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Name of the company – Browns Investments Ltd
Stated Capital (After IPO) - 1,860,000,000 Shares
No of Shares (IPO) - 50,000,000
Issuing Price – Rs 5each
Consideration - LKR 250,000,000 (250m)
Opening Date of Issue - 23 June 2011
Objectives of the Issue - To raise LKR 250 million of fund to utilized to develop a star class hotel comprising of 150 rooms in Kosgoda called Samudra Beach Hotel.
Group Structure & Main Income Sources
• 50% Stake in Free Lanka Capital Holding (Pvt) Ltd which has 51%stake in FLCH PLC (1,270m Profit for 2010/2011) & Direct ownership of 3.2% in FLCH PLC.
• 100% Stake in Samudra Beach Resort (Pvt) Ltd
• 9.9% Strategic Investment in Sierra Holding Ltd which is the parent company of SIRA PLC
Favourable facts to subscribe
• There are two subsidiaries named FLCH & HPFL under control of the Entity and FLCH currently gives Rs 0.20 of EPS (After IPO) to the entity.
• Annualized EPS is Rs 1.03.Accordingly it values at least Rs10.
• The hotel Samudra Beach Resort (Pvt) Ltd is a 100% own subsidiary of the entity and further there expects huge growth in Hotel Industry in near future.
• Last February entity has made Private Placement at Rs 5.Therefor Rs5 is most reasonable price for IPO.
Adverse facts to subscribe
.
• The hotel Samudra Beach Resort (Pvt) Ltd will start their operations in only early 2013. Therefore no profits can be expected until 2013 from the hotel.
• A considerable amount of their earnings derives from Plantation Industry (eg; FLCH).Due to wages hike it may not be profitable as last year.
• Issuing quantity is only 50m shares. Therefore higher % of allotment can not be expected.
• Hotel Investment may not be profitable compared to its estimated cost of 1500m
Recommendation
It is worth to subscribe for Browns Investments IPO Based on above favourable factors and expected it will be traded in between Rs 8-10 in the first day.
Stated Capital (After IPO) - 1,860,000,000 Shares
No of Shares (IPO) - 50,000,000
Issuing Price – Rs 5each
Consideration - LKR 250,000,000 (250m)
Opening Date of Issue - 23 June 2011
Objectives of the Issue - To raise LKR 250 million of fund to utilized to develop a star class hotel comprising of 150 rooms in Kosgoda called Samudra Beach Hotel.
Group Structure & Main Income Sources
• 50% Stake in Free Lanka Capital Holding (Pvt) Ltd which has 51%stake in FLCH PLC (1,270m Profit for 2010/2011) & Direct ownership of 3.2% in FLCH PLC.
• 100% Stake in Samudra Beach Resort (Pvt) Ltd
• 9.9% Strategic Investment in Sierra Holding Ltd which is the parent company of SIRA PLC
Favourable facts to subscribe
• There are two subsidiaries named FLCH & HPFL under control of the Entity and FLCH currently gives Rs 0.20 of EPS (After IPO) to the entity.
• Annualized EPS is Rs 1.03.Accordingly it values at least Rs10.
• The hotel Samudra Beach Resort (Pvt) Ltd is a 100% own subsidiary of the entity and further there expects huge growth in Hotel Industry in near future.
• Last February entity has made Private Placement at Rs 5.Therefor Rs5 is most reasonable price for IPO.
Adverse facts to subscribe
.
• The hotel Samudra Beach Resort (Pvt) Ltd will start their operations in only early 2013. Therefore no profits can be expected until 2013 from the hotel.
• A considerable amount of their earnings derives from Plantation Industry (eg; FLCH).Due to wages hike it may not be profitable as last year.
• Issuing quantity is only 50m shares. Therefore higher % of allotment can not be expected.
• Hotel Investment may not be profitable compared to its estimated cost of 1500m
Recommendation
It is worth to subscribe for Browns Investments IPO Based on above favourable factors and expected it will be traded in between Rs 8-10 in the first day.
