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MOIL, Indias largest manganese ore producer lists on the bourses today. The manganese ore major received a huge response from investors for its initial public offering and was subscribed a massive 56.43 times. The price band per share for the issue was fixed at Rs 340-375.

CNBC-TV18s managing editor Udayan Mukherjee says while it is not as big an issue as Coal India; MOIL will certainly see a big listing. He suggests to forget the Rs 375 price band and to now look at Rs 500 plus.

Rs 550 is entirely doable today and we will have a big pop. I dont know how much HNIs got allotment and how much they will make post leverage but for every owner of the share, they are in for a very nice Christmas surprise today, he says.

He finds that MOIL did the issue at a bargain basement kind of a pricing.

He says, At Rs 375, it was too attractive. One needs to forget about the issue price now because you will not see it in the foreseeable future, although never say never. Rs 500 will become a base because the fundamentals are strong and the balance sheet is very good. It is a debt free company; it has Rs 100 per share of cash on its books. The company operates at a 50% PAT margin and in the last three-four years it has been growing at 30-40% every year CAGR.

With good growth, great balance sheet, strong cash generation and good reserves, it looks like a very good story to Udayan.

The grey market is indicating Rs 550 plus, you may easily get there. If we do start at Rs 550 for MOIL, the stock would be trading at something like 11 times FY11-FY12 earnings. The PE multiple would get to 11-12 and that is not hugely expensive. On an EV to EBITDA basis, you will get to about 6 times FY12 EV EBITDA and on a price to book basis we will get to about 3.5 times at Rs 550. If you compare that with other peers both, locally, NMDC, Coal India or with some of the global players, at Rs 550 you will get to those kinds of multiples which are globally sustainable.

Can it see some profit taking there? Sure it can, but Rs 500 will probably become a base for MOIL. It will take a bad market to break it below that. If you look at the fundamentals, the fair value of that stock is somewhere in the zone of Rs 500-600. You will have a great listing with people making money.