Investors Perception Towards IPO in Selection

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Investor Perception on IPO and Analysis of select IPOs

M P Birla Institute of Management 1

A DISSERTATION REPORT

ON

"INVESTORs PERCEPTION ONIPOs AND ANALYSIS OF SELECT IPOs

IN THE YEAR 2007".

Submitted in partial fulfillment of the requirement forM.B.A. Degree Course of BANGALORE UNIVERSITY

ByGirish T S

(06XQCM6123)

Under the guidance ofProf. Sathyanarayana

2006 - 2008


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Declaration

This is to state that the project titled "Investor Perception On IPOs And

Analysis Of Select IPOs In The Year 2007" is based on the original work

carried out by me from March to April 2008 under the guidance and supervision of

Prof. Sathyanarayana., faculty guide.

This is submitted in partial fulfillment of the requirements of the MBA

course in Bangalore University. This has not been submitted in part or full towards

any other degree or diploma.

Place: Bangalore Girish T SDate: 28-04-2008. 06XQCM6123


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CERTIFICATE BY GUIDE

This is to certify that the project titled Investor Perception On IPOs

And Analysis Of Select IPOs In The Year 2007 is based on the original work

carried out by Mr.Girish T S., bearing Reg. No. 06XQCM6123 during March and

April 2008 under my guidance and supervision.

The work has been satisfactory and is recommended for consideration

towards the partial fulfillment of the requirements of the MBA degree under

Bangalore University.

Place: Bangalore Prof. SathyanarayanaDate: 28-04-2008 Guide

ACKNOWLEDGEMENT


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The satisfaction and the happiness that accompanies the successful

completion of only task would be incomplete with out expression of appreciation

and gratitude to the people who made it possible.

Indeed I consider it as a pleasant duty, though equally difficult to

acknowledge the motivating efforts of several people who have helped me in

bringing this dissertation report to find its delight.

I express my deep love and thanks to almighty. My sincere thanks to Prof.

Dr. N.S.Malavalli, Principal and Prof. Sathyanarayana, faculty guide and mentor

and all the staff members who have guided me in undertaking this Dissertation.

I also thank Mr. Gururaj.K., Deputy Manager, Stock Holding Corporation

Of India Limited, Malleswaram branch, Bangalore for guiding me all the way

through the project.

Finally, I owe my gratitude to my beloved parents and my dear most friendswho have always stood by me and have been my moral support with sheer zeal

and enthusiasm at the worry and I dedicate my work to them

Lastly I also thank all the instructors those helped directly or indirectly for

completion my project.

28-04-2008. Girish T SBangalore 06XQCM6123


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CONTENTSChapter -I EXECUTIVE SUMMARY 1

Chapter -II INTRODUCTION 2

Background of the Study 4Advantages and Disadvantages of going public 4

The Three Phases of IPO transformation 5

About Book Building 6

The process 7

Pricing 8

Statement of the Problem 9

Chapter-III REVIEW OF LITERATURE

The post issue operative performance of IPO firms 10

A Review of IPO Activity, Pricing and Allocations 10

IPO Post Issue Markets 11

Conclusion 11

Chapter-IV METHODOLOGY

Type of Research 12

Sampling Techniques 12

Sample size 13

Sample description 13

Chapter-V COMPANY PROFILE

Introduction to SHCIL 14

History of SHCIL 15

Objectives of SHCIL 16

Product Profile 17

Services 20


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Chapter-VI PROFILE OF COMPANIES UNDER ANALYSIS

Akruti Nirman 22

DLF Limited 23

Edelweiss Capital 24

HDIL 25

House of Pearl Fashion 26

IVR Prime 27

Jyothy Laboratories 28

Motilal Oswal 29

Puravankara Projects 30

Take Solutions 31

Chapter-VII BASIS FOR ISSUE PRICE

Akruti Nirman 33DLF Limited 35


HDIL 39


IVR Prime 43

Jyothy Laboratories 45

Motilal Oswal 47


Take Solutions 51

Chapter-VIII PRESENTATION AND ANALYSIS OF DATA

Akruti Nirman 53

DLF Limited 55


HDIL 59


IVR Prime 63

Jyothy Laboratories 65Motilal Oswal 67


Take Solutions 71

Interpretation 73


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chapter-IX THE SURVEY 79

Chapter- X FINDINGS & CONCLUSION 97

QUESTIONNAIRE 100

BIBLIOGRAPHY 103


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LIST OF TABLESTable No. Table title Page

No.

1 Age group of investors 78

2 Gender of investors 793 Education level of investors 80

4 Income range of investors 81

5 Occupation of investors 82

6 Source of information for investors 83

6a Particular kind of media as a source of information 84

7 Frequency of investment 85

8 Objective behind selecting IPO 86

9 Source of fund for investment 87

10 Basis for analyzing a particular IPO 88

11 Portion of income for investment 89

12 Price range of IPO 90

13 Bidding price level 91

14 Expected return on day of listing 92

15 Holding period 93

16 Forward trading of investors 94

16a Expected premium for forward trading 95


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LIST OF GRAPHSGraph

No.

Graph Title Page No.

1 Three month return of Akruti Nirman Vs Sensex 52

2 Three month return of DLF Limited Vs Sensex 54

3 Three month return of Edelweiss Captial Vs Sensex 56

4 Three month return of HDIL Vs Sensex 58

5 Three month return of House of Pearl Fashion Vs Sensex 60

6 Three month return of IVR Prime Vs Sensex 62

7 Three month return of Jyothy Laboratories Vs Sensex 64

8 Three month return of Motilal Oswal Vs Sensex 66

9 Three month return of Puravankar Vs Sensex 68

10 Three month return of Take Solutions Vs Sensex 70

Chart

No.

Chart Title Page No.

1 Age group of investors 78

2 Gender of investors 79

3 Education level of investors 80

4 Income range of investors 81

5 Occupation of investors 82

6 Source of information for investors 83

6a Particular kind of media as a source of information 84

7 Frequency of investment 85

8 Objective behind selecting IPO 86

9 Source of fund for investment 87

10 Basis for analyzing a particular IPO 88

11 Portion of income for investment 89

12 Price range of IPO 90

13 Bidding price level 91

14 Expected return on day of listing 92

15 Holding period 93

16 Forward trading of investors 94

16a Expected premium for forward trading 95


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EXECUTIVE SUMMARY

Towards the fulfillment of project program, a study was conducted at Stock Holding

Corporation of India Ltd., Bangalore. The dissertation involved the study of InvestorsPerception on IPOs and to analyze the selected IPOs in the year 2007.

Among various modes of raising fresh capital, the equity issue started gaining momentum

in India during early 1980s. It reached the peak during early 1990s. Many companies

made public issue during the year 2007. These companies raised funds by placing a high

premium on the issue. Today most of these companies are trading below the expectation.

The main objective of this study is to analyze the Post issue performance of select IPOsissued in the year 2007, to know the perception of the investors investing on IPOs, to

understand the basis for pricing the issue and to find the reasons for under pricing the

issue. And also to analyze the investment pattern of the investors on IPOs.

The study is being done from the investors point of view based on criteria of certain

factors like issue price, listing price, and performance of these shares in a period of three

months after the listing. For the study, 10 companies with an issue price of more than

Rs.500 have been chosen. After a rigorous analysis of each company it was found that

majority of the companies were over priced and are now generating negative returns at

the end of 3 month period.

This study also covers investors perception and preferences on IPOs. It was found from

the study that investors are happy with the performance of the IPOs in India. They invest

in IPOs with an objective of making quick money. Most of the respondents feel better

investing in IPOs than investing on shares in secondary market, because they consider it

is less risky considered to trading on stocks in secondary markets. Most of the time the

investors get their expected returns on the day of listing.


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INTRODUCTION

The transition from being a private company to a public one is one of the most important

events in the life of a firm. It is also one of particular interest to institutional investors,

and the transition is facilitated through the initial public offering (IPO) process. The IPOprovides a fresh source of capital that is critical to the growth of the firm and provides the

founder and other shareholders such as venture capitalists a liquid market for their shares.

From an institutional investor's perspective, the IPO provides an opportunity to share in

the rewards of the growth of the firm.

When a firm issues equity to the public for the first time, it makes an initial public

offering consisting of two kinds of issues the primary issue and the follow-on issue. In

a primary, the firm raises capital for itself by selling stock to the public, whereas in the

follow-on issue, existing large shareholders sell to the public a substantial number of

shares they currently own.

It is a well documented fact that IPO tend to be generally under-priced, though some

issues tend to be overpriced. From the viewpoint of financial research, IPO under-pricing

in the sense of abnormal short-term returns on IPO has been found in nearly every

country in the world. This suggests that IPO under-pricing may be the outcome of basic

problems of information and uncertainty in the IPO process, and is unlikely to be a

figment of institutional peculiarities of any one market.

There have also been various studies made to suggest the reasons for such under pricing.

From the investors point of view, this under-pricing appear to provide the sure and quick

profit that most dream about. Though first day return could vary, few of the issues tend to

provide a very high return over the first day. One of the examples is VA Linux which had

a first day return of 700%. It is also seen that for some of the issues, the first day return

could also be negative. It then becomes inevitable for most investors to measure the

performance of IPOs by the short term (usually within one week of issue), as the general

scheme is to buy the shares at a low initial offering price and sell it the next day when the

price increases.


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Pricing of the IPOs are done by the issuers with guidance from underwriters from

investment banks. There are various ways to price the stocks but what is commonly used

now is a process called book building. It is basically a capital issuance process used in an

Initial Public Offer which aids price and demand discovery. It is also a process used for

marketing a public offer of equity shares of a company. During the period for which the

book for the IPO is open, bids are collected from investors at various prices, which are

above or equal to the floor price. The offer/issue price is then determined by the issuing

company after the bid closing date based on the various bids that have been collected. For

a more detailed discussion of book building, one can visit any of the many stock

exchanges. An example of the book building process can be seen from the National Stock

Exchange. This Initial Public Offering can also be made through the fixed price method

or a combination of both book building and the fixed price method.

There have been various studies conducted on the price changes of the shares after

prolonged periods (six months to five years). These studies show that while the short-run

performance of IPOs is often quite impressive, the long-run performance over the

subsequent three to five years is not as impressive. Excluding the initial-day return, IPOs

tend to under perform various benchmarks. However, these studies focus mainly on

developed economies and tend to neglect the developing counterparts.

In some years there are a large number of IPOs while in some years, there are only a few

IPOs. When it is a vintage year with a large number of IPOs, most IPOs tend to do well

on the first day but tend to do poorly over a long term whereas in years when there are

only a few IPOs, the results tend to be mixed. The long run performance is likely to be

affected while we include IPOs from different time periods because the market

movements in different market conditions are likely to be different. In order to see that

results are not confounded by the time period when IPO was issued, it was decided to

include IPOs that were issued within a one-year period.


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BACKGROUND OF THE STUDY:

Advantages and Disadvantages of going public:

Advantages Disadvantages

Stronger capital base Short-term growth pressure

Increases other financing prospects Disclosure and confidentiality

Better situated for making acquisitions Costs - initial and ongoing

Owners risk diversification Restrictions on management

Executive compensation Loss of personal benefits

Increase company and personal prestige Trading restrictions

Last year's IPO activity, even with a market crash in the Sensex in late spring, was

extremely robust despite worries by some that the Indian stock rally had run its course.

Yet when stock prices resumed their march upward later in the year, investors began to

view the pessimists with skepticism and again started snapping up shares of newly listed

companies.

About 80 companies raised $5.4 billion in 2007. And some investors were rewarded

handsomely, particularly with companies in high-growth sectors.

Even so, investing in India IPOs overall has been a risky affair. About 50% of the Class

of 2007 initial offerings is today trading at break-even or below their listed price.

With India desperately struggling to rev up its infrastructure, from roads to power to

ports, a host of real estate and infrastructure companies entered the market. The largest

IPO last year was New Delhi-based real estate company DLF, which is benefiting from

India's booming commercial and residential construction market. Last August, thecompany shelved an IPO to raise about $2.5 billion to pay debt and fund construction

after minority investors complained.


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The three phases of a completed initial public offering (IPO) transformation

process:

While some large and successful companies are still privately-owned, many companies

aspire toward becoming a publicly-owned company with the intent to gain another source

of raising funds for operations. An initial public offering (IPO) represents a private

company's first offering of its equity to public investors. This process is generally

considered to be very intensive with many regulatory hurdles to jump over. While

the formal process to produce the IPO is well documented and as a result is a fairly well-

structured process, the transformational process of which a company changes from

a private to a public firm is a much more difficult process.

A company goes through a three-part IPO transformation process:

1. a pre-IPO transformation phase,

2. an IPO transaction phase and

3. A post-IPO transaction phase.

The pre-IPO transformation phase: It can be considered to be a restructuring phase

where a company starts the groundwork toward becoming a publicly-traded company.

For example, since the main focus of public companies is to maximize shareholder

value, the company should acquire management that has experience in doing so.

Furthermore, companies should re-examine their organizational processes and policies

and make necessary changes to enhance the company's corporate governance and

transparency. Most importantly, the company needs to develop an effective growth and

business strategy that can persuade potential investors the company is profitable and can

become even more profitable. On average, this phase usually takes around two years to

complete. .

The IPO transaction phase: This usually takes place right before the shares are sold

and involves achieving goals that would enhance the optimal initial valuation of the firm.

The key issue with this step is to maximize investor confidence and credibility to ensure

that the issue will be successful. For example, companies can choose to have reputable


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accounting and law firms handle the formal paperwork associated with the filing. The

intent of these actions is to prove to potential investors that the company is willing

to spend a little extra in order to have the IPO handled promptly and correctly.

The post-IPO transaction phase: involves the execution of the promises and business

strategies the company committed to in the preceding stages. The companies should not

strive to meet expectations, but rather, beat their expectations. Companies that frequently

beat earnings estimates or guidance are usually financially rewarded for their efforts. This

phase is typically a very long phase, because this is the point in time where companies

have to go and prove to the market that they are a strong performer that will last.

ABOUT BOOK BUILDING

SEBI guidelines defines Book Building as "a process undertaken by which a demand for

the securities proposed to be issued by a body corporate is elicited and built-up and the

price for such securities is assessed for the determination of the quantum of such

securities to be issued by means of a notice, circular, advertisement, document or

information memoranda or offer document".

Book Building is basically a capital issuance process used in Initial Public Offer (IPO)

which aids price and demand discovery. It is a process used for marketing a public offer

of equity shares of a company. It is a mechanism where, during the period for which the

book for the IPO is open, bids are collected from investors at various prices, which are

above or equal to the floor price. The process aims at tapping both wholesale and retail

investors. The offer/issue price is then determined after the bid closing date based on

certain evaluation criteria.


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The Process:

The Issuer who is planning an IPO nominates a lead merchant banker as a 'book

runner'.

The Issuer specifies the number of securities to be issued and the price band for

orders.

The Issuer also appoints syndicate members with whom orders can be placed by

the investors.

Investors place their order with a syndicate member who inputs the orders into the

'electronic book'. This process is called 'bidding' and is similar to open auction.

A Book should remain open for a minimum of 3 days.

Bids cannot be entered less than the floor price.

Bids can be revised by the bidder before the issue closes.

On the close of the book building period the 'book runner evaluates the bids on

the basis of the evaluation criteria which may include -

o Price Aggression

o Investor quality

o Earliness of bids, etc.

The book runner and the company conclude the final price at which it is willing to

issue the stock and allocation of securities. Generally, the numbers of shares are fixed; the issue size gets frozen based on the

price per share discovered through the book building process.

Allocation of securities is made to the successful bidders.

How does an IPO get valued?

Initial public offerings (IPOs) are unique stocks because they are newly issued. The

companies that issue IPOs have not been traded previously on an exchange and are less

thoroughly analyzed than those companies that have been traded for a long time. Some

people believe that the lack of historical share price performance provides a buying

opportunity, while others think that because IPOs have not yet been analyzed and

scrutinized by the market, they are considerably riskier than stocks that have a history of

being analyzed.


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Pricing

Historically, IPOs both globally and in the US have been underpriced. The effect of

underpricing an IPO is to generate additional interest in the stock when it first becomes

publicly traded. This can lead to significant gains for investors who have been allocated

shares of the IPO at the offering price. However, underpricing an IPO results in "money

left on the table"lost capital that could have been raised for the company had the stock

been offered at a higher price.

The danger of overpricing is also an important consideration. If a stock is offered to the

public at a higher price than the market will pay, the underwriters may have trouble

meeting their commitments to sell shares. Even if they sell all of the issued shares, if the

stock falls in value on the first day of trading, it may lose its marketability and hence

even more of its value.

Investment banks, therefore, take many factors into consideration when pricing an IPO,

and attempt to reach an offering price that is low enough to stimulate interest in the stock,

but high enough to raise an adequate amount of capital for the company. The process of

determining an optimal price usually involves the underwriters ("syndicate") arranging

share purchase commitments from lead institutional investors.


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Statement of the problem:

The study was conducted to know the investment pattern of investors in IPO and to

evaluate the performance of IPO after their listing, most of the companies which raised

capital during the year 2007 which had priced their offering above Rs.500/share. Also an

attempt has been made to find out the reasons for issue of shares at discount. In light of

this, an analysis was made on IPOs.

Objectives of the study:

1. To study the investors perception about investment in IPO.

2. To study the post issue performance of selected IPO made during 2007.

3. To study the reasons for issuing stocks at a discount price.

4. To study the basis for arriving at the issue price.

Need for study:

This study is conducted to analyze the post issue performance of few selected companies

that issued fresh equity capital during the year 2007.The performance of shares after

listing are considered. The companies are selected on the basis of its price/share.

The study on investors perception is confined only to IPO investors. The study is to

know whether the investors are satisfied with the IPOs or not, and to see whether the

companies are aiming at share holders wealth maximization.

The findings and conclusions of the study can be used by individual investors forinvesting on new public issues.


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REVIEW OF LITERATURE:

The Post-Issue Operating Performance of IPO FirmsBharat a. Jain and omesh kini

The Journal of Finance, Vol. 49, No. 5, (Dec., 1994), pp. 1699-1726

We find that IPO firms exhibit a decline in post-issue operating performance, as

measured by the operating return on assets and operating cash flows deflated by assets,

relative to their pre-IPO levels, both before and after industry adjustment. The decline in

operating performance of IPO firms, however, comes with a caveat. These firms exhibit

high growth in sales and capital expenditures relative to firms in the same industry in the

post-IPO period. Thus, the declining operating performance of IPO firms cannot be

attributed to a lack of sales growth opportunities or cutbacks in post-IPO capital

expenditures. We also find that IPO firms where entrepreneurs retain higher ownership

generally demonstrate superior performance relative to other issuing firms both before

and after adjustment for industry effects. We find no relation between post-issue changes

in operating performance and initial returns at the IPO.

A Review of IPO Activity, Pricing, and AllocationsJay r. Ritter and Ivo Welch

The Journal of Finance, Vol. 57, No. 4, Papers and Proceedings of the Sixty-SecondAnnual Meeting of the American Finance Association, Atlanta, Georgia, January 4-6,

2002, (Aug., 2002), pp. 1795-1828

Our article seeks to review different explanations for the patterns in issuing activity,

underpricing, and long-run underperformance. But it also weighs in with our personal

perspective on issues that are still contentious. We believe that the time-variation in these

phenomena deserves more emphasis. For example, the long-run performance of IPOs is

not only sensitive to the widely debated choice of econometric methodology, but also to

the choice of sample period, as shown in Table I. Further, we argue that asymmetric

information theories are unlikely to be the primary determinant of fluctuations in IPO

activity and underpricing, especially the excesses of the Internet bubble period. Instead,

we believe that specific nonrational explanations and agency explanations will play a

bigger role in the future research agenda. In discussing theories of underpricing, we


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devote significant attention to the topic of share allocations and subsequent ownership. In

our view, how IPO shares are allocated is one of the most interesting issues in

IPO research today.

IPO post-issue markets: questionable predilections but diligent

learners?Peter Bossaerts and Pierre Hillion

The Review of Economics and Statistics, Vol. 83, No. 2, (May, 2001), pp. 333-347

The post-issue performance of IPOs has been considered to be a puzzle. In the long run,

IPOs significantly underperform standard benchmarks or equity in appropriate matched

firms. The puzzle has been confirmed in numerous follow-up studies. (See, for example,

the Spring 1993 issue of Financial Management, Jain and Kini (1994), and Loughran andRitter, 1995.) The evidence is now generally interpreted as suggesting that the market is

too optimistic when pricing young issues. It realizes its mistakes slowly, adjusting prices

as the issues mature. Although some have argued that the biases in the market's prior at

the issue date are a natural consequence of shortsale restrictions (Miller, 1977; Morris,

undated), it could also be a mere sign of the beliefs at a particular point in time. Indeed,

most studies focus on IPOs executed during the 1970 and 1980s. That priors over this

period were biased does not necessarily imply irrationality, because the bias was

demonstrated to be there only ex post, that is, with the benefit of hindsight. Instead, it

seems much more fruitful to ask whether subsequent changes in the market's beliefs were

rational. If beliefs can be expressed in terms of the chance numbers of classical

probability theory, we know precisely what this means: changes should obey the rules of

conditional probability (Bayes' law).1 We will also take this to mean that the market

knows the likelihood of the signals it receives given the eventual fate of an issue (will it

default?). We set out to test this weaker restriction on market beliefs.

Conclusion:

From the above literature review, it can be found that the investor perception has not been

considered for their study. So, in this context, it can be stated that the investor perception

has been taken into consideration to study the IPOs. An attempt has been made to bridge

the gap between investors perception and the actual of IPO.


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METHODOLOGY:

Type of Research:

In this study Exploratory Research has been used. Exploratory research helps determine

the best research design, data collection method and selection of subjects. Given its

fundamental nature, exploratory research often concludes that a perceived problem does

not actually exist. Exploratory research often relies on secondary research such as

reviewing available literature and data, or qualitative approaches such as informal

discussions with consumers, employees, management or competitors, and more formal

approaches through in-depth interviews, focus groups, projective methods, case studies or

pilot studies.

Sampling technique:

Convinience sampling is used as a tool in this study. Convinience sampling is a type of

nonprobability sampling which involves the sample being drawn from that part of the

population which is close to hand. That is, a sample population selected because it is

readily available and convenient. The researcher using such a sample cannot scientifically

make generalizations about the total population from this sample because it would not be

representative enough.

This study has two parts:

1. IPO analysis

For IPO analysis secondary data has been collected from various sources. Most of the

data is obtained through internet sources and other publisher reports. Secondary data is

the data that are already available. The data required is collected from a data base called

Capitaline. Primary data is collected through questionnaire. The sample size is 100.

The quantitative financial data required for this study are listed below:

Face value, security amount, issue price, listing price.

Three months share prices after listing.

The daily returns for share prices and sensex are calculated using the formulae:

Returns = (Closing Price Opening Price)/Opening Price


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For the IPO analysis sample size is 10 companies.

Here the top 10 companies which have highest issue size have been chosen.

The companies that have been selected are:

Company Name Issue Size ( in crores)

1. Akruti Nirman Limited 362

2. DLF Limited. 1067.33

3. Edelweiss 765

4. HDIL 760.83

5. House of Pearl Fashion. 602.78

6. IVR Prime. 569.17

7. Jyothy Laboratories. 425

8. Motilal Oswal. 378.85

9. Puravankara 372.6

10.Take Solutions. 363.28

2. Investors perception on IPOs.

To know the investors perception about IPO a survey has been conducted on investors

who are interested in investing on IPO. This acts as first hand information which is beingcollected from the investors. A questionnaire was used as a tool for collecting primary

data. The sample size of the study was 100 investors.

Limitations of the study:

The share prices are based on the data collected from capitaline database and any

error inherent in the data may be reflected in the study.

The study was limited to the investors investing on IPOs and the sample size was

just 100. So generalization of results has its own limitations.

For the analysis of IPOs after listing only three months share prices were considered.

Time available for the study was limited.


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COMPANY PROFILE

Introduction to SHCIL

Stock holding corporation of India limited (SHCIL) is promoted by the public financial

institutions and insurance majors like IDBI, UTI, ICICI, LIC, GIC, IFCI and IIBI.

SHCIL was incorporated as a public limited company on July 28, 1986 and provides

custodial service to institutional investors and depository services to retail investors.

SHCIL commenced operation in August 1988 and has been providing custodial and

related services of international standards for nearly a decade, being a premier custodian,

SHCIL holds client Assets worthier Rs210 million and reserves of 630 million.

Other auxiliary services provided by SHCIL include Derivatives, Clearing, PF funds,

Insurance.

SHCIL works in a highly computerized environment and employs the state of art of

technology to facilitate its business and to minimize risk. SHCIL has been awarded a

citation by the Smithsonian Institution, Washington D.C. for the visionary use of IT and

by the computer society of India for the Best IT usage.SHCIL is the first DP to be registered with the NSDL.SHCIL offers the facility of

operating beneficiary account for Individuals and corporate as well as clearing account

for the brokers.

The aim is to impart the account holders, knowledge about the working of

depository system and facilitate a smooth transaction from physical to electronic

trading


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History of SHCIL

Stock Holding Corporation Of India Limited (SHCIL) was incorporated under the

Companies Act, on July 28th

of 1986 at the initiative of the Government of India. To

provide specialized and dedicated custodian services to government financial institutions.

It was promoted by seven all India Financial institutions viz.,

1. Industrial Development Bank of India.

2. Unit Trust of India.

3. Industrial Credit and Investment Corporation of India LTD.

4. Industrial Finance Co-operation of India.

5. Life Insurance Bank of India.

6. Industrial Investment Bank of India.7. General Insurance Corporation of India and its subsidiaries, viz.,

Oriental Insurance Company Ltd.

New India Assurance Company Ltd.

National Insurance Company Ltd.

United India Insurance Company ltd.

SHCIL commenced operation in August 1988 and has been providing custodial and

related services of international standard for more than a decade, being a premier

custodian. SHCIL today holds more than 45 million certificates of clients assets in its

custody.

The Securities Exchange commission, U.S.A has recognized SHCIL as an Eligible

custodian under section 17(f) of the US Investment Company Act-1940 and framed

there under.

SHCIL provides depository, post trading, custodial services, securities lending, to

institutional investors and retail investors. Other auxiliary services provided by SHCIL

include derivatives clearing, PF fund accounting, SGL constituent account services,

mutual funds and other capital market instruments distribution.


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OBJECTIVES OF SHCIL:

1. To eliminate paper work and bring electronic stock market (E- stock market) in

India.

2. To ensure satisfaction through teamwork and professional management.

3. To extend effective guidance to brokers, clearing house/corporation, companies

and investor in E-Stock treading.

4. To provide good quality of services on a continuous basis to the satisfaction of

clients.

5. To encourage every one in the organization to upgrade and enhance employees

skills and knowledge in computerized environment.

6. To attain specified level of performance every year and ensure compliance with

statutory regulatory requirements.

Values

Safety and Efficiency of operations is a hallmark of SHCIL

Professionalism and Integrity

Customer First

Relationship building

Commitment to quality irrespective of asset size

Technology

Comprehensive business solutions adept in handling high volume time critical

transactions within a secured environment.

Zero error approach towards delivery of products and services

Single window view of business and up-to date information

Oracle database currently of 1.2 Terabytes size (and growing) managed by

competent IT personnel with domain expertise.

Data mirroring using cluster technology and fiber optic connection as part of

Disaster Management Plan.


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Network Security using Firewall, Proxy, Intrusion Detection System(IDS) and

Intrusion Prevention System (IPS)

Internet products with built in PKI features

Dedicated communication channels with built-in redundancies in connectivity to

Client Institutions, Stock Exchanges, Clearing houses and Depositories.

Accolades and Certifications

Citation and Medal from Smithsonian Institute, Washington D.C, U.S.A. for

Visionary and Innovative use of Technology in Finance, Banking and Insurance

Industry". First South Asian Corporate to receive this.

Computer Society of India Award for best IT usage in the Country

SHCILs software processes have been assessed at SEI CMM Level 3.

Accepted industry leader and pioneer in Custodial Systems.

PRODUCT PROFILE

ADD SHARES

Use the Dematerialized shares in investors account as collateral to get loan to account

holders. SHCIL arranges loan against demat shares. Tie up with reputed banks, which

offer account holders the most competitive interest rates in the market. Account holders

can use the shares in their account as collateral and take a loan from any of empanelled

banks. SHCIL completes clients documentation and processing and gives the Cheque

within 48 hours of application. ADD shares simplify long-winded loan procedures for

clients and facilitates early disbursement of funds.


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.EQUIBUY

This product of SHCIL helps the investors to get faster credit of the shares into their

accounts with only single instruction. This helps in faster turnaround of investors

portfolio. This product has a very nominal charge attached to it. An initial advance of

Rs.1,000 in the Purchase Advance account and replenishments, as and when necessary,

take care of payment for investors purchases.

As your depository participant, SHCIL assures investor for safe delivery of shares every

time they buy on the exchange. SHCIL has lined up a panel of reputed brokers who

process investors orders on priority. SHCILS position as the clearing corporations of

leading stock exchanges ensures smooth and sure credits into investors account.

FUND INVESTMENT

Fund Invest is a basket of financial products, ranging from fixed income securities like

fixed deposits, Infrastructure bonds and Capital Gain Bonds to variable income securities

like Initial Public Offers (IPOs) of Equities and Mutual Funds. It is an attempt to offer

financial products that cater to the various investments needs of SHCILs esteemed

clients. An effort to guide the investor to a product portfolio that best suits his risk -

return profile.

Applications for investments can be source from any of the SHCIL offices. Apart from

guiding investor to pick up the right combination of investment instruments, SHCIL help

them 'after-sales' service, by acting as an interlocutor between the investor and the issuer

of the securities. SHCIL is an AMFI Registered Mutual Fund Advisor (ARMFA).

At present, SHCIL is distributing schemes of different Mutual Fund. All these Funds

offer wide varieties of investment option depending on the risk appetite of the investor.


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GOI BONDS

RBI on behalf of Government of India issues Savings Bonds. These Bonds are held in

electronic form in an account called Bond Ledger Account (BLA). Bond Ledger

Accounts can be opened and operated with RBI designated receiving offices. RBI has

designated SHCIL as one of the Receiving Offices for this purpose. Subscriptions for

Savings Bonds can be submitted at any branches. Savings Bonds being sovereign in

nature are absolutely safe and an attractive investment option in the current volatile

market situation.

STOCK DIRECT

Stock direct has changed the way investor look at trading in securities. From investors

desktop they can now send instructions for buying/selling shares. A three-way handshake

between leading brokers, national and international banks and SHCIL is the crux of Stock

direct.

Stock direct - India's first online trading platform was launched in 1999. Today Stock

direct is the most secure online trading platform which combines encryption technology /

digital signature as well as Smart Card security features.

A few clicks will seamlessly check investors funds and security positions route the order

to the broker of investors choice and do the necessary fund and share movements for

client. For people who are not inclined to trading on the net, SHCIL have Request

Transmitting Machines (RTMs) placed at specified SHCIL canters. This is an electronic

touch screen kiosk where client can insert his smart card and trade effortlessly.


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SECURITY LENDING

SHCIL has been granted the approval to act as Approved Intermediary by SEBI in April

1998.

If client is the lender, he can retain all the benefits of ownership other than voting rights.

Through Stock lending, clients holdings that SHCIL manage, can be temporarily

transferred to a third party to earn a fixed income for him as a borrower, client can utilize

borrowed securities the way he want provides him return the securities along with the

accrued benefits at the end of the loan period. Securities deposited with SHCIL by the

investors for lending will not be treated as sale and hence will not attract any capital gains

tax. The interest income received will be taxed like any other income.

SERVICES:

CUSTODIAL Services

SHCILs core competence in Custodial business spans 18 years, with a dedicated pool of

trained and experienced professionals working literally round the clock using state-of-artcomputer systems and world class technology.

DP Services

Our Depository Participant services address your individual investment needs. With a

parentage of leading financial institutions and insurance majors and a proven track record

in the Custodian business, SHCIL has reiterated its past success by establishing itself as

the first ever and largest Depository Participant in India.


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Derivative Services

SHCIL provides Clearing Services for derivative segment of BSE/NSE and Commodity

segment of MCX/NCDEX.

SHCIL is a Custodian/Professional Clearing Member of derivative segment at the

Bombay Stock Exchange and at the Futures & Options Segment of the NSEIL

respectively.

SHCIL is the first Professional Clearing Member of Commodity segment on the Multi

Commodity Exchange (MCX) and National Commodity & Derivative Exchange

(NCDEX).

Clearing Member Services

We accept deposits of base capital and Additional base capital requirements stipulated by

NSE for clearing members trading on its capital market segment. Besides, our new

products with a broker empanelment clause ensure a mutually beneficial tie-up. Clearing

members stand to earn a steady income from our product transactions and new adds to

their client-base, while we capitalize on their rapport with the market.

We currently offer Depository services to more than 680 clearing members of various

exchanges connected with NSDL and CDSL.

Broking Services

Stock Holding Corporation of India Ltd. (SHCIL) in its endeavor to provide one stop

shop to its large retail & institutional clients has promoted SHCIL Services Limited(SSL) as its broking arm.


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AKRUTI NIRMAN LIMITED

Akruti Nirman Limited is a real estate development company in Mumbai, India. Atpresent, its primary business is the development of commercial and residential properties.

The operations include the identification and acquisition of land and land development

rights, and the planning, execution and marketing of the projects. In their commercial

business line, they build, lease and sell commercial office space, including office towers

and information technology parks, with a focus on properties attractive to the information

technology, information technology enabled services ("ITES") and business processing

outsourcing ("BPO") industries and large multinational companies. In its residential

business line, it develop multi-unit residential apartment buildings with residences

ranging from one bedroom flats to higher end, five bedroom residences. In the new retail

business line, they are currently developing first six shopping malls which contain space

for retail units, food courts, banquet halls and restaurants, in which they intend to lease

space to retailers upon their completion.

A key focus area of the business has been real estate development on slum rehabilitation

land, pursuant to the slum rehabilitation scheme initiated by the Government of

Maharashtra (GOM) in 1992, whereby in return for constructing new residential

buildings for former slum dwellers, the GOM grants them either the right to develop a

proportion of former slum land for their own purposes, or transferable development rights

(TDRs), which permit them to develop land in certain parts of Mumbai that are outside

the relevant slum area.

Security Amount (Rs. crores ) 362

No. of securities 6700000

Security face value (Rs) 10

Price band (Rs) 475-540

Issue price (Rs) 540

Premium per equity (Rs) 530

Listing price (Rs) 405

Returns on listing day (%) -25

Capital issue date 19-01-2007

Listing date 04-04-2007


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DLF LIMITED

The DLF Group was founded in 1946. DLF developed some of the first residential

colonies in Delhi such as Krishna Nagar in East Delhi, which was completed in 1949.

Since then DLF has been responsible for the development of many of Delhis other well

known urban colonies, including South Extension, Greater Kailash, Kailash Colony and

Hauz Khas.

Following the passage of the Delhi Development Act in 1957, the state assumed control

of real estate development activities in Delhi, which resulted in restrictions on private real

estate colony development. DLF therefore commenced acquiring land at relatively low

cost outside the area controlled by the Delhi Development Authority, particularly in thedistrict of Gurgaon in the adjacent state of Haryana. This led to the first development,

DLF Qutab Enclave, which has evolved into DLF City, our landmark project. DLF City

is spread over 3,000 acres in Gurgaon and is an integrated township which includes

residential, commercial and retail properties in a modern city infrastructure with schools,

hospitals, hotels, shopping malls and a leading golf and country club. DLF City

incorporates Cybercity, our leading commercial development, which when completed is

expected to have developed area of approximately 20 million square feet.








Returns on listing day (%) 5.81




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EDELWEISS CAPITAL LIMITED

Edelweiss is a diversified financial services company in India, providing investment

banking, institutional equities, private client broking, asset management and investment

advisory services, wealth management, insurance broking and wholesale financing

services to corporate, institutional and high net worth individual clients. Edelweiss is

headquartered in Nariman Point, Mumbai and operates from another 43 offices in 21

Indian cities.

Since their commencement of business in 1996, they have grown from a boutique

investment bank into a diversified Indian financial services company organized under

agency and capital business lines and operate through the Company and its ten

subsidiaries. Edelweiss agency business lines include investment banking, institutional

equities, private client broking, asset management and investment advisory services,

wealth management and insurance broking; while the capital business lines includes

wholesale financing services and internal treasury operations. In the year ended March

31, 2007, revenues from the agency business lines (primarily attributable to our

investment banking and institutional equities activities) were Rs. 2,154.3 million, while

revenues from the capital business lines (primarily attributable to our internal treasury

operations) were Rs. 1,406.9 million.








Returns on listing day (%) 75




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HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED

HDIL is a real estate development company in India, with significant operations in the

Mumbai Metropolitan Region. The business focuses on Real Estate Development,

including construction and development of residential projects and, more recently,

commercial and retail projects, Slum Rehabilitation and Development, including clearing

slum land and rehousing slum dwellers, and Land Development, including development

of infrastructure on land which they then sell to other property developers. HDIL has an

integrated in-house development team which covers all aspects of property development

from project identification and inception through construction to completion and sale.

Since its incorporation in 1996, it has developed 23 projects covering approximately 11.0

million square feet of saleable area, including approximately 5.7 million square feet of

land sold to other builders after Land Development, primarily in the Mumbai

Metropolitan Region. They also have constructed an additional 2.0 million square feet of

rehabilitation housing area under slum rehabilitation schemes.


No. of securities 30000000Security face value (Rs) 10




Listing price (Rs) 567.50

Returns on listing day (%) 13.5




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HOUSE OF PEARL FASHION

House of Pearl fashion is a multinational, ready-to-wear apparel company operating in

three business streams: manufacturing, marketing and distribution, and sourcing of

garments. They also provide total supply chain solutions to the customers, which include

value retailers as well as higher-end fashion brand retailers in the United States and

Europe. Their multi-stream business model enables them to offer multi-country, multi-

gender and multi-product options to the global customers. House of Pearl fashion

believes these capabilities make them a preferred vendor for garment retailers around the

world.

They began operations in 1987 with one manufacturing facility at Gurgaon, India. Over

the years, they expanded their manufacturing operations in India. They also spread their

business beyond India by setting up a sourcing business in Hong Kong with sourcing

offices in China and Bangladesh, marketing and distribution businesses in the U.K., the

U.S., Canada and Spain, and manufacturing facilities in Bangladesh and Indonesia. They

believe that their integrated global business model positions them to take advantage of

synergies in product design, development, manufacturing, distribution and sourcing of

ready-to-wear apparel products. We seek to leverage the competitive advantages of each

location to optimize value for the customers, while maximizing the gross margins.






Premium per equity (Rs) 540Listing price (Rs) 330

Returns on listing day (%) -40




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IVR Prime Urban Developers Limited (the Company or IVR PUDL), a subsidiary of

IVRCL, is a growing real estate development company focusing on integrated townships,

residential developments, and commercial projects, including hotels, retail malls, ITparks and other projects in various parts of India. As on January 23, 2007, the Land

Reserves consisted of approximately 2,298.75 acres, representing approximately 56.63

million sq. ft. of Saleable Area, in the cities of Hyderabad, Chennai, Bangalore, Pune

and Noida.

IVR was incorporated by Individual Promoters in 1996 and became a subsidiary of

IVRCL in 2001. The Company was selected as a special purpose vehicle to develop the

residential complex in Gachibowli, Hyderabad for the athletes and officials of the 32nd

National Games held there in December 2002. Gachibowli Village Project, their first

project, marked the entry to the real estate market. Gachibowli Village is a fully

integrated township near Cyberabad, in Hyderabad, spread over approximately 38 acres.

They have completed development of a built-up area of approximately 2 million sq. ft.

consisting of 17 high rise towers with 664 apartments and 125 independent villas. They

are currently developing approximately 0.77 million sq. ft. retail mall with a multiplex

cinema, which will include apparel stores, restaurant outlets and entertainment centers, as

well as an IT park consisting of approximately 0.71 million sq. ft. office tower above the

retail mall. In addition, we plan to develop a business hotel of approximately 0.50 million

sq. ft.







Returns on listing day (%) -16.67




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Jyothy Laboratories Limited is a fast moving consumer goods (FMCG) company in the

fabric care, household insecticide, surface cleaning, personal care and air care segments

of the Indian market and offer branded products including fabric whitener, mosquito

repellent, dishwashing, bath and incense products. The flagship brand Ujala liquid fabric

whitener had a 68.1% market share by value in the Indian organized segment in 2006

according to A.C. Nielsen and, as per estimates from Marketpulse-IMRBs Household

Purchase Panel, Ujala was purchased by 75.4 million surveyed households during the

period April 1, 2006 to March 31, 2007. This represents 37% of the surveyed household

population.

The key brands are Ujala, Maxo, Exo, Jeeva, and Maya. The product line for Ujala (a 24

year old brand, used prior to incorporation of the Company) consists of fabric whitener,

fabric stiffener and washing powder. The Maxo product line consists of mosquito

repellent coils, liquid vaporizers and aerosol sprays. Exos product line includes dishwash

bars and dish wash liquid with an anti-bacterial agent, dish wash powder, and dish

scrubbers. They produce personal care products under the Jeeva brand and market air

freshening incense sticks or agarbatti under the Maya brand. They also have entered into

joint ventures to market and distribute coffee and spiritual dhoops.








Returns on listing day (%) 15.8Capital issue date 27-11-2007



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MOTILAL OSWAL

Motilal Oswal is a well-diversified financial services firm offering a range of financial

products and services such as retail wealth management (including securities and

commodities broking), portfolio management services, institutional broking, venture

capital management and investment banking services. As a leading Indian domestic

brokerage house, MO has a diversified client base that includes retail customers

(including high net worth individuals), mutual funds, foreign institutional investors,

financial institutions and corporate clients. MO has headquartered in Mumbai and as of

December 31, 2006, had a network spread across 363 cities and towns comprising 1,160Business Locations operated by our Business Associates and us.

Motilal Oswal Financial Services Limited is the holding company and also provides

financing for our retail broking customers. We operate through the following four

subsidiaries:

Motilal Oswal Securities Limited (MOSL)

Motilal Oswal Commodities Brokers Private. Limited (MOCB)

Motilal Oswal Venture Capital Advisors Private. Limited (MOVC)

Motilal Oswal Investment Advisors Private. Limited (MOIA).








Returns on listing day (%) 21.1Capital issue date 23-08-2007



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TAKE SOLUTIONS LIMITED

Take Solutions a leading international business technology company with products

backed by a strong domain expertise to provide cost-effective comprehensive solutions

for businesses. Use of strong domain knowledge, deployment of the robust technology

frame work, a client centric, template free, approach to solutions deployed and a sound

delivery model form the basic tenets of organization.

Started in the year 2001, the company was formed by a group of professionals, with an

entrepreneurial drive, extensive knowledge and experience in the area of Supply Chain

Management. They have since grown both organically and through acquisitions. This has

facilitated their reach into other geographies, introduction of another specialized domain -

Life Sciences, and expansion of the product range.

The products are focused on the Supply Chain Management (SCM) and Life Sciences

(LS) verticals and are complimentary to the legacy or enterprise resource planning

software, which their clients currently use. They currently have 11 active products in the

SCM vertical, which are housed under the One SCM suite, and 6 products in the LS

vertical under the One Clinical suite. The foundation of all the product offerings in

both segments is the domain knowledge and the TAKE RTE (Real Time Enterprise)

framework.







Returns on listing day (%) 20




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BASIS FOR ISSUE PRICE

The pricing of IPOs in India now follows a systematic process. Initially, the firm and the

merchant banker will choose an offering price and prepare a prospectus about five

months before the issue date. The prospectus is then submitted to the SEBI for approval.

After SEBI approves of the information disclosures in the prospectus, a mass media

advertising campaign targeted at the lay investor will commence about a month before

the issue date. The issue then closes four to ten days after it opens, after which investors

apply for shares and pay an amount which is often less than the full offering price. After

the issue closes, the allotment itself takes place. The actual listing and the date of first

trading takes place long after the issue itself opens the difference between the face value

and offering price of the issues is called the share premium. It is prohibited by law to

price equity with a positive premium unless the issuing company has been making profits

for at least three recent years. The amount of equity sold also cannot exceed 75% of the

total.

Issue price of any security will be decided on Qualitative and Quantitative factors. To

determine the issue price the company should consider their strengths as well as

opportunities. This also influenced by certain external factors like government policies,GDP, etc. Here, all the Qualitative and Quantitative factors of 10 companies are given:


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CRIS-INFAC has stated in its annual review of retailing that the drivers for the growth of

organized retail, which include:

o Demographic factors

o Increasing disposable income

o Changing shopping habits

o The entry of international retailers into the domestic market; and

o The growing number of retail malls

Qualitative factors:

Price/earning (P/E) ratio in relation to the Issue Price of Rs.540 per share of Rs. 10

each

Based on EPS for the fiscal year ended March 31, 2006, of Rs. 17.87

a) P/E ratio in relation to the Floor Price: 26.58 times

b) P/E ratio in relation to the Cap Price: 30.22 times

Based on the Weighted average EPS of Rs. 10.73:



Industry P/E:

a) Highest : 196b) Lowest : 2.9

c) Average : 32.9

Comparison with other listed companies:

EPS (Rs.) P/E RoNW(%)

Sales (Rs. Inmillion)

Ansal Housing 11.9 14 11.2 1254

Ansal Properties 14.5 23 13.7 3446D S Kulkarni 8 21 18 166

Mahindra GESCO 0.2 196 2.1 1211

Unitech 0.8 123 35 6531


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DLF LIMITED


1. In recent years, India has experienced rapid economic growth. Indias GDP grew at

7.5%, 8.1% and 8.4% in fiscal 2004, 2005 and 2006, respectively. In fiscal 2005, the

industrial, agricultural and service sectors in India grew by 9.0%, 2.3% and 9.8%,

respectively.

2. An important factor in the growth of the services sector has been the strong growth of

the IT and ITES sectors. These sectors benefited from the growing international trend

toward off shoring and the resultant demand for skilled, low cost, English speaking

workers. Indian competitiveness in this area has been aided by substantial investmentin telecommunications, infrastructure and the phased liberalization of the

communications sector.

3. Historically, the real estate sector in India has been unorganized and characterized by

various factors that impeded organized dealing, such as the absence of a centralized

title registry providing title guarantee, a lack of uniformity in local laws and their

application, non-availability of bank financing, high interest rates and transfer taxes

and the lack of transparency in transaction values. In recent years however, the real

estate sector in India has exhibited a trend towards greater organization and

transparency, accompanied by various regulatory reforms.

4. The growth in the residential real estate market in India has been largely driven by

rising disposable incomes, a rapidly growing middle class, low interest rates, fiscal

incentives on both interest and principal payments for housing loans and heightened

customer expectations, as well as increased urbanization and nuclearisation.

5. The recent growth of the commercial real estate sector in India has been fuelled, in

large part, by the increased revenues of companies in the services business,

particularly in the IT and ITES sectors. Industry sources expect the IT and ITES

sectors to continue to grow and generate additional employment, which we expect

will result in increased demand for commercial space.


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each


c) P/E ratio in relation to the Floor Price: 40.52 times

d) P/E ratio in relation to the Cap Price: 44.57 times




Industry P/E:

d) Highest : 305

e) Lowest : 5.2

f) Average : 51.4


EPS(Rs.)

P/E RoNW(%)

Sales (Rs. Inmillion)

DLF 20.06 12420

Ansal Housing 11.5 16.7 24.3 1175

Ansal Properties 14.3 51.3 42.8 3207D.S.Kulkarni 7.7 29.4 62.5 166

Mahindra GESCO 0.2 305.6 2.1 1211

Unitech 0.8 210.6 35 6531


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EDELWEISS CAPITAL LIMITED


1. India is one of the fastest growing economies in the world with a rapidly expanding

financial services sector. After adjustments for purchasing power parity, Indias

economy is the fourth largest in the world in terms of Gross Domestic Product

(GDP). In recent years, India has become a preferred destination for Foreign Direct

Investment (FDI), owing to its well developed private corporate sector, large

consumer market potential, large pool of well educated and English speaking work

force, and well established legal systems. Overall, India attracted FDI of around US$

35.07 billion between Fiscal 2000 and Fiscal 2006.

2. There has been a considerable broadening and deepening of the Indian financial

markets due to various financial market reforms undertaken by the regulators, the

introduction of innovative financial instruments in the recent years and the entry of

sophisticated domestic and international players. Sectors such as banking, asset

management and brokerage have been liberalized to allow private sector involvement,

which has contributed to the development and modernization of the financial services

sector.

3. The growth of the economy and Indian corporations has coincided with a sharp

increase in foreign direct investment, including significant participation from private

equity firms, a marked increase in investment in the real estate sector, increasing

M&A activity, and a growing demand for credit from both corporations and

consumers. With it, there has been a proliferation in the presence of intermediaries

such as investment banks and securities firms that closely monitor the performance of

the markets and provide extensive fundamental and technical research on the

economy, sectors, and companies. All of these have contributed significantly to the

growth of the Indian capital markets.

4. The Indian equity markets have witnessed a strong rally since 2003 with the

benchmark BSE Sensex crossing the 15,000 mark in July 2007 from 5,200 in

September 2004 and 6,600 in January 2005 setting a new historical high.


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5. As in the case of the primary markets, the primary drivers for the record level of

activity and in the secondary market have been strong economic growth and growing

corporate profitability, leading to increased international and domestic investor

interest.



each


e) P/E ratio in relation to the Floor Price: 29.34 times

f) P/E ratio in relation to the Cap Price: 33.39 times




Industry P/E:

g) Highest : 96.3

h) Lowest : 40.4

i) Average : 71.17


EPS (Rs.) P/E RoNW (%)

Edelweiss Capital 26.6 28.7

Peer group

IL&FS Investment 5.2 40.4 18.5

India Infoline 9.9 82.8 23.9

India BullsFinancial

6.9 96.3 11.1


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HOUSING DEVELOPMENT AND INFRASTRUCTURE LIMITED


1. HDIL continually identify and acquire land or land development rights. The Land

Reserves consist of saleable areas of land to which they have, or are in the process of

acquiring, title or development rights either directly, or through acquisition

agreements or letters of intent, or through memoranda of understanding.

2. Approximately 93.1 million square feet, or 82.8% of our Land Reserves are in the

Mumbai Metropolitan Region, which is the commercial capital of India and an

important real estate market. They believe that the experience in building up of Land

Reserves at a competitive cost is a significant advantage as they seek to expand their

business.

3. HDIL has established a detailed internal system for project development,

implementation and monitoring to ensure proper identification and acquisition of

potential project sites, effective and organized design and planning procedures, and

efficient procurement, construction and other execution processes in order to

complete projects on time and within budget. They believe these systems facilitate

efficient operations and ensure consistent quality across all of the projects, thereby

shortening project timelines and allowing to successfully execute complex projects.

The teams have developed relationships with, and have extensive experience in

working with regulatory authorities, as well as managing the external suppliers and

third party contractors.

4. HDIL has an established developer in the market for slum rehabilitation, which

primarily involves construction of residential buildings for slum dwellers and clearing

public and private land for development of residential, commercial, retail andinfrastructure purposes. The team has extensive experience in identifying appropriate

slum rehabilitation projects as well as working with the government authorities who

regulate these projects, issue necessary permits and approvals and monitor the quality

of replacement housing we build for slum dwellers.


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5. Since its incorporation in 1996, it has successfully completed 23 projects comprised

of approximately 11.0 million square feet of saleable area. They have never

experienced any significant quality issues nor have they ever been cited for any

material deficiencies in construction of the projects. In addition, they believe being

part of the Wadhawan Group, which has been involved in property development in

the Mumbai Metropolitan Region for almost three decades, enhances buyers positive

perceptions of the projects. As a result, they believe their projects appeal to a large

cross section of the Indian population, including the rowing middle class market for

residential properties.



each







Industry P/E:

a) Highest : 249.1

b) Lowest : 3.3

c) Average : 50.4


EPS(Rs.)

P/E RoNW (%) Sales (Rs. Inmillion)

HDIL 27.2 63.3 8488.4

Peer group

Ansal Properties 14.5 123 42.8 4998

Mahindra GESCO 3.3 160 2.1 1214.9

Parsvanath Developers 5.7 68.4 70 8364.2

Sobha Developers 11.9 83.1 96.2 8291

Unitech 2.5 443 35 16552.6


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HOUSE OF PEARL FASHION


1. They have an integrated, scalable business model with capabilities across product

design and development, manufacturing, marketing and distribution and sourcing.

They are a multinational group operating in 11 strategic locations across the world.

They have sourcing businesses in Hong Kong, China and Bangladesh, marketing and

distribution businesses in U.K., U.S., Canada and Spain, owned/leased manufacturing

facilities across India, Bangladesh and Indonesia, and strong relationships with

approximately 150 third-party manufacturing units spread across China, Bangladesh

and India.

2. They believe that their multi-location operations allow them to leverage the

competitive advantages of each location to optimize value for the customers, while

maximizing gross margins. They have developed a range of product offerings in order

to address the varied and expanding requirements of the customers. They believe, this

enables them to obtain additional business from existing customers as well as address

a larger base of potential new customers.

3. The customers include some of the worlds leading value retailers, such as JC Penny

and ASDA Wal-Mart, as well as high-end fashion brands, such as The GAP, Next

and Esprit. The management team has extensive experience in the apparel industry.

The middle management team and skilled work force comprising designers, tailors,

merchandisers and marketing personnel provide us with depth needed to manage the

growth.

4. Subsequent to the removal of quota restrictions and tariff barriers under the WTO

agreements in January 2005, China, India, Hong Kong, Bangladesh and Indonesia

have emerged as among the key countries in the Asia-Pacific region exporting to the

primary markets of United States and European Union. India is the worlds second-

largest textiles and apparel producer after China, and enjoys several advantages such


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as conducive business environment, availability of raw materials, market access and

supplier reliability.

5. The Government of India has taken various steps to boost the prospects of the textile

industry, of which the garment manufacturing industry is an integral part. Global

retailers are increasingly ranking their suppliers to identify vendors capable of

becoming strategic partners. They believe that our Group has the necessary

attributes to adapt to this evolving environment.



each


g) P/E ratio in relation to the Floor Price: 106.7 times

h) P/E ratio in relation to the Cap Price: 121.95 times




Industry P/E:

j) Highest : 23.5

k) Lowest : 7.5l) Average : 20.5


EPS (Rs.) P/E RoNW (%)

House of Pearl Fashion 4.92 9.2

Peer group

Gokaldas Exports 34.3 17.5 23.8

Celebrity Fashions 5 23.5 10.1


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1. As of January 23, 2007 the Land Reserves consists of approximately 2,298.75 acres,

representing approximately 56.63 million sq. ft. of Saleable Area. Cushman &

Wakefield opined that as on January 23, 2007, the net value of the Land Reserves was

between approximately Rs. 49,984 million and approximately Rs. 55,246 million and

after deducting the developers margin, the net present value of land was between

approximately Rs. 28,898 million and approximately Rs. 31,940 million.

2. IVR Prime can potentially gain the early mover advantage from the IVRCL Groups

experience and the ability of the management to evaluate potential locations that are

relatively undeveloped. Further it actively acquires land that may be available for salein areas in which the customers demand residential or commercial projects or in areas

in which they foresee development in the future. They are guided by the joint strategy

of focusing on rapidly growing cities such as Hyderabad, Chennai, Noida, Bangalore

and Pune and developing large residential and commercial projects within the

metropolitan areas of these cities.

3. The Company has rapidly recruited key personnel within the industry to fill the senior

management positions in the areas of operations, finance, sales and marketing,

procurement, legal as well business development and strategic planning. With

specific reference to certain common services, the company currently enjoys access to

the expertise and contacts of its parent company IVRCL. Recruitment is an ongoing

process and shall be in line with the business plans.

4. The IVRCL Groups wide ranging construction projects and network of contractors

and suppliers are important sources of market intelligence for land acquisition

opportunities for the Company. In addition, they benefit from access to IVRCLs

network of strategic alliances, as well as several discrete alliances with reputable

entities such as Bentel Associates Realty Design Consultants Private Limited and

Pioneer Property Zone Services Private Limited.


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5. In addition to their own permanent employees, they can access the personnel of the

IVRCL Group. This ensures that irrespective of the size of the project, the projects

will be adequately staffed with a highly skilled, trained workforce.



each



b) P/E ratio in relation to the Cap Price: 150 times


a) P/E ratio in relation to the Floor Price: 124.09 tim

Documents

Investors Perception Towards IPO in Selection