Don’t ThinkHard about ThinkSoft Global Services’s IPO at Rs 120-130…Ignore it

Thinksoft Global Services,a Chennai based financial software testing service  is seducing you with a bookbuilding IPO in the band of Rs 120-Rs 130….Issue opens today and closes two days hence on Thursday,September 24,2009

Don’t ThinkHard on ThinkSoft !…ignore the Issuethis issue clearly is an exit route for an existing shareholder

The IPO is for 36.46 lakh shares…of which just one-third, 13.50 lakh shares are a fresh issue,while two-thirds, 22.96 lakh shares are being offered for sale by the Gibraltar based Euro Indo Investments…so the Company would get just Rs 17.55 crs at the top end price of Rs 130 to fund a planned 400 seat facility in the Madras Export Processing Zone…..while an existing shareholder would pocket Rs 29.85 crs while offloading 90% of it’s stake held in Thinksoft Global Services

ICRA has rated the IPO as Grade 2,indicating below average fundamentals

I’m taking both,the rating agency ICRA and the selling shareholder Euro Indo Investments, at face value here and not even going into the Company Fundamentals and IPO Pricing  

 

2 thoughts on “Don’t ThinkHard about ThinkSoft Global Services’s IPO at Rs 120-130…Ignore it

  1. Hi Gaurav,

    It is very good to see this warning which surely came out as predicted. The stock price has stayed at below 100 levels since then.

    What do you think about the company’s valuations now?

    The stock does have a very good dividend yield, and is at a TTM-PE of below 4. Return on equity is also pretty good (above 30%), the recent results have been pretty good and the company has stayed debt free.

    [Disclosure: Don’t hold the shares, just studying it].

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