MEP Infrastructure IPO Review & Recommendations

MEP Infrastructure IPO Review by Dilip Davda (May apply)

[Dilip Davda]  

On standalone basis the company has posted an average EPS of Rs. 1.48 with a diminishing trend for last three fiscal. For the same periods, on consolidated basis it has negative EPS of (–Rs. 11.06). On consolidated basis the company has posted turnover/(Loss) of Rs. 1136.60 crore/(-Rs.47.72 crore) (2012), Rs. 1302.07 crore/(-Rs.92.93 crore) (2013), Rs. 1240.13 crore/ (-Rs.121.41 crore). For first seven months of the current fiscal the company has posted turnover of Rs. 1141.52 crore with a loss of (-Rs.97.30 crore). If we annualized and attribute this earnings on post IPO equity then the EPS comes to (-Rs.10.30).  Thus the asking price for the issue is exorbitant considering negative earnings as well as the last issue at a price below Rs. 22. As the new Government is slowly doing away with toll collections, ongoing is likely to be worsen and hence future earnings will have great impacts of abolition of toll tax. Thus this issue appears to be a risky bet.

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Author has no plans to invest in this offer.