Atlanta Limited : The Unicorn of Indian IPO’s

Its pretty chilly weather out there and with year end work and preparations on for projects that are starting new with Jan 2007, my blog was going through a dry week sans any single post. Then i fell ill too… and there are hazaar more reasons that i can blame on for not writing.

Late this week with sensex touching 4000 and nifty touching 14k levels i was busy booking profits on two of my lucky horses (Stocks) One was the top performer of 2006, Atlanta Limited (ATLLIM) in the mid cap section and the other is the mammoth large cap Reliance Industries (RELIND).

Back in August we had the IPO on the little known company Atlanta Limited that came to the market at the same time as Tech Mahindra (TECMAH). ATLLIM listed at 150 and i took a position at 190. At that time the company was little known just that it was operating a a BOT project on highways between Mumbai and Pune. Somewhere down in September end a western firm picked up a large chunk of shares in the company and overnight the companies plans were so much changed with more strategic foray into real estate development and so on. ATLLIM is now focussing on buying over parking lots in most IT cities and also into property development so on. And for the last 10 days the stock has been going from circuit to circuit on a bullish frenzy. There was a brief consolodation at 670 levels then it was no looking back but a consecutive leap on circuit levels until current levels (1210). 

** Circuit is basically about when the stock appreciates / depreciates upto 5 % of the current stock value. Then the stock is locked at that price for the day. The reason for the circuit breakers is to control volatility in the market and also to prevent the "bubble" effect.

ATLLIM at these levels looks very attractive to book profits. the reason being that this stock is afterall a construction stock and the lead times for such projects run into months and the reasoning is how can the stock appreciate day by day to phenomenol levels on such sectors. i feel that the stock has reached this stage all due to speculation and is slightly overpriced for all its operating ratios and so on. Though it has replaced ERA Constructions as the top performer of all IPO’s since 2005 i still feel its time to post profits. So based on this i booked partial profits at 1198. (Ironically for every 190 invested over a period of 90 days has yielded a return of 1198 . Do i have anything to complain ?)

RELIND is a market leader and a epitome of success. I took a position on this stock as soon as we had news of its foray into Retail. Reliance retail is a part of the RELIND. We should understand one rule about RELIND that wherever REL goes in whatever market, whichever sector, they go big guns blazing and trendsetters. We saw that in the past in many occassions and Retail is no exception. With so much happening in the retail space like lately we have a tie up between Bharti and Walmart for the same space now that industry is hotting up. We can expect a lot of fireworks on that sectors soon. Last week we had the news that Reliance buys over a retail chain called Adani Enterprises and this will add up value to their retail chain. Acquisitions will be the order of the day in this sector soon. There are small chains in the south like subhiksha that are attractive buys for such large players.

Alongwith this comes another baggage of IT solutions companies like Mecosoft , Fuente, Bartronics so on that offer IT solutions to the retail space with integration to RFID and Barcoding technologies. This space is also going to see a lot of exciting times to come… Good Nite folks !

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