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Investing IPO

Vishal Retail Ltd

This company is going for an IPO at a price band of 230 – 270 in a lot size of 25 share. I strongly recommend the readers to apply to this IPO.
1) Retail sector is in a boom period. It is going to be the next best thing.
2) Vishal targets value retailing… which unlike other listed retail companies makes it unique, more competitive and better positioned to face the MNC onslaught.
3) The company is very aggressive. It has 50 stores across 18 states and has plans for 80 more stores to make it a truly pan-india brand. It started as a ready-made garment retailer, but has diversified itself to a full fledged retail network.
4) I never recommend investing in a company whose products you would not like to buy. And for the bargain hunters Vishal is just the right place.

Valuations:
1) With a EPS of 20, the share should be alloted at an PE of about 13.3 which makes it 3 times more attractive to other retail chains like Trent, Pantaloom and shopper’s stop, which trade at a PE of 40+.
2) The sales of the company is 1130.7 (and doubling each year) which makes it bigger than Trent and Shopper’s Stop.

I feel a combination of aggressiveness and a boom would make a good investment opportunity.

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