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The public issue of Café Coffee Day (CCD) has evoked mixed response from brokerages. While some feel the issue should be avoided, a few recommend investing in the IPO, while some others are taking a neutral stance.
All in one cup For Prabhudas Lilladher, it is a clear case of ‘avoid’, due to unproductive investments, complicated organisational structure, and low throughput in the café business. India Infoline has taken a neutral stance, saying the issue is richly priced. “Investors with long-term horizon must monitor the stock post-listing for attractive entry points,” it said.
ICICI Securities recommends ‘subscribe’ to investors as it feels the company would be a major beneficiary of urban discretionary consumption.
Angel Broking also shares a “neutral” stance due to negligible profits/ reported losses of subsidiaries, complex holding structure and slightly higher valuation.
Ambit Capital cites limited head room in ROE improvement and operating levers as key concerns for its ‘avoid’ rating.
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