Review By on September 27, 2017
CMM Infraprojects Ltd. (CMM) is engaged in the business of construction and development of infrastructure projects in Buildings and Roads on contract basis for the last ten years. Company is an Engineering, Procurement and Construction (EPC) Company with experience in end-to-end design and construction of various projects that includes Housing / Commercial Complex, Hospitals / Healthcare, Corporate / Education / Defense Offices, Irrigation, ST Parks, IT Offices, Sports Complex, Automated and manual Car Parking, Sewerage, Highways / Roads, Bridges and Railways. It has marked its presence over 40% of geographical spread of the country and has undertaken and successfully completed many construction projects in India covering state of Madhya Pradesh, Odisha, Chhattisgarh, Maharashtra, Rajasthan, Bihar, Goa, Haryana and Uttar Pradesh.
To part finance its working capital and general corpus fund needs, CMM is coming out with a maiden IPO of 4545000 equity share of Rs. 10 each with a fixed price of Rs.40 per share to mobilize Rs. 18.18 crore. Issue opens for subscription on 29.09.17 and will close on 04.10.17. Minimum application is to be made for 3000 shares and in multiples, thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Systematix Corporate Services Ltd. and Link Intime India Pvt. Ltd. is the registrar to the issue. Issue constitutes 29% of the post issue paid up capital of the company. Having issued initial equity at par, it raised further equity in the price range of Rs. 25 to Rs. 500 from September 2016 to September 2017 and has also issued bonus shares in the ratio of 1 for 1 in December 2010, 3 for 1 in September 2017. Post issue, its current paid up equity capital of Rs. 11.13 crore will stand enhanced to Rs. 15.67 crore. Cost of acquisition of shares by promoters ranges from Rs. 1.25 to Rs. 7.68 per share.
On performance front, CMM has posted turnover/net profits of Rs. 98.23 cr. / Rs. 1.07 cr. (FY14), Rs. 145.28 cr. / Rs. 1.93 cr. (FY15), Rs. 178.77 cr. / Rs. 2.29 cr. (FY16) and Rs. 202.24 cr. / Rs. 6.24 cr. (FY17). Thus is has shown rising trends in top and bottom lines. For last three fiscals, it has posted an average EPS of Rs. 3.78 and average RoNW of 16.60% on an equity base of Rs. 2.78 crore. Issue is priced at a P/BV of 1.61. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 10 plus against peers trading around 19 to 26 P/E. Thus issue appears to have been priced reasonably.
On merchant banker’s front, this being first mandates from its stable, it has no track records.
Conclusion: Investment may be considered for medium to long term
Review By on September 27, 2017
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of CMM Infraprojects Ltd. offers an early investment opportunity in CMM Infraprojects Ltd.. A stock market investor can buy CMM Infraprojects IPO shares by applying in IPO before CMM Infraprojects Ltd. shares get listed at the stock exchanges. An investor could invest in CMM Infraprojects IPO for short term listing gain or a long term.
Read the CMM Infraprojects IPO recommendations by the leading analyst and leading stock brokers.
CMM Infraprojects IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the CMM Infraprojects IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is CMM Infraprojects IPO?"
Our recommendation for CMM Infraprojects IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the CMM Infraprojects IPO.
The CMM Infraprojects IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit CMM Infraprojects IPO allotment status to check.
