Satluj Jal Vidyut Nigam Ltd IPO – Apply at Cut Off

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Satluj Jal Vidyut Nigam Ltd’s (SJVNL) initial public offer (IPO) looks attractively priced at a price band of Rs 23-26 per equity share and investors can subscribe to the issue for listing gains.The IPO, which opens today, would offer a 5% discount to retail investors.

At the upper band of Rs 26, the stock is priced at 12.61 times its expected FY10(E) earnings per share of Rs 2.04 compared with the industry composite average of Rs 21.20. Also, on a price-to-book value basis, stock would trade at 1.58 times its book value of Rs 16.45 (for the first nine months of FY10). Earnings over next 3 years would not grow much as future projects would start getting operational only from 2014-2015.

However, considering the SJVNL’s strong track record, consistent operational and financial performance and lower valuations to current listed players, investors can subscribe to the stock either from long-term perspective of more than 5 years and also for listing gains.

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