Buy Syngene

Company Background :

Syngene is one of the leading contract research organizations in the country offering a suite of integrated, end-to-end discovery and development services for novel molecular entities across industrial sectors including pharmaceutical, biotechnology, agrochemicals, consumer health, animal health, cosmetic and nutrition companies. The company offers services through flexible business models that are customised to client’s requirements. These range from a full-time equivalent to a fee-for-service model, or a combination thereof.

Syngene delivers its services through a combination of scientific talent, globally accredited systems and R&D infrastructure. At the end of FY15, its tangible fixed assets (gross block) were Rs 931 cr. the company’s laboratory and manufacturing facilities located in Bengaluru are spread over more than 9 lakh sq. ft.  As of May 31, 2015, the company had 2,122 scientists, including 258 Ph.Ds. and 1,665 scientists with a Master’s degree.

Recommendation :

Investors with long time horizon of holding for more than 12 months should consider adding this scrip to their portfolio.  Buy on a weak days around Rs.350 levels and hold for a target of Rs.525

Smart Investor

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NHPC IPO

Virtually flagging off the government’s disinvestment effort, the empowered group of ministers (eGoM) on Friday met to finalise the price band for NHPC’s initial public offering (IPO), which will happen simultaneously with the disinvestment process. The eGoM has suggested a price band of Rs 30 to Rs 36.

The lead managers for the offer — Enam Securities Private, Kotak Mahindra Capital Company and SBI Capital Markets — had suggested a price band of Rs 25 to Rs 30. The disinvestment by the government will piggyback on the IPO, as was the case with NTPC several years ago. The response to this entry into the capital markets will be closely watched as the government’s future disinvestment plans will be determined by it.

The public sector infrastructure company will issue 10% of its new equity shares in the public offer while the government will divest its 5% stake in the company. NHPC plans to raise Rs 1,670 crore fresh equity through the IPO and plans to bring 167 crore shares of face value of Rs 10 each, which would be offered at a premium to be decided through book-building process.

The group, comprising finance minister Pranab Mukherjee, power minister Sushilkumar Shinde and deputy chairman, Planning Commission, Montek Singh Ahluwalia, were constituted to fix the price band. Proceeds from the NHPC issue are expected to be moved to the National Investment Fund (NIF), since it is unlikely that the Cabinet would have taken a decision on the fate of NIF by the time proceeds from the offer come in.