Market Capitalisation per MW of solar power is Rs 127crs
The company had come out with its public issue for 50 lac shares in a price band of Rs 180-186. The company listed on Thursday the 20th of October and we saw how the share price rose from the low of the day to the high and almost trebled in the process. Today was no different where the share price rose from the low of the day of Rs 254.05 on the BSE, which incidentally was the down circuit filter for the day at around 1.30 pm and then began rising all the way to the upper circuit of Rs 381.05. The close was Rs 380.
The price movement can be very clearly seen from the above intraday chart on the BSE. The stock has moved very strongly in the last couple of hours but the volume has reduced. The delivery percentage has fallen to just about 1% of the traded volume which was 2.7 cr shares, and the delivery volume a mere 2.7 lac shares.
| TIME | OPEN | HIGH | LOW | CLOSE | VOLUME | WTD AVG |
| 930 | 350.00 | 350.00 | 297.65 | 326.35 | 868340 | 316.95 |
| 1000 | 326.35 | 330.00 | 310.80 | 321.00 | 978326 | 319.62 |
| 1030 | 321.00 | 344.05 | 320.35 | 322.55 | 1362403 | 333.39 |
| 1100 | 322.55 | 324.95 | 297.80 | 302.20 | 1325182 | 306.76 |
| 1130 | 302.20 | 309.00 | 301.60 | 302.85 | 431709 | 304.53 |
| 1200 | 302.85 | 320.70 | 285.15 | 317.00 | 1310569 | 298.88 |
| 1230 | 317.00 | 348.40 | 312.60 | 324.00 | 1994987 | 329.49 |
| 1300 | 324.00 | 326.50 | 290.00 | 291.70 | 1121987 | 310.72 |
| 1330 | 291.70 | 303.00 | 276.20 | 302.35 | 1144553 | 291.12 |
| 1400 | 302.35 | 348.00 | 290.70 | 330.00 | 1827080 | 318.42 |
| 1430 | 330.00 | 378.90 | 330.60 | 362.65 | 1548210 | 361.58 |
| 1500 | 362.65 | 372.90 | 359.40 | 369.90 | 548605 | 366.62 |
| 1530 | 369.90 | 382.10 | 368.15 | 382.10 | 435441 | 379.00 |
The above is a chart of half hourly trade on the NSE and one can see how the share has turned around from 1.30 pm. The average for the half hour had fallen to Rs 291.12 with the low for the period being 276.20 and then the price rose to touch the upper circuit of Rs 382.10.
What is M&B Switchgear?
It’s an intriguing company from the name perspective. It manufactures transformers from its factory in Indore and had revenues of Rs 34 crs for the year ended March 2011, of which roughly Rs 3.38 crs or 10% were traded sales. The net profit of this company was Rs 77.48 lacs, which means the EPS was Rs 0.39 and the asking PE for the share was a staggering 480 times.
The money raised was for the purpose of setting up 4 MW solar power project which would cost the company roughly Rs 66-68 crs. They have raised Rs 93 crs for this project. Their contribution to the company where they own 75% of the company is that they are in the process of setting up a 2 MV solar project with their resources which include a term loan of Rs 22.5 crs. It sounds quite odd that the company is raising Rs 93 crs in total for the issue where the amount that would be spent for this diversification for the total project is roughly the same and the term loan seems additional. The PE which was 480 is now 1000.
Look at the dynamics of the solar business. Moser Baer which has been there in this business doing the complete value chain where he makes the cells and the panels and is also in the power business has not made money in the last four years. Would it be fair to expect this promoter with no experience, and a market cap of Rs 760 crs or roughly Rs 127crs per MW which costs Rs 16 crs to deliver?
Dear readers I leave it at that and hope that people do not get carried away.
