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HEC Infra NSE SME IPO review (Apply)

Review By Dilip Davda on Mar 5, 2016

HEC Infra Projects Ltd (HEC) is an EPC (Engineering, Procurement and Construction) and SIRC (supply installation Testing & Commission) contractor in the field of Electrical engineering. The Company is a registered as a Class-I Composite Category with Central Public Works Department (CPWD and also been awarded contractor license from Gujarat Energy Transmission Corporation limited (GETCO) as Class – C Contractor and is a registered EPC Contractor with Indian Farmers Fertilizer Cooperative Limited (IFFCO).

HEC is an Electro-Mechanical Contracting firm undertaking Turn-key as well as EPC Projects. The company is in the field of execution for all kind of Electro – Mechanical contracting work since more than last 18 years.

HEC has associated concerns wherein complete range of L.T. and H.T. Electrical Panel Boards are manufactured. It has served for many projects (upto 220KV) catering across industries such as Steel, Chemical, Cement, Refineries, Petrochemicals, Gas & Oil Sector, Textile, Pharmaceuticals, Power-generation plants, Ports, Commercial Centers, Banks, Malls, Multiplexes, Call Centers, Software Park & SEZ.

To meet its working capital requirement, the company is coming out with a maiden IPO of 538800 equity share of Rs. 10 each at a fixed price of Rs. 100 per share. The issue opens for subscription on 10.03.16 and will close on 18.03.16. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Issue is solely managed by Sarthi Capital Advisors Pvt Ltd and Cameo Corporate Services Ltd is the registrar to the issue. Post allotment shares will be listed on NSE SME Emerge platform. Having issued equity at par on inception, it issued shares at a price of Rs. 40 to Rs. 300 during 2007 -2010. In 2011 and 2014 it issued equity at par. In March 2014 it also issued bonus in the ratio of 1 share for every 1 share held. Post issue its current equity capital of Rs. 1.49 crore will stand enhanced to Rs. 2.03 crore.

On performance front, for last three fiscals it has posted an average EPS of Rs. 12.01. Although its top line remained almost static for the fiscals 2013 and 2014, it marked more than double top line for 2015 and has thus surprised. Its bottom line remained in consistent with net profits of Rs.1.07 crore (FY 2013), Rs. 1.02 crore (FY 2014) and Rs. 2.41 crore (2015). For first half of the current fiscal it has earned net profit of Rs. 0.64 crore on a turnover of Rs. 56.85 crore.  If we annualize these earnings and attribute on fully diluted equity post IPO then the EPS works out to Rs. 6.30 and thus asking price is at a P/E of 15 plus against peers shown in prospectus having a P/E of 19 plus.

On merchant banker’s front, this is the 15th IPO from its stable and earlier mandates have shown mixed trends post listing.


Conclusion / Investment Strategy

Cash surplus investors may consider investment in this IPO in a for  long term, as the sector has bright prospects going ahead.

Reviewer recommends Subscribing to the issue.

Review By Dilip Davda on Mar 5, 2016

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. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. 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 own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


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.

Email: dilip_davda@rediffmail.com

HEC Infra Projects IPO FAQs

  1. 1. Why HEC Infra Projects IPO?

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

  2. 2. How is HEC Infra Projects IPO?

    Read the HEC Infra Projects IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. HEC Infra Projects IPO what should investors do?

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

  4. 4. Is HEC Infra Projects IPO good?

    Our recommendation for HEC Infra Projects IPO is to subscribe.

  5. 5. Is HEC Infra Projects IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the HEC Infra Projects IPO.

  6. 6. When will HEC Infra Projects IPO allotment status?

    The HEC Infra Projects IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit HEC Infra Projects IPO allotment status to check.

  7. 7. When will HEC Infra Projects IPO list?

    The HEC Infra Projects IPO will list on Wednesday, March 30, 2016, at NSE SME.