RDB Rasayans Ltd Reviews and Recommendations as Follows,
On the lower end of the price band of 72, the stock is priced at pre-issue P/E of 52.77x on its FY11 EPS of 1.36. Post issue, the stock discounts its FY11 EPS of 1.02 by 70.74x. Looking on to P/B ratio at 72, the stock is priced at P/B ratio of 5.32x on the pre-issue book value of 13.53 and on the post-issue book value of 30.16, the P/B comes out to 2.39x.
The company is present in a highly commoditized and competitive industry. The company operates on very thin margins and is dependent upon a few large customers and suppliers. On a post-issue P/E multiple of 77.61x, the issue seems to be very aggressively priced and more than fully captures the future growth potential of the company, if any. AVOID.
