Vascon Engineers Limited IPO Message Board (Page 5)

Loading...
ipo king
17. ipo king  Jan 25, 2010 17:15
NEW FPO,,,,,
............R E C OPEN 18 FEB-CLOSE 23 FEB.....
ipo king
16. ipo king  Jan 25, 2010 12:41
new ipo detail....

HATHWAY CABLE DATE 29 JAN OPEN-CLOSE 3 FEB,600 CRORE.
ASSR INFRA DATE 01 FEB OPEN-CLOSE 3 FEB,400 CRORE.
IMRAN
15. IMRAN  Jan 25, 2010 02:57
IPO PLAY KARNA CAHYE ACHA GAIN MILEGA
K.K.Natarajan
14. K.K.Natarajan  Jan 24, 2010 21:12
I studied HDFC holds 43% stake in it which will become 38% post IPO. Is the information correct? Knowledgeable people, please comment.
sreedhar
13. sreedhar  Jan 24, 2010 20:09
good work ipoking.Thanks a lot.
mittal
12. mittal  Jan 24, 2010 18:15
Vascon Engineers — IPO: Avoid
--------------------------------------------------------------------------------
Premium valuations, and high dependence on related parties for contract revenues make this offer unattractive.
--------------------------------------------------------------------------------
Vidya Bala

Investors can avoid the initial public offer of Vascon Engineers, a provider of EPC services, for now. Despite a good track record in construction, premium valuations, dependence on related parties for a bulk of the future contract revenues and long gestation of its real-estate projects support our recommendation. At the offer price band of Rs 165-185, the stock is likely to trade at 32-35 times its consolidated annualised earnings for FY-10 on a post-issue equity base. The valuation does appear steep, irrespective of whether it is compared with pure construction contract plays or stocks of established realty companies.

Scaling up of real-estate revenues, winning of significant contracts from external clients or a steep correction in the stock price linked to broader markets can be reasons to take a re-look at this recommendation.

The company and offer

Vascon Engineers provides Engineering Procurement and Construction (EPC) services and is also into real-estate development mostly through the joint development model. Consolidated revenues for FY-09 stood at Rs 519 crore. The company plans to raise Rs 180-200 crore for construction activities.

asset-light model

Following the footsteps of Godrej Properties, Vascon Engineers seeks to showcase an asset-light model in real-estate through joint developments. It also seeks to integrate its construction skills with real-estate development activity. Sales — from third-party construction contracts — from its own real-estate projects and from development of property would be the three main revenue streams.

From deriving a majority of contract revenues from external clients, the company's order backlog is now tilted in favour of real-estate projects developed by itself/related entities. Of its order backlog of Rs 3,227 crore, 37.6 per cent or Rs 1,215 crore are contracts awarded by external customers, while the rest — Rs 2,012 crore —worth of EPC contracts is for its own real-estate development.

This leads to the risk of deriving a chunk of revenues from related entities whether in the form of joint ventures, partnerships or associates; receivables too would be due from such sources.

It may be worth recollecting that DLF's sale transactions with associate company, DLF Assets, was not too well-received by the market and this factor, in fact, hurt the valuation.

Excessive dependence on internal source(s) for revenue — from the point of view of maintaining an arms-length transaction as well as timely conversion of debtors to cash — does pose a risk. Currently, about 18 per cent of Vascon's total debtors are due from related parties.

This said, Vascon's revenue decline during the realty downturn of FY-09 (at 15 per cent) was lesser than its real-estate peers, primarily because of growth in EPC revenue. However, its current EPC order backlog may not offer sufficient hedge, given the dependence on own projects.

Long drawn

Vascon's projects also appear long-term in nature. For instance, only one-fifth of the EPC projects (external and own projects together) of Rs 3,227 crore are slated for completion over 2010/11. Similarly, of the 55 million square ft. of real-estate projects planned/being developed, less than 10 per cent are due for completion over the next three years ending FY-13. Earnings growth in the near term may, therefore, not keep pace with the valuations sought now.

Further, unlike the Mumbai commercial market, where prices have seen a quick revival, Tier-II cities such as Pune, where the company's commercial projects are concentrated, have not seen any clear demand pick-up as yet. Over the long term though, residential projects, a chunk of it in Pune, dominate the portfolio.

Financials

Vascon's revenue expanded at a robust 54 per cent compounded annually over three years leading to FY-09, while earnings grew by 35 per cent over this period.

This growth, however, predominantly came from pure construction contracts. Going forward, revenues could be lumpy, given the higher dependence on real estate.

The offer is open from January 27-29.
MK
11. MK  Jan 24, 2010 13:59
YES THE P/E IS WRONG AS PER VIHSAL. THE P/E IS 10.37 POST ISSUE AT Rs 185/-
prasad
10. prasad  Jan 23, 2010 20:49
the P/E mentioned by Vishal seem to be incorrect.
However,more clarity needs to be seen on the reasons for decline in profitability from the financial year 2008 to
2009.Also the company's projections for 2010 and current order book will help ,besides this, what is the rating of this issue
VISHAL
9. VISHAL  Jan 23, 2010 18:51
ipo king, u got any information on price / issue size / credit rating for the following ipo:

hathway cable open 29 - close 03 feb,
embivally open 01 feb- close 03 feb,
assr infra open 01 feb - close 03 feb,
ntpc open 03 feb - close 03 feb,
ipo king
8. ipo king  Jan 23, 2010 16:31
Aqwa logis open 25 - close 28 jan.......
Thangmayi jewl. open 27 - close 29 jan...........
Syncom healthcare open 27 - close 29 jan...........
Vascon enggi. open 27-close 01 feB...................

SAB SE PAHLE HUMNE YAHA NEW IPO KI JANKARI DI THI AUR
ABHI AANEWALE NEW IPO KI X'CLUSIVE JANKARI NICHE DI GAYI HAI.

Hathway cable open 29-close 03 feb,
Embivally open 01 feb-close 03 feb,
Assr infra open 01 feb-close 03 feb,
NTPC open 03 feb-close 03 feb,
aakash
7. aakash  Jan 23, 2010 10:45
there is no Registrar to issue yet now. How Funny. JISKA KOI NAHI USKA RETAILER HAI YARO. DOOBTA JAHAJ
VISHAL
6. VISHAL  Jan 23, 2010 08:55
POST ISSUE EQUITY 9.03 CRORE

NET WORTH POST ISSUE ( FY09 + FRESH EQUITY )= Rs 402.07 CRORE
PAT ( FY 09 )Rs 19.26 Crore

P/E FY09 ( Post issue @ Rs 185 ) = 86

BV = 402/9.03 = 44.50

P/BV = 185/44.5 = 4.15

Data given above is for FY09 ( Post Issue ), Fair judgement can be obtain from H1FY10.
sreedhar
5. sreedhar  Jan 22, 2010 23:57
Looks like a good company.Need to check the financials for the first half.
Akshat Shah
4. Akshat Shah  Jan 22, 2010 22:07
Fir se wo hi purani kahani ake khadi he ke purpose of Issue is "REPAYMENT of DEBT" and also Profit seen in sharp Decrease in YoY basis.
K V Subba Rao
3. K V Subba Rao  Jan 22, 2010 20:29
There is sharp DECREASE in Turnover as well as Net Profit in latest FY 2008-09. We need to get plausible explanation for such steep fall and more importantly figures for first half year in FY 2009-10 before taking decision to apply for
Saharanpuri
2. Saharanpuri   Jan 22, 2010 20:25
PEDIGREE N TRACKRECORD WISE SEEMS TO BE THE BETTER IPO AMONGST ALL IPOS OPENING NEXT WEEK.VALUATION WISE HAVENT STUDIED.EVERYBODY EVALUATE VALUATION WISE
rk
1. rk  Jan 22, 2010 19:58
welcome to the blog of latest entry of IPO.







Search Chittorgarh.com:

Download Our Mobile App

Android App iOS App