Engro Foods have announced their IPO’s, what do you think why one should or shouldn’t get them?

Question

Well, I need justified answers.. I’m too confused in making a decision, coz they are offering it at Rs.15 premium i.e. Rs 25…
Now I had opinions of two different school of thoughts 😛 some ppl say when they’ll open up for trading in the share price will definitely go down and some say vice versa…and both provide good and valid justifications… ab mein kis ki sunon ya??? :O:O
What you guys have to say about this? ANy advice, any suggestion…

Shahroz 124 views

Answer ( 1 )

  1. Engro Foods is a wholly owned subsidiary of Engro Corporation. Market sources say that the issuers to the offer and accountants are currently working on the price at which the IPO would be floated in the market.

    A person in the knowledge of the upcoming event said that the stock in Engro Food would clearly be offered at substantial premium. Investment of the parent in food subsidiary at Sept 30, 2010 stood at Rs5.420 billion.

    “The fast moving consumer goods (FMCG) is a rapidly growing industry, which generally is able to incorporate inflation in the selling prices, which keeps its profit forecasts on track,” said a sector analyst.

    He observed that the IPO could be a harbinger of good tidings for the new listings at the stock exchange this year.

    For Engro Corporation, the cash that it would be able to raise through the offer of food subsidiary shares would help reduce debts and secure capital gains that would add to the company’s profitability. Engro foods posted turnover for nine months ended Sept 30, 2010 at Rs15 billion, 42 per cent up from Rs10.6 billion in corresponding period of the previous year. The subsidiary earned profit of Rs35 million for the nine months.

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