Autoline IPO closes today
Looks like a good issue w.r.t valuations and its a company operating in an interesting space. A space with stiff competition of course ! Way too many players.
The projected risk by some analysts is the fact 85% of Autoline's revenue comes from Tata motors. Well, one way of looking at it is to say that Autoline has a phenomenal dependency on Tata Motors for its survival. But, a broader look at the same will reveal the fact that its a strong mutual dependency. Autoline is the only company currently producing the required accessories for Tata's Ace Mini truck ! A hit product from Tata Motors.
The issue seems to have received a cold response for the first 3 days, thanks to negative market sentiments. However, the issue got oversubscribed on Thursday, current 2.33 times (overall). I expect this value to cross 20 by end of the day.
Inspite of my awful luck, I have decided to apply for 45K (200 shares). My fingers are numb, I have been keepin em crossed for too long !
3 comments:
In the age where business ties snap or forge before you can say 'Hang-man', how long can Tata keep alive the mutual dependency?
Autoline may want to enter the markets keeping this fact in mind :-)
In the end, a hit or miss in IPO is all about liquidity and sentiment.. its like the college guy partying on new year's eve and wanting to forget there's an exam the next day
Agreed Dude! But I have no plans of holding it for the long term (at least as of now). It would be fair to say that there is at least a 90% probability that Tata Motors won't dump Autoline, before it lists (3 weeks from now).
Another point of view, you are missing is that, if the company is listed, it gets more visibility at least w.r.t its finances and functioning. Now, isn't that a good thing for Tata too !
Lets see, as you said, its all about liquidity and sentiments.
No no no.. I never contested the fact that Autoline is bad.
What I meant was that these days any tom dick and auto-dick can make millions for itself and others thru IPOs.
This one may have good fundas but during a downturn even a DLF is not spared. With the demand this one has seen means atleast a 20% on D-Day, so as long as one makes profits, let it keep coming :-)
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