Anu’s Lab IPO Review & Recommendation - Avoid

May 12, 2008

Anu’s Laboratories Limited IPO Recommendation

Public Issue Open: May 12, 2008 to May 15, 2008
Public Issue Price: Rs 200/- to Rs 210/-
Price Earning Ratio at upper band: 14.50
Price Earning Ratio at lower band: 13.81

Anu’s Laboratory was incorporated in the year 1996 for manufacture of Bulk Active Pharma Ingredients and Intermediates for drug molecules.

The financial indicators of Anu’s Lab (not of other group companies) are good. The company is growing, increasing sales and profits and also increasing its profit margins. Returns on Networth and returns on capital employed are very good.

On the other hand, Anu’s Lab is a small company and present into a commodity business which makes this issue very risky. Since Anu’s Lab has a decent financial profile there are chances that it might list with a marginal listing gain. But the chances of this happening are very slim. Price earning multiple of around 15 and price to book of around 4 is too high a price to pay for Anu Labs.

We recommend to avoid the issue.

For detail analysis please visit following link:
http://chittorgarh.net/t/11633482/673745/206845998/2/

Discuss this review at:
http://chittorgarh.net/t/11633481/673745/206845998/2/

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Posted in IPO