Review By Dilip Davda on April 29, 2015
PNC Infratech (PNC) is an Indian infrastructure construction, development and management company, with expertise in the execution of major infrastructure projects, including highways, bridges, flyovers, power transmission lines, airport runways, development of industrial areas and other infrastructure activities. PNC provides EPC services on a fixed-sum turnkey basis as well as on an item rate basis for various infrastructure projects. It also executes projects on a BOT (including on a DBFOT basis), operate them during the concession period on toll or annuity basis and subsequently transfer the projects. In 2013, the company entered into a project on an OMT model as well. PNC is executing projects across various states in India covering Rajasthan, Punjab, Haryana, Uttarakhand, Uttar Pradesh, Delhi, Bihar, West Bengal, Assam, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu. The Company has executed 42 major infrastructure projects on an EPC basis, acquiring experience particularly in the timely execution of EPC contracts since its incorporation.
To invest in capital equipments/subsidiary, repayment of debt in part and meet general corpus funding requirement, the company is coming out with an IPO of 12921708 equity share of Rs. 10 each in a price band of Rs. 355-378. Issue opens for subscription on 08.05.15 and will close on 12.05.15. Thus on the lower and upper price band, company is likely to mobilize Rs. 458.72 - Rs. 488.44 crore. It consists of fresh equity offer of 11500000 equity shares and the rest as offer for sale from existing shareholders (NYLIM JACOB BALLAS INDIA (FVCI) III LLC). NYLIM is selling 25% of its current holding through offer for sale. 50000 shares from the IPO is reserved for eligible employees. Minimum application is to be made for 35 shares and in multiples thereon, thereafter. Issue is lead managed by ICICI Securities Ltd jointly with IDFC Securities Ltd. and registrar to the issue is Link Intime India Pvt Ltd. Post allotment; shares will be listed on BSE and NSE. It has issued bonus shares in the ratio of 1 for 1 on 26th November 2007 and 1 for 2 on 10th September 2009. During 30.09.2009 and 12.01.2011 it made preferential allotment at a price between Rs. 200.00 to Rs. 263.77 per share that took the equity capital at Rs. 39.81 crore that will rise to Rs. 51.31 crore post this IPO.
On performance front, the company has (on consolidated basis) posted an average EPS of Rs. 16.06. It suffered set back in bottom lines fiscal 2013-14. For first nine months ended on 31.12.14 it has earned net profit of Rs. 62.43 crore on a turnover of Rs. 1326.37 crore. If we annualized these earnings and apply on enhanced equity of Rs. 51.31 crore post this IPO then asking price is at a P/E of 22 against industry average of 19.98. Based on NAV of Rs. 168.51 as on 31.12.14 it is at 2.1 plus P/BV and thus it is a pricy bet compared to its peers. As on 31.03.15 it has order on hand worth Rs. 7849.70 crore (out of which around 12% is on BOT basis and the rest on EPC basis). As infrastructure sector is receiving major focus of investment in coming few years, this company is poised for bright prospects.
Although issue has fancy pricing, retail investors may consider moderate investment at the lower price band for long term.
Review By Dilip Davda on April 29, 2015
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 PNC Infratech Ltd. offers an early investment opportunity in PNC Infratech Ltd.. A stock market investor can buy PNC Infratech IPO shares by applying in IPO before PNC Infratech Ltd. shares get listed at the stock exchanges. An investor could invest in PNC Infratech IPO for short term listing gain or a long term.
Read the PNC Infratech IPO recommendations by the leading analyst and leading stock brokers.
PNC Infratech IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the PNC Infratech IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is PNC Infratech IPO?"
Our recommendation for PNC Infratech IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the PNC Infratech IPO.
The PNC Infratech IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit PNC Infratech IPO allotment status to check.
