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BUZZ-India's Prataap Snacks surges on debut; high valuations a worry - brokerage
October 5, 2017 / 5:43 AM / 2 months ago

BUZZ-India's Prataap Snacks surges on debut; high valuations a worry - brokerage

** India’s Prataap Snacks Ltd rises as much as 40.6 pct to 1,318.80 rupees in its trading debut, from the IPO price of 938 rupees

** Prataap, which sells potato chips under the Yellow Diamond brand, raised up to 4.82 billion rupees ($74.05 million) in an IPO that was subscribed 47.39 times

** Prataap’s P/E ratio valued at 202 times its fiscal 2017 earnings, Angel Broking estimates

** The company’s gross margins during fiscal years 2013-2017 have been between 26 pct and 31 pct, which is lower compared with the gross margin of about 40 pct for peer DFM Foods Ltd in fiscal 2017 - Angel Broking

** To justify such high valuations, remarkable improvement in profitability is required, which may come at the cost of lower growth - analysts at Angel Broking say

** DFM Foods up as much as 5.5 pct in a Mumbai market that is down 0.1 percent as of 0540 GMT ($1 = 65.0900 Indian rupees)

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