Inox to float IPO on Jan 27

Inox Leisure, operator of eight mulltiplexes across seven cities in the country, on Monday announced its initial public offer of 1.65 crore (16.5 million) shares at a price band of Rs 100 to Rs 120.

The offer, for shares of Rs 10 each, will open on January 27 (Friday) and close on the following February 2 (Thursday).

With profits of Rs 9.73 crore for the first half of the current fiscal and 4.8 crore shares (before the present issue), Inox has a six-month trailing earnings per share of Rs 1.94.

However, taking into account the Rs 90-110 premium to be attached to the share price, price-to-earnings ratio is high at 25-30 for annualised profits per share of Rs 4.

The price of the Inox Leisure issue is, however, much cheaper than that of the other recent issues in the sector such as PVR and Adlabs, which are trading at above 50 times their EPS.

Shringar Cinema, despite being in the red, is trading in the Rs 60-100 range.

Besides, going by the recent earnings growth in Inox, EPS is likely to be significantly higher by the end of the year versus the first six months.

The company's profits for the first six months of this year of Rs 9.73 crore (Rs 97.3 million) is already 35 per cent over its entire profit for the whole of 2004-05.

With revenues jumping to Rs 50.8 crore (Rs 508 million) for this period alone from Rs 63.8 crore (Rs 638 million) last year, Inox also saw its margin improve immensely to 19.5 per cent this year from around 11 per cent last year.