This Bangalore based developer shall be offloading 9,476,800 equity shares of 10/- each face value (13% of the diluted stake) for a price band of 550-640 from 23th to 29th of Nov-06.
Shobha developers have constructed many prominent buildings that stand in the landscape of Bangalore and PNC Menon (chairman) seeks to raise the funds to go for land acquisition in and around Bangalore.
I did not get a chance to analyze its balance sheet in detail, but my first opinions are as follows:
1) It is a Bangalore based construction agency. Considering the cyclical nature of the industry and the fact that shobha is confined to one geographical location, I perceive it might be a risky venture.
2) The price-band is just right. So I do not expect substantial listing gains. In fact if one has patience they might pick up their shares in the open market (over next 3-4months) at under 600. But for a Medium term (1-3years) this company looks like a good bet.
1) For those who do not wish to miss the boom in Bangalore real estate, but do not have 50-60 lakhs to invest in a top property, investing in stocks of the leading developer is a very good option.
2) If Shobha advertises it plans to go to Chennai/ Mysore, there should be a big jump in the evaluation and risk mitigation. Investors stand to witness considerable appreciation of value in such a circumstance.
3) Their goodwill and long standing might make them very attractive for foreign partners who would like to seek collaboration when the construction market opens up for MNCs.
Best review at moneycontrol
According to their calculations. The land value held by the company itself exceeds 600/- per stock. Not to mention the value addition to it when the land is converted to a high rise tower. I will put it in a low risk IPO stock which can be comfortably held till it hits 800/- or elapsing of 12 months (which ever is earlier.)