Equity Market Pundit

MIC Electronics manufactures of True Colour LED video display systems, MIC is the only company in India to have the capability for manufacture of LED video display systems.The price band for the offer has been fixed between Rs 129 and Rs 150 per equity share.

It has high risk of technological obsolescence

the company earnings are primarily dependent on the business of LED Display Systems

Nichia Corporation is primary source Raw Material.

The management says the 30.8% earning before interest, depreciation, taxes and amortisation (EBIDTA) margin of the segment in FY ended June 2006 has improved to about 40% in the six months ended December 2006 on reduction in R & D cost.

The current global LED display market size is around US$ 3.55 billion and is expected to reach US$ 3.9 billion by 2007. The LED market has shown a CAGR of 15.98% from FY 2004 to FY 2007. Internationally, LED display renting is one of the fastest growing segments in the live entertainment industry, with a size of around US$ 210 million and is expected to grow by 12.5% year on year.

The order book of the three divisions stood at Rs 167.86 crore end January 2007, which is 2.5 times the revenue for six months ended December 2006. Of this, 33.92% of the orders are for LED video display systems, 3.57% for the IT division and the balance 62.49% bagged by the communications segment.

Since it has monopoly in India and also that it is growing with a CAGR of around 16 percent and,The LED business has excellent growth potential I think people should subscribe for this IPO