BCB Finance IPO – Exit On Listing Day

BCB Finance is expected to list tomorrow on the BSE-SME Exchange. Our Advise to readers is to book profit (if subscribed) and exit the counter as we don’t have confidence in the company.

In our IPO analysis we had clearly recommended an Avoid. Our reason for the same was its muted past financial performance, credibility of its weak management and low operational capabilities. Also the valuation of the company is very high and remains a matter of great concern. On a Post issue basis adjusted EPS for FY11 stands at Rs 0.19 which discounts the issue price of Rs 25 at a PE of 131x. When compared to the Industry average of 11.50x its valuation seems astonishingly high.

Finally, there may be a steep fall in the price after listing which could destroy the wealth of the investors. Hence, keeping all the above in mind we recommend investors to exit the counter.