In an IPO, new funds are raised. This is an Admission to Listing & an Offer to Sell. Thus the current shareholders will reduce their shares in the Company by 30%.
- 63 Million shares on Offer @ 9.50 each
- Year-end 30 Sep
- Implied EPS for 2005-6 = KES 0.70 -> P/E = 13.5
- Implied EPS for 2006-7 = KES 0.83 -> P/E = 11.4
- Attractively priced at KES 9.50 (leave out any value considerations)
- Cash-flow producing firm
- Expansion to COMESA & EAC in the future
- IPOs have done well in the past year i.e. the prices have risen due to substantial demand.
- Compared to KenGen's IPO, the P/E is much higher thus any rise in the post-IPO price will be moderate
- The market for the core manufactured product (D cells) is shrinking
- Multiple lawsuits for health-related ailments
- NAV = KES 1.66/share (Where are those MPs who could not fathom "intellectual property values"). NAV values are tricky to calculate due to assumptions & accounting rules.
- Less enthusiasm for an IPO this close to the holidays. IMHO, Kenyans generally prefer performing tasks at the last minute!
Working on it! Check back later