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Prakash Constrowell Ltd IPO Review (Avoid)

Review By Dilip Davda on Sep 21, 2011

Prakash Constrowell Ltd (PCL), the Company promoted by Nasik based Laddha family is primarily engaged in the business of infrastructure development and civil construction. It claims to be the fast growing company that provides integrated engineering, procurement and construction services. PCL believes in providing high quality and innovative projects on a timely basis. The company undertakes projects for various Government / semi-government bodies and other private sector clients. Company is headquartered at Nasik, Maharashtra and has operations across the state of Maharashtra.

 Now company is planning to mobilize around Rs. 60 crore to fund its corpus need and investment in construction equipments. To part finance this funding, it is coming out with a book building process IPO on 19th Sept. 2011. The company is offering (*) equity share of Rs. 10 each within a price band of Rs. 130 - 138. The issue will close on 21st Sept. 2011. Minimum application is to be made for 50 shares and in multiples thereof. Intensive Fiscal Services Pvt. Ltd. is the sole BRLM that brought two IPOs before out of which only one IPO gave positive return on debut day. Bigshare Services Pvt. Ltd. is working as registrar to the issue.  Shares will be listed on BSE and NSE. CARE has assigned IPO Grade 2 to this IPO indicating at below average fundamentals of the company.


Conclusion / Investment Strategy

 

The Company's income from operations on a consolidated basis as per the restated financials has grown from  Rs 26.40 crore in the year 2007-08 to Rs 126.91 crore in the year 2010-11 exhibiting a compounded annual growth rate of 68.77 % over the period of past four financial years. Its profit after tax on a consolidated basis as per the restated financials has grown from Rs 3.06 crore in the year 2007-08 to Rs 10.65 crore in the year 2010-11 exhibiting a compounded annual growth rate of 51.47 % over the period of past four financial years. However, if this earnings translated on the basis of enhanced equity post this issue, than the EPS for 2010-11 stands at Rs. 10 and the book value of Rs. 39 as on 31.3.2011 makes this offer at and around 13 P/E and 3.3 P/BV on the lower price band. Thus it looks aggressively priced and hence worth giving it a MISS

Reviewer recommends Avoid to the issue.

Review By Dilip Davda on Sep 21, 2011

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

Prakash Constrowell IPO FAQs

  1. 1. Why Prakash Constrowell IPO?

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

  2. 2. How is Prakash Constrowell IPO?

    Read the Prakash Constrowell IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Prakash Constrowell IPO what should investors do?

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

  4. 4. Is Prakash Constrowell IPO good?

    Our recommendation for Prakash Constrowell IPO is to avoid.

  5. 5. Is Prakash Constrowell IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Prakash Constrowell IPO.

  6. 6. When will Prakash Constrowell IPO allotment status?

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

  7. 7. When will Prakash Constrowell IPO list?

    The Prakash Constrowell IPO will list on Tuesday, October 4, 2011, at BSE, NSE.
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