Sterling & Wilson Solar Limited IPO

Sterling & Wilson Solar Limited (SWSL) is coming out with an initial public offering (IPO) with offer for sale of 4.01-4.03 crore equity shares with face value of Rs. 1. The issue is priced at Rs. 775-780 per share and size of the issue is Rs. 3,125 crore. The objective of the issue is to carry out disinvestment of shares held by the promoter. SWSL will not receive any proceeds from the offer.

.Valuation

SWSL operates in a niche but high-growth solar industry, which has aided in a 72% CAGR in net profit over FY2016-FY2019. The company has high return ratios with lower working capital cycle. At the upper price band, the company is valued at P/E and EV/EBITDA of ~20x and ~22x, respectively, on FY2019 earnings. Considering all the above factors, SWSL’s prospects look promising for the long term.

Affle India IPO

Mobile marketing firm Affle India will open its initial public offering for subscription on July 29 and issue will close on July 31, 2019 The company is aimed to raise Rs 456.52 crore at the lower end of the price band and Rs 459 crore at the higher end of the price band of Rs 740-745 per share. Out of the total funds, the company already raised about Rs 206.55 crore from 15 anchor investors by allotting 27,72,483 equity shares at a price of Rs 745 on July 26.

Market view Aug 2019

11,300-11,100 is a very strong demand zone. The 200-DMA, which is placed at 11,130, is likely to act as strong support On the upside, 11,450-11,600 will act as a strong supply zone. Above this, a short-covering rally can be seen with Nifty heading towards 11,900. On the downside, if Nifty surrenders the 11,100 level, then things could get ugly. Although, this has a very low probability.