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November 25, 2007

Jyothy Laboratories IPO – Open for subscription

Jyothy Laboratories IPO opened for subscription on Thursday. The share with face value of Rs 5 each is offered at a price band between Rs 620 and Rs 690 per equity share. After lacklustre first day, second day collection was 0.03 times.


Jyothi Laboratories Limited IPO Information:

Public Issue Open

22-27 Nov 2007

Public Issue Type

100% Book Building

Public Issue Size


Listing At


Face Value

Rs. 5

Public Issue Price

Rs. 620/- to Rs. 690/-

Market Lot



Lead Manager(s)

Kotak Mahindra

Enam Financial


Intime Spectrum Registry Ltd

As per India Infoline, Jyothy Labs well placed for healthy growth. As per India Infoline report:

Jyothy Laboratories (JLL) is an FMCG company making a range of branded products, including fabric whiteners, mosquito repellents, dish-washing soaps, soaps and incense. Its key brands are Ujala, Maxo, Exo, Jeeva and Maya.

Investment summary

* Ujala is a well-known brand of fabric whitener, with dominant market share of approximately 72% in the category

* Local presence and wide distribution reach

* Targets the rural market

* Entering into new joint-venture initiatives

Risks and concerns

* Heavily depend on two biggest brands, Ujala and Maxo which contribute 43.6% and 35.4% of its total sales respectively (as on 30 June 2007).

* Dependence on outsourced production through third parties. Any disputes or disagreements may affect their business.

* The company is susceptible to seasonal variations in demand for its products.

Valuations attractive in comparison to the peer group

At the issue price of Rs 620-690, JLL commands an inexpensive P/E (on relative basis) of 18.6x-20.7x based on FY07 EPS of Rs 33.3. The price/book ratio of 3.4x at Rs 690 is also at steep discount to peers. The company is well-placed for healthy growth, given its well-established brand equity, leadership in the fabric whitener segment and strategic alliances. We recommend to Subscribe in the issue.

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