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AB Infrabuild NSE SME IPO review (May apply)

Review By Dilip Davda on June 24, 2019

  • ABIL is shifting its focus for Railway infra projects and uses its RMC facility for captive use.
  • The company has emerged most preferred infra development contractor for Railways.
  • It has overall orders on hand worth Rs. 370 cr. and has submitted bids for Rs. 70 cr.
  • The issue is reasonably priced if compared with infra segment composite.



AB Infrabuild Ltd. (ABIL) is engaged in providing various services for infra developments including civil and structural works. The company generates 100% revenue from Government for infra works and 100% for RMC and other work from Private sectors. ABIL undertakes contracts for works such as new station infrastructure, redevelopment of old stations, new railway lines, gauge conversion, track linking, track formation, etc. It also engages in activities like building steel grinder bridges, building of Railway Infrastructure and Road Contracts (BOT & Turnkey basis).

 Company has two major business verticals, Railway infra contracts and RMC. It is not giving major thrust for Infra projects and RMC is utilized for captive consumption. A change in business strategy has rewarded the company with higher margin realization despite lower turnover as RMC business was of high volume, low margins. 

 Company's client list includes Central Railway, MRVC, Western Railway, Municipal Corporations of Maharashtra, RCF, North Central Railway, Dedicated Freight Corridor, CORE etc. and the type of contracts being of developments and safety measures, get priority in dues settlements, as stated by the management.

 In private sector, ME Infra Projects, NA Construction, Oasis Infrastructure, Das Group, J P Infra, Relcon Infra etc are its clients.

 ABIL is a Grade 'AA' Contractor registered with the Municipal Corporation of Greater Mumbai) (MCGM) and Class 1(A) Contractor with PWD Maharashtra.


Completed Projects


To part finance its needs for working capital (Rs. 9.40 cr.) and general corpus fund (Rs. 2.30 cr.), ABIL is coming out with a maiden IPO of 4428000 equity shares of Rs. 10 each at a fixed price of Rs. 29 per share to mobilize Rs. 12.84 cr. The issue opens for subscription on 28.06.19 and will close on 03.07.19. Minimum application is to be made for 4000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue constitutes 34.95% of the post issue paid up capital of the company. ABIL is spending Rs. 1.14 cr. for this issue process.

The issue is solely lead managed by Mark Corporate Advisors Pvt. Ltd. while Bigshare Services Pvt. Ltd. is the registrar to the issue.

 Asnani Stock Broker is acting as a Market Maker for this issue.

 Having issued initial equity at par, ABIL issued further equity at Rs. 32 per share in May/June 2018. It has also issued bonus shares in the ratio of 2 for 1 in June 2018. The average cost of acquisition of shares by the promoters is Rs. 3.33 per share. Post issue, ABIL's current paid up equity capital of Rs. 8.24 cr. will stand enhanced to Rs. 12.67 cr.


On the financial performance front, for the last three fiscals, ABIL has posted turnover/net profits of Rs. 75.16 cr. / Rs. 0.33 cr. (FY16), Rs. 73.99 cr. / Rs. 0.16 cr. (FY17) and Rs. 61.09 cr. / Rs. 3.15 cr. (FY18). For 9MFY19 it has earned net profits of Rs. 2.70 cr. on a turnover of Rs. 40.33 cr. Higher earnings on the lower top lines in pre-IPO fiscals are a bit surprising.

 For the last three fiscals, it has posted an average EPS of Rs.2.33 and an average RoNW of 15.42%. The issue is priced at a P/BV of 1.63 on the basis of its NAV of Rs. 17.80 as on 31.12.18.

 If we annualize latest earnings and attribute on fully diluted equity post issue, then asking price is at a P/E of around 10. Against segment composite of 19 P/E, the issue appears reasonably priced. According to management, peers shown are primarily in RMC business and hence they are not comparable, but due to one business vertical, offer document is showing it. In fact, ABIL is enjoying a virtual monopoly in Railway infra contracts. The company has as of the filing of final prospectus, orders on hands worth Rs. 370 cr. and has submitted bids for Rs. 70 crore which is expected to be converted in order soon.


As per offer document, it has shown Man Infra and J Kumar as its listed peers that are currently trading at a P/Es of around 7 and 6 (as on 24.06.19). However, they are strictly not comparable on an apple to apple basis.


On Merchant Banker's front, this is the 5th mandate from its stable in the last three fiscals. Out of last four listings, 1 opened at discount, 1 at par and the rest with premiums ranging from 6.06% and 12.78% on the day of listing.

Conclusion / Investment Strategy

With a focus on high margin railway contracts, the company is set for bright prospects ahead as Railway infra development is expected to be of high priority for the state of Maharashtra. Considering reasonable pricing and future prospects, Investors may consider parking of funds for long term.

Review By Dilip Davda on June 24, 2019

Review Author

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. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

AB Infrabuild IPO FAQs

  1. 1. Why AB Infrabuild IPO?

    The initial public offer (IPO) of A B Infrabuild Limited offers an early investment opportunity in A B Infrabuild Limited. A stock market investor can buy AB Infrabuild IPO shares by applying in IPO before A B Infrabuild Limited shares get listed at the stock exchanges. An investor could invest in AB Infrabuild IPO for short term listing gain or a long term.

  2. 2. How is AB Infrabuild IPO?

    Read the AB Infrabuild IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. AB Infrabuild IPO what should investors do?

    AB Infrabuild IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the AB Infrabuild IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is AB Infrabuild IPO good?

    Our recommendation for AB Infrabuild IPO is to subscribe for long term.

  5. 5. Is AB Infrabuild IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the AB Infrabuild IPO.

  6. 6. When will AB Infrabuild IPO allotment status?

    The AB Infrabuild IPO allotment status will be available on or around July 9, 2019. The allotted shares will be credited in demat account by July 10, 2019. Visit AB Infrabuild IPO allotment status to check.

  7. 7. When will AB Infrabuild IPO list?

    The AB Infrabuild IPO will list on Friday, July 12, 2019, at NSE SME.