XL Telecom IPO opens
XL Telecom has come out with an Initial Public offering of 3956808 equity shares of Rs. 10 each at a premium of Rs. 115 to RS. 140. The public issue closes on 7th December 2006. XL Telecom Ltd is in the business of Telecom, Solar Photovoltaic systems and ethanol. The company has a capacity of over 3 million mobile handsets per annum. The company supplies handsets to all major cdma operators like BSNL, TATA, Reliance and MTNL. On the ethanol front it has a capacity of producing 1,50,000 litres per day. The company’s net worth as on 30th June 2006 is Rs.7874 lacs and the book value per share is Rs.74.5. The post issue EPS is valued at Rs. 7.3 per share and at a price of Rs. 150 per share the offering is made at a PE of about 20. The company is placed in a good space. Telecom sector is booming and the company is having a good order book. Secondly ethanol story is also going to benefit the company in long run. The company is providing handsets to CDMA and wireless operators and therefore has competition with big brands like NOKIA, LG, etc.