The price band of PG Electroplast has been fixed at 190-210 a share. But the experts as well as all the brokerage firms feel that the issue price has been overvalued. Majority of people have advised investors to avoid investing in the IPO of PG Electroplast. Experts say that investors should be cautious while investing in the IPO due to the market uncertainty. One should wait till the stock gets listed and then wait for the stock to stabilise, after that one can invest in the stock at a safe level. It is a good company with growth prospect though.
One of the major investment advisors SP Tulsian said that the stock doesn’t even desrve to be priced at Rs. as fair value. The company has been making electronic products like colour TV and CCTVs, etc. Financial performance of PG Electroplast was not good and all the agencies who are connected with the issue whether it is call on book running lead manager or the marketing agency all have indicated concerns regarding the issue.
The PE multiple of the company was not looking promising and the companies Videocon and Zicom which are in same sector and are ruling this space also don’t have great PE multiples. They all have a PE multiple of around Rs 5-6. Though the company has some growth prospects it currently seems to be over priced and uncertain. The company is aiming to raise around Rs. 109-120 crore through the issue and use the money for prepayment of the portion of a term loan.
Bell The Bull says be careful while going for the IPO of PG Electroplast due to the negative vibes