No sharp spike of BTCL share price seen

Shares usually have a higher chance of rising post listing if the IPO offer price is significantly below the underlying valuation of the company’s shares, which is based on profit and assets growth forecasts as well as goodwill.  In a market commentary, analysts at consultancy firm, Econsult say that although the calculation show a value of about P1.26, the limited marketability of the shares as well as government control marks the share price further down.

“Valuing BTCL at the median price/earnings ratio on the BSE would give a valuation of around P1.26 per share.   But a discount must be applied to this valuation, given continued government control and limited marketability of the shares. “Hence the underlying valuation of the BTCL shares is probably not far from the IPO price.