PNC Infratech IPO Review (Others)

Review By Dilip Davda on Apr 29, 2015

PNC Infratech (PNC) is an Indian infrastructure construction, development and management company, with expertise in the execution of major infrastructure projects, including highways, bridges, flyovers, power transmission lines, airport runways, development of industrial areas and other infrastructure activities. PNC provides EPC services on a fixed-sum turnkey basis as well as on an item rate basis for various infrastructure projects. It also executes projects on a BOT (including on a DBFOT basis), operate them during the concession period on toll or annuity basis and subsequently transfer the projects. In 2013, the company entered into a project on an OMT model as well. PNC is executing projects across various states in India covering Rajasthan, Punjab, Haryana, Uttarakhand, Uttar Pradesh, Delhi, Bihar, West Bengal, Assam, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu. The Company has executed 42 major infrastructure projects on an EPC basis, acquiring experience particularly in the timely execution of EPC contracts since its incorporation.

To invest in capital equipments/subsidiary, repayment of debt in part and meet general corpus funding requirement, the company is coming out with an IPO of 12921708 equity share of Rs. 10 each in a price band of Rs. 355-378. Issue opens for subscription on 08.05.15 and will close on 12.05.15. Thus on the lower and upper price band, company is likely to mobilize Rs. 458.72 - Rs. 488.44 crore. It consists of fresh equity offer of 11500000 equity shares and the rest as offer for sale from existing shareholders (NYLIM JACOB BALLAS INDIA (FVCI) III LLC). NYLIM is selling 25% of its current holding through offer for sale. 50000 shares from the IPO is reserved for eligible employees.  Minimum application is to be made for 35 shares and in multiples thereon, thereafter. Issue is lead managed by ICICI Securities Ltd jointly with IDFC Securities Ltd.  and registrar to the issue is Link Intime India Pvt Ltd. Post allotment; shares will be listed on BSE and NSE. It has issued bonus shares in the ratio of 1 for 1 on 26th November 2007 and 1 for 2 on 10th September 2009.  During 30.09.2009 and 12.01.2011 it made preferential allotment at a price between Rs. 200.00 to Rs. 263.77 per share that took the equity capital at Rs. 39.81 crore that will rise to Rs. 51.31 crore post this IPO.

On performance front, the company has (on consolidated basis) posted an average EPS of Rs. 16.06. It suffered set back in bottom lines fiscal 2013-14. For first nine months ended on 31.12.14 it has earned net profit of Rs. 62.43 crore on a turnover of Rs. 1326.37 crore. If we annualized these earnings and apply on enhanced equity of Rs. 51.31 crore post this IPO then asking price is at a P/E of 22 against industry average of 19.98. Based on NAV of Rs. 168.51 as on 31.12.14 it is at 2.1 plus P/BV and thus it is a pricy bet compared to its peers. As on 31.03.15 it has order on hand worth Rs. 7849.70 crore (out of which around 12% is on BOT basis and the rest on EPC basis). As infrastructure sector is receiving major focus of investment in coming few years, this company is poised for bright prospects.


Conclusion / Investment Strategy

Although issue has fancy pricing, retail investors may consider moderate investment at the lower price band for long term.

Review By Dilip Davda on Apr 29, 2015

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. Any reader taking decisions based on any information published here does so entirely at its own risk. Investors should bear in mind that any investment in stock markets is subject to unpredictable market-related risks. The above information is based on RHP and other documents available as of date coupled with market perception. The author has no plans to invest in this offer.

(SEBI registered Research Analyst-Mumbai).


About Dilip Davda

Dilip Davda, a freelance journalist

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

PNC Infratech IPO FAQs

  1. 1. Why PNC Infratech IPO?

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

  2. 2. How is PNC Infratech IPO?

    Read the PNC Infratech IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. PNC Infratech IPO what should investors do?

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

  4. 4. Is PNC Infratech IPO good?

    Sorry, we didn't rate the PNC Infratech IPO.

  5. 5. Is PNC Infratech IPO worth Investing?

    Our lead analyst Mr. Dilip Davda didn't rate the PNC Infratech IPO.

  6. 6. When will PNC Infratech IPO allotment status?

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

  7. 7. When will PNC Infratech IPO list?

    The PNC Infratech IPO will list on Tuesday, May 26, 2015, at BSE, NSE.

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