MOIL IPO–A Superhit you should not miss !

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[Guest Post by avid trak.in reader – Altaf Khan]

Today (1st December) is the last day of MOIL IPO. If you have still not subscribed, please DO it today. It is one of the rare issues which promises to be a super hit and promises good listing gains to the Subscribers.

MOIL_Manganese_ore

As of 30th November the total oversubscription is 29 times. That means it is going to be a big success.

However here are some of the facts about this IPO.

QIB portion (for Institutional investors like LIC, mutual funds, foreign investors) oversubscribed 50 times. That means the listing day gain will be huge as they will lap up what ever is there on table on listing day. Retail portion is oversubscribed 11 times by today and by tomorrow the expected over subscription will be 20-25 times.

But what you have to note is, only 9 times oversubscription is at cut off price. 2 times oversubscription is at lower end and their applications will be rejected.

MOIL LIMITED IPO Subscription Numbers

Sr.No. Category No.of shares offered/reserved No. of shares bid for No. of times of total meant for the category
1 Qualified Institutional Buyers (QIBs) 16464000 809312438 49.16
1(a) Foreign Institutional Investors (FIIs)   308886311  
1(b) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)   428630911  
1(c) Mutual Funds   69127032  
1(d) Others   2668184  
2 Non Institutional Investors 4939200 43312379 8.77
2(a) Corporates   21568563  
2(b) Individuals (Other than RIIs)   10558479  
2(c) Others   11185337  
3 Retail Individual Investors (RIIs) 11524800 125150362 10.86
3(a) Cut Off   102555764  
3(b) Price Bids   22594598  
4 Employee Reservation 672000 136119 0.20
4(a) Cut Off   132039  
4(b) Price Bids   4080  

Updated as on 30 November 2010 at 1900 hrs

Here is the news :

Retail portion garnering subscription of 10.86 times with bids for 125,150,362 equity shares against the offer of 11,524,800 equity shares. The Retail Portion has received bids for 102,555,764 equity shares (9 times over subscription) at cut-off price and bids for 22,594,598 (2 times oversubscription) equity shares through price bids.

So we can consider by tomorrow retail successful applications will be around 20 times.

A 20 times oversubscription means, allotment of 5% of application shares. So if you have applied for a full 500 plus shares, approximately you will get 25 shares allotment.

The grey market premium in Bombay today is 250. That means on first day of listing the shares will be around 600-650. That means if you sell at 650+, you will have a profit of 300 per share. That means a total profit of 7,500 per one full subscription of 500+ shares.

However the above figures may change depending on final day retail oversubscription. I assumed a oversubscription of 20 times. If it gets oversubscribed 50 times as some people say, we get less allotment. May be only 10 shares. In that case the total profit will be less but the listing price may even go up to 700 or more also.

So wait for tomorrow total oversubscription particularly in retail portion. Lets pray tomorrow very few people subscribe.

Some of my views about long term holding of MOIL share.

In my view it is waste to hold MOIL for long time. This is based on the company news. At the moment they are just increasing mining (that means more tonnage… that’s all)

Their value addition (JV with SAIL, RINL for special steel) by way of plants will come up only in 2014. Till then it will be year on year normal growth only.

Compare this with CIL strategy : CIL plan to have washeries to add value immediately. By 2015, they plan to have more than 100 washeries which will be coming up gradually every year. Also they are linking their price to international prices by e-auction. So immediate business will be more.

So people wanting to get benefit from MOIL should get only during listing. DII and FII will hold the stock anyway.

Are you Subscribed to MOIL IPO ?

  1. Viral says

    Altaf,

    Nice to see you here.

    You’ve said that if over-subscription is above 50 times (so it has turned out to be) only 10 shares could be alloted. But, I would like to draw your attention to the fact that usually companies issue shares to the extent of at least one minimum lot i.e, 17 shares in case of MOIL.

    Hehe!… above was just my 2 cents to your wonderful article :)

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