New Delhi, Aug 23: SQL Star International has been listed on the Delhi Stock Exchange at a 98 per cent premium to the IPO offer price. While the shares were offered at Rs 55, the stock closed at Rs 109 on Monday. During the day, the counter saw some frenzied buying from intitutional investors and the stock peaked a high of Rs 130. Lured by the excellent exit opportunity at Rs 130 (which is a 136 per cent return over the offer price), some investors have booked profits. As a result, the stock touched its day's low of Rs 105 and later on, some buying saw the scrip recovering to Rs 109.Buying interest at the counter was reflected by the fact that as many as 4.9 lakh shares were traded during the day. The counter saw 38 transactions and the average transaction was for around 13,000 shares which reflected the intitutional interest at the counter.
SQL Star will be listed at the Bombay and Hyderabad stock exchanges on Tuesday, according to a senior official of the company. The institutional interest at thecounter was expected as there was no reservation for FIIs/banks/FIs/MFs. Also, the retail investors got a sizeable chunk of shares on allotment. The investor response to the Rs 14.3-crore IPO from SQL Star International was an overwhelming 20.3 times.
Besides the current software IPO boom, the issue was priced at an attractive premium of Rs 45. Nevertheless, the company had demanded only Rs 25 on application and the balance of Rs 30 had to be paid on allotment. The shares were offered at an attractive price-earning multiple of Rs 11.98 (based 1998-earnings). The stock is currently quoting at a price-earning multiple of 23.74 times.
The public issue had no reservation for institutions and not even for the company's employees. The company had offered 26 lakh shares to the public.
On expanded paid up capital of Rs 10.4 crore, promoters stake is reduced from 44.53 per cent to 35.27 per cent, financial institutions/investment institution's from 45.07 per cent to 32.28 per cent and public holding is 27.16 percent.
For the year ended December 31, 1999, the company is projecting sales of Rs 37.07 crore against Rs 18.57 crore achieved in fiscal 1998. The projected net profit is Rs 6.13 crore against the figure of Rs 1.36 crore in 1998. If the company achieves the profitability projections, the stock should enjoy a higher discounting. The company tapped the market for part-financing a Rs 25.25-crore project.
The company is in the process of setting up offshore development facilities at Hi-tech city in Hyderabad, setting up developing centres at USA and Singapore, setting up of ERP consulting facilities at Hyderabad and setting up education centres at Hyderabad, Pune, Bangalore, Mumbai, Chennai and Singapore.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
Printer-friendly page