Gremach Infrastructure Ltd IPO (Gremach IPO) Detail

its listed @92 and currently 87

this IPO will surely fetch a premium of about 5-10 % but after few days of listing it might go down due to market sentiments. it is a good company for long term and can be entered after listing gains are factored in.

yes in know this stock cannot list above 50 40 rs is good price to eneter this stock.

Anybody knows when is this ipo listed?

I also got 100% :)

Allotment is Done. I have got 100% allotment.

Hi Madhu,
I don't think allotment is done yet.

Anybody knows..........allotment status url

Anybody knows..........when is this IPO getting listed?

earned good amount in idea, indian bank and mindtree. i will not apply for this ipo instead i will apply the profits from the above issue to ICRA

Leave it & vimal oil & apply for ICRA ,its an excellent issue

The Keynote Capitals report on Gremach Infrastructure IPO:

Recommendation - Subscribe with a medium term view

^ Gremach Infrastructure Equipments & Projects (GIEPL) is into renting of construction equipment and machineries to companies engaged in construction of roads, power projects, multiplexes and industrial complexes etc.

^ Present market size of the equipment rental industry is estimated at Rs12.5bn, (CAGR of 13.0% during 2001-06) expected to grow to Rs15bn by 2011. The industry is dominated by several small local players in the unorganized sector, with an estimated 85% market share. The organized sector is represented by players like Quipo Infrastructure Equipment Ltd., NAC Infrastructure Equipment Ltd. (both promoted by Srei Infrastructure Finance Ltd.) and GIEPL.

^ GIEPL has a strong client base including L & T, Gammon India, HCC, Shapoorji Pallonji & Co. and Punj Lloyd, most of which give repetitive orders.

^ Share of owned equipment will move up from 17% currently to 36% in FY08 and to 45% in FY09. Since renting of own equipment offers better margins, the proposed purchase of Rs61Cr worth of new construction equipment will enable it to improve EBITDA margins.

^ While Quipo may have a much better brand equity, a larger network and bigger size, we believe the rapidly-growing equipment rental market in India can not only afford adequate growth opportunities to smaller players like GIEPL, but easily accommodate a couple of more players.

^ In addition to the growing pie, another major positive for this business segment is the growing share of organized sector players like Quipo and GIEPL. We believe with their national presence, depth of management and brand equity, players like Quipo and GIEPL will be able to take away a significant market share from the unorganized sector, going forward.

^ The unconfirmed placement by Quipo to some investors would translate into a valuation of $200mn, or Rs 890 crore approximately. This translates into a price-to-sales ratio of around 5.8x, assuming a topline growth of 70% in FY07 for
Quipo, making it substantially more expensive that GIEPL, at 1.2x.

^ However, in our view, the unlisted Quipo which is undoubtedly the market leader, with its high EBITDA margins clearly deserves this richer valuation. We expect Quipo's growth trajectory to be much higher than that of GIEPL's. However, till such time as Quipo goes public (for which no timelines have been announced), we believe GIEPL can be a good play on the booming equipment rental market in India.

^ In view of the valuation of 11.6x FY08E and 7.1x FY09E, we believe investors can consider this IPO with a medium term view.

Investment Concerns
* In FY06, 83% of total rental income was attributable to re-hiring of equipment, which offers lower margins.
Some companies belonging to the promoter group are in the same line of business, which may lead to a conflict of interest with GIEPL.

* GIEPL does not have any long-term contract with clients and the work orders depend upon the client's requirement of construction equipments.

The current market trend is very volatile. Despite a good fundamentals such as in case of Power Finance Corporation,if the listing gains are around 15-20% are there. The same thing happened in case of IDEA. If the Gremach issue is good, can it sustain the volatile market changes as of now that is the question to be asked. Otherwise, the issue seems to be very good & one can exit at the listing time & long term player could stay for more returns.

Financials

The company’s total income for the financial year ended March 31, 2006 was Rs 83.45 crore against Rs 75.97 crore for the corresponding period the previous year. Profit after tax has increased from Rs 4 crore in FY05 to Rs 5.94 crore in FY06. RoNW stood at 6.12%, 15.03% and 15.30% during FY04, FY05 and FY06 respectively. On an annualized basis, the RoNW works out to 24.78% in FY07.

Valuations

At the price band of Rs 75-90, the stock trades at a P/E multiple of 7.90x and 9.48x of FY07 annualised earnings, which is at a discount to peers like Sanghvi Movers (P/E: 14.8x). We expect the company to show consistency in earning growth on the back of strong infrastructure spending. The stock looks attractive and we recommend that investors apply to the issue with a long-term perspective. (from ICICI)

I should apply in this IPO or not can u suggest, if yes then what should be listing gain approx.

Do not apply for this ipo, Better invest in sanghvi movers which is already Established & is available in the market at a discount price

This a very good company

Fundamentally very strong company having stong order book.Invest for listing gains and for long term investment.

can anybody tell, whether to apply or not, as this company is not into construction directly, but are catering to construction companies.

if anybody know about this ipo plz tell me,i want to invest in it