#Retail investors get a 5% discount
|Pre IPO||Post IPO|
NBCC is engaged in the business of project management consultancy services for civil construction projects, civil infrastructure for power sector and real estate development. NBCC has executed 43 projects ranging from construction of buildings, road works, commercial complexes, hospital etc across India from Sep '06 to Sep '11. The company is awarded projects in the PMC division through nomination basis whereas power project division and real estate division undertake projects through competitive bidding.
Vishnu Pada Das is the CMD of the company. Prior to joining NBCC, Mr. Das served with NTPC from 1976 to 2006 and has approximately 36 years of experience.
As of 31st Jan 2012, unexecuted order book for the PMC and Civil Infrastructure for power sector was Rs 10,614 Cr which is 3.3 times its FY11 revenue gives adequate revenue visibility for the next 2-3 years. Out of the total order book, 28.5% is exposed to the hospitals segment, 30.3% in the infrastructure segment, 26% institutional construction segment, 9.7% for commercial construction and 2.7% for the residential construction.
PMC business segment includes providing management and consultancy services for a range of civil construction projects including residential and commercial complexes, redevelopment of buildings and colonies, hospitals, educational institutions; infrastructure works for security personnel, border fencing as well as infrastructure projects such as roads, water supply systems, storm water systems and water storage solutions.
Civil Infrastructure for power sector
This segment includes providing engineering and construction services for power projects, including design and execution of (i) civil and structural works for power projects (ii) Cooling towers (iii) Chimneys. Some of its clients in this segment include NTPC Limited, BHEL, APGENCO Limited etc.
In this segment NBCC undertakes residential projects such as apartments and townships and commercial projects such as corporate office buildings and shopping malls. As of 31st Jan, 2012 the company has aggregate land reserves of 125 acres located in Delhi, Uttar Pradesh, Patna, Gurgaon, Kolkata, Kochi, Alwar and Lucknow.
|Operating Cash Flows||111||119||91||95|
The company's market cap is Rs 1,080-1,272 Cr on a price band of Rs 90-106. It is asking for a valuation of 7.2-8.5 times its 1HFY12 annualized EPS and a P/BV of 1.5-1.8 times its book value of Rs 61. The company has decent revenue visibility, land reserves of 125 acres, a consistent dividend payout ratio of more than 20% and is able to generate positive operating cash flows. As the issue is at a slight premium to other infrastructure and construction companies, we recommend investors to subscribe to the issue at the lower price band.
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