JOIN USAdlabs Entertainment (AEL) has hit the market to raise around Rs 467 crore through an initial public offering of 2.03 crore shares at the higher end of the price band.
Analysts certainly seemed to have liked the business model and the prospects of the company with most of them recommending subscribing to the issue.
“While it is yet to turn profitable, Adlabs demands a discount on EV/CE basis when compared to domestic and global peers. We assign a SUBSCRIBE rating to the IPO,” Emkay says.
“The loan repayment will help lower interest outgo while surplus land of 170 acres and diverse revenue streams offer enough incentives for a long term investor to subscribe to the IPO. We recommend SUBSCRIBE to this issue,” ICICI Securities says.
“Though the issue appears expensive prima facie, we observe that we are comparing AEL’s first year of operation (six month full operation of theme park) with performance of established companies. We opine that AEL would have higher potential for growth and thereby faster improvement in profitability due to operating leverage as compared to global peers due to which we recommend a SUBSCRIBE to the issue for long-term horizon,” IndiaNivesh said in a note to its investors.
Domestic brokerage firmMotilal Oswal however believes that upsides to the stock are unlikely due to which it recommends an avoid on AEL inital public offer (IPO).
Meanwhile, Adlabs Entertainment has finalised allocation of 27,22,135 shares to anchor investors including Daiwa India Stock Active Mother Fund, HDFC Infrastructure Fund, Axis Mutual Fund, L&T Mutual Fund and IL&FS Trust Co (Forefront Alternative Equity Scheme) at Rs. 221 per share aggregating to Rs 60.16 crore.