Chandigarh/Pune/Ahmedabad/Hyderabad/Chennai/Mumbai, Page No: 11, Location: Middle Right, Size(sq.cms): 180