Mundra Port SEZ IPO:To Invest Or Not.

11 Nov

Posted by Shyam as IPO Watch

As we all know that Mundra Port has come up with an IPO to rake in money from the Indian share markets ,so its time the investors need to decide whether to enter into this script or not.Lets look at the company and its financial positions in brief.Mundra port and SEZ is the largest SEZ of India located at Kutch District in Gujarat and is being promoted by the $4.4 billion Adani Group which has got business in different sectors like coal mining,power generation,real estate development ,shipping and port operations.

It is entering the IPO with over 4 crore shares of Rs 10 each with a price band of Rs 400-440 per share.At lower end of the price band it will raise about Rs 1610 crores.The issues opened on Nov 1st and closed on Nov 7th.

Objectives of the issue:

Financing and construction of the basic infrastructure at the proposed SEZ at Mundra.

Construction and development of a terminal for coal and other cargo at Mundra Port.

Contribution towards investment in Adani Petronet port called Dahej.

Contribution towards investment in Adani Logistics and Inland Conware

Now the very basic question is to whether to enter the IPO or remain away from it.Well most of the analyst are saying that Mundra SEZ IPO is a very good choice for long term players.It is also the first port and SEZ to be listed.The other players may also follow suit.They have a concession agreement for the port for 30 years which ends in 2031.

At upper end of the price band the company has a valuations of 17,000 crores which is very low when the size of the port is considered.So it has got a fair chance of growing at a good pace.The most important thing is that it is already operational according to their company site.Hence it has got huge chances of earning good revenues right from the word GO.

Analyst are of the view that the price of Rs 440 is a reasonable one.It is also being speculated that it may list at a premium of over 100-150% or Rs 700-800 range.More over as the Infrastructure booms grows this script should give good returns in time to come.

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