Wonderla Holidays, one of the largest amusement park operators in India, is entering the capital markets through initial public offering (IPO). It has set price band between Rs 115 and Rs 125 a share. The issue will constitute 25.66% of the fully diluted post issue paid up equity share capital of the company. The issue will close on Apr. 23, 2014.
Commenting on the IPO, SP Tulsian, independent analyst, said, ''Fundamentally, based on the valuation multiples the issue looks attractively priced. One can apply in the issue. However, be prepared for strong operator play! The company has an established presence in South, which will be expanded further in the same region. Besides near debt-free status and high profitability levels, company's parks enjoy good customer reviews. Once Hyderabad Park gets operational in FY17, both revenues and net profit will be augmented."
While Motilal Oswal Securities said, ''We would recommend to apply in the IPO in the retail category. Small issue size could see significant oversubscription. Post issue performance will be subject to overall market conditions. An ideal issue for LT investors as we expect stock to double over next 4 years."
CRISIL Research has assigned IPO Grade ''4/5'' to the proposed initial public offering (IPO) of Wonderla. The grade indicates the fundamentals of IPO are 'above average' relative to other listed equity securities in India. Wonderla's grade is supported by healthy operating margins, strong cash flows and an average RoCE of 40.1% over the past three years. It also takes into account a highly experienced top management and a strong second line.
CRISIL Research believes given the paucity of entertainment avenues in India, a large population of youth and increasing spend on leisure and entertainment owing to rising income levels, prospects of the domestic amusement park industry are bright.
Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.