As soon as we read this,
we had a feeling of Déjà vu…
Déjà vu, according to Wikipedia, is the phenomenon of
having the strong sensation that an event or experience currently being
experienced had been experienced in the past.
You must be wondering why?
The reason is…
2008 – Reliance Power’s IPO – About 2 Billion
Dollars – Sensex near All Time High
2013 – NTPC’s Offer For Sale – About 2 Billion
Dollars – Sensex near All Time High
 |
| Power Stocks : Deja Vu?? |
Striking similarities, isn’t
it? Both companies belong to power sector, both are coming out with almost
equal offer sizes and markets in both cases are trading near all time highs.
But similarities end here
and there are some marked differences too:
- In 2008 (Jan-Feb), Sensex was trading at multiples of 24x. As of today (Jan-Feb 2013), Sensex is closer to 19x.
- Reliance Power did not have any assets at the time of IPO (2008). On the other hand, NTPC (2013) has an installed capacity of about 40,000 MWs.
Disclosures:
No positions in Reliance Power or NTPC.
______
a bit of correction is better. the market has run up too much. it will give us options to buys some good companies at cheaper prices.
ReplyDelete@ae7a067f6150aae4cf74497821ddaa95:disqus
ReplyDeleteOfcourse. We would love if markets corrected in near future. This, as you rightly pointed out, would give us great opportunity to buy some great stocks at reasonable valuations.
So,
Let there be a correction. Amen. :-)
there type of mega IPO sucks liquidity from mkt
ReplyDelete@kedu
ReplyDeleteTrue. Mega IPOs do remove liquidity from markets.