Naukri IPO Oversubscribed 15.65 Times; What Analysts Recommend?

At the end of third day, Naukri IPO has been oversubscribed 15.65 times. It’s still dominated by QIBs. Tomorrow, November 2, is the last day. Meanwhile I did some Google search to find recommendations. Here are some:

Let’s look at what some analysts say about the IPO.
Keynote Capital suggests one can apply for Naukri stock for medium term gains. It says: “The valuation in our view looks stretched at 45.2x FY07E and 33.1x FY08E earnings. It is also higher than that of the larger global peer Monster. However, the company is in the high growth phase with its plans to diversify into providing online classified services in new market segment. We therefore feel investors may subscribe to this IPO with a medium term perspective.”
Express Money says: Only for a long stint. The IPO price at Rs 290-320, a PE of 59.6-65.7 on 2005-06 earnings seems to build in such tall expectations. Assuming revenue growth of 50 per cent and a robust margin of 30 per cent, the net profit of Info Edge should be around Rs 30 crore in 2007-08, which gives a PE of 26.4-29.1 on the issue price. That makes for a long-term investment.
Business Standard: It says valuations are reasonable. “Monster’s enterprise value stands at $5.18 billion while its EV/Sales is at 4.76. Rediff.com’s EV is at $470 million while its EV/Sales is 34.3.
Info Edge’s market cap will stand at $188 million (Rs 850 crore) at the higher end of the price band and Rs 770 crore at the lower end. Its EV to sales would work out to 5.7 or 5.2 at the higher and lower price band levels. If the numbers of Rediff.com and Monster are a benchmark to go by, then Info Edge’s numbers and valuation look reasonable.”
The Hindu Business Line: It says “invest at cut-off” (Rs 290). Investors with a high-risk appetite can consider taking an exposure in the book-built initial public offering of Info Edge. For an early stage venture, the IPO is stiffly valued. Bidding at the cut-off price will be prudent, as investors will remain eligible to participate even if the final offer price is fixed at a lower level. Also considering the overall competitive risks, an offer price fixed at the lower end of the price band would be more comforting.

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