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INITIAL PUBLIC OFFERING: DUKE FASHIONS Presented by: Jaisna jaswal MBA 2(C )
Introduction
Introduction to Duke Fashions (India) Ltd ,[object Object],[object Object],[object Object],[object Object]
Awards and Rewards   ,[object Object],[object Object],[object Object]
[object Object],[object Object],Initial Public Offering (IPO)
[object Object],[object Object],[object Object],[object Object],Types of IPO’s
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Entry requirements for an issuer to make an issue/offer to public
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Procedure of Issuing Shares
10) Printing and distribution of prospectus and application forms 11) Pricing 12) Promoters contribution and lock-in-period 13) Underwriting 14) Mandatory Collection Centres 15) Certificate relating to promoters’ contribution 16) Coordination with the bankers to the issue 17) Minimum subscription 18) Allotment of shares 19) Filing of other Forms with Registrar of Companies 20) Refund orders 21) Issuance of share certificates
Review of Literature
Author Year Findings Kim and Ritter  1998 Use of accounting information in conjunction with comparable firm multiples are widely recommended for valuing initial public offerings (IPOs). Dunbar 1999 examined the effect of several factors on the market share of investment banks that act as book managers in initial public offerings (IPOs).  Herbst, Lin and Pantzails  2001 Valuation of the pre-IPO startup companies is of crucial importance to venture capital providers.  Bartov and Mohanram 2002 Cash flows, sales, and sales growth are significantly related to offer prices Deloof, Maeseneire and Inghelbrecht  2002 Discounted free cash flow was the most popular valuation method among various methods used by lead underwrite for estimating stock value.
Author Year Findings Hand 2003 IPO valuation is positively and linearly related to the pre-income book value of equity. Pastor and Veronesi  2003 IPO waves are preceded by high market returns, followed by low market returns, and accompanied by high stock prices. Purnanandam and Swaminathan  2004 IPO are not undervalued rather overvalued at the offer price relative to valuation based on industry peer price multiple. Yeh, Shu and Guo  2004 investigated the effect of ownership structure on IPO valuation in the Taiwanese market.  Roosenboom 2007 Underwriters base their choice for a particular valuation method on firm characteristics, aggregate stock market returns and aggregate stock market volatility in the period before the IPO.
Scope Need Objectives of the study and
Need of the study ,[object Object],[object Object],[object Object],Scope of the study The scope of the present study was limited to Duke Fashions (India) ltd, Ludhiana.
Objectives of the study ,[object Object],[object Object],[object Object],[object Object]
Methodology Research
Research Design ,[object Object],Data Collection and Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
Finding  Study of the
Duke Valuation
Book Value or Net Asset Value  The fair price of the Duke share from Book value is Rs. 858.66. Net Worth March 2009 (in Cr.) Ordinary share capital 1.50 General reserve 5.50 Other reserves 0.13 Surplus in P&L a/c 4.75 Deffered tax liabilities 1.00 Total 12.88
Discounted Cash Flow (DCF) ,[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],WACC  =    Cost of Equity + Cost of Debt =   12.54% 2009 2010 2011 2012 2013 2014 Expected Growth Rate 25% 25% 25% 25% 25% FCF 4,40,65,189 5,50,81,486 6,88,51,858 8,60,64,822 10,75,81,028 13,44,76,285
[object Object],The fair value of share from DCF method is Rs. 407 approx 2010 2011 2012 2013 2014 Free Cash Flow 5,50,81,486 6,88,51,858 8,60,64,822 10,75,81,028 13,44,76,285 Discount rate 1.1254 (1.1254)² (1.1254)³ (1.1254) 4 (1.1254) 5 Present value 4,89,43,919 5,43,62,803 6,03,81,645 6,70,66,871 7,44,92,260
Financial Analysis of Duke Fashions (India) Ltd from 2006 to 2009
Current Ratio
Quick Ratio
Absolute Liquid Ratio
Inventory Turnover Ratio and Conversion Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Cost of goods sold 37.80 53.19 64.01 Average inventory 5.88 7.435 8.56 Inventory turnover ratio 6.43 7.15 7.48 Inventory holding period (in days) 57 days 51 days 49 days
Debtor’s Turnover Ratio and Average Collection Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Net credit sales 48.49 68.46 82.98 Average debtors 7.70 9.725 11.92 Debtors turnover ratio 6.30 7.04 6.96 Debtors collection period (In days) 58 52 52.5
Creditor Turnover Ratio and Average Payment Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Net credit purchases 32.30 46.31 53.94 Average creditors 3.545 5.345 7.71 Creditors turnover ratio 9.11 8.66 6.70 Creditors payment period 40 42 54.5
Working Capital Turnover Ratio
Debt Equity Ratio
Proprietary Ratio
Solvency Ratio
Gross Profit Ratio
Net Profit Ratio
Operating Net Profit Ratio
Return on Shareholders’ Equity
Trend analysis of net profit earned by Duke Fashions (India) ltd 0 0.5 1 1.5 2 2.5 3 2005 2006 2007 2008 2009 Net Profit Trend Value
Trend analysis of sales of Duke Fashions (India) ltd 0 10 20 30 40 50 60 70 80 90 2005 2006 2007 2008 2009 Sales Trend Value
Conclusion
Recommendations
[object Object],[object Object],[object Object]
[object Object],[object Object]
 
Query

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ppts of project

  • 1. INITIAL PUBLIC OFFERING: DUKE FASHIONS Presented by: Jaisna jaswal MBA 2(C )
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8.
  • 9.
  • 10. 10) Printing and distribution of prospectus and application forms 11) Pricing 12) Promoters contribution and lock-in-period 13) Underwriting 14) Mandatory Collection Centres 15) Certificate relating to promoters’ contribution 16) Coordination with the bankers to the issue 17) Minimum subscription 18) Allotment of shares 19) Filing of other Forms with Registrar of Companies 20) Refund orders 21) Issuance of share certificates
  • 12. Author Year Findings Kim and Ritter 1998 Use of accounting information in conjunction with comparable firm multiples are widely recommended for valuing initial public offerings (IPOs). Dunbar 1999 examined the effect of several factors on the market share of investment banks that act as book managers in initial public offerings (IPOs). Herbst, Lin and Pantzails 2001 Valuation of the pre-IPO startup companies is of crucial importance to venture capital providers. Bartov and Mohanram 2002 Cash flows, sales, and sales growth are significantly related to offer prices Deloof, Maeseneire and Inghelbrecht 2002 Discounted free cash flow was the most popular valuation method among various methods used by lead underwrite for estimating stock value.
  • 13. Author Year Findings Hand 2003 IPO valuation is positively and linearly related to the pre-income book value of equity. Pastor and Veronesi 2003 IPO waves are preceded by high market returns, followed by low market returns, and accompanied by high stock prices. Purnanandam and Swaminathan 2004 IPO are not undervalued rather overvalued at the offer price relative to valuation based on industry peer price multiple. Yeh, Shu and Guo 2004 investigated the effect of ownership structure on IPO valuation in the Taiwanese market. Roosenboom 2007 Underwriters base their choice for a particular valuation method on firm characteristics, aggregate stock market returns and aggregate stock market volatility in the period before the IPO.
  • 14. Scope Need Objectives of the study and
  • 15.
  • 16.
  • 18.
  • 19. Finding Study of the
  • 21. Book Value or Net Asset Value The fair price of the Duke share from Book value is Rs. 858.66. Net Worth March 2009 (in Cr.) Ordinary share capital 1.50 General reserve 5.50 Other reserves 0.13 Surplus in P&L a/c 4.75 Deffered tax liabilities 1.00 Total 12.88
  • 22.
  • 23.
  • 24.
  • 25. Financial Analysis of Duke Fashions (India) Ltd from 2006 to 2009
  • 29. Inventory Turnover Ratio and Conversion Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Cost of goods sold 37.80 53.19 64.01 Average inventory 5.88 7.435 8.56 Inventory turnover ratio 6.43 7.15 7.48 Inventory holding period (in days) 57 days 51 days 49 days
  • 30. Debtor’s Turnover Ratio and Average Collection Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Net credit sales 48.49 68.46 82.98 Average debtors 7.70 9.725 11.92 Debtors turnover ratio 6.30 7.04 6.96 Debtors collection period (In days) 58 52 52.5
  • 31. Creditor Turnover Ratio and Average Payment Period Year 2006 – 07 (in Cr.) 2007 – 08 (in Cr.) 2008 – 09 (in Cr.) Net credit purchases 32.30 46.31 53.94 Average creditors 3.545 5.345 7.71 Creditors turnover ratio 9.11 8.66 6.70 Creditors payment period 40 42 54.5
  • 40. Trend analysis of net profit earned by Duke Fashions (India) ltd 0 0.5 1 1.5 2 2.5 3 2005 2006 2007 2008 2009 Net Profit Trend Value
  • 41. Trend analysis of sales of Duke Fashions (India) ltd 0 10 20 30 40 50 60 70 80 90 2005 2006 2007 2008 2009 Sales Trend Value
  • 44.
  • 45.
  • 46.  
  • 47. Query