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Review By Dilip Davda on September 25, 2017
RKEC Projects Ltd. (RKEC) is a construction company primarily engaged in the business of Civil Construction such as construction of Highways, roads and bridges. During the last decade, it has undertaken and successfully completed many construction projects in India covering states of Andhra Pradesh, Tamil Nadu, Gujarat, Odisha, Rajasthan and Maharashtra. In addition RKEC has expanded its presence to three more states, Kerala, Uttar Pradesh and Manipur, with our ongoing projects. We have been able to achieve targets by fusing tremendous engineering knowledge with groundbreaking skills, experienced team, binding an optimum mix of men, machine and materials across diverse projects. RKEC's core business is designing and undertaking construction projects such as Bridges, Ports, dams, high-rise structures, airports, cross water, roads, highways, Oil and gas Pipelines, complexes and environmental structures across India. We have entered into projects for diverse range of clients including Defence sector, Railways, Ports, Adani Port, Vedanta Ltd, IVRCL Limited, Rashtriya Ispat Nigam Limited and ESSAR.
To part finance its working capital and general corpus fund needs, RKEC is coming out with a maiden IPO of 6378000 equity share of Rs. 10 each with a fixed price of Rs.45 per share to mobilize Rs. 28.70 crore. Issue consists of 4678000 shares as fresh equity and 1700000 shares by way of offer for sale. Issue opens for subscription on 25.09.17 and will close on 28.09.17. Minimum application is to be made for 3000 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on NSE SME Emerge. Issue is solely lead managed by Hem Securities Ltd. and Bigshare Services Pvt. Ltd. is the registrar to the issue. Issue constitutes 26.59% of the total post issue paid up capital of the company. Cost of acquisition of shares by promoters is Rs. 5 per share. Having issued initial equity at par, it has issued bonus shares in the ratio of 1 for 1 in October 2016. Post issue, company's current paid up equity capital of Rs. 19.31 crore will stand enhanced to Rs. 23.99 crore.
On performance front, RKEC has posted turnover/net profits of Rs.58.64 cr. / Rs. 1.08 cr. (FY14), Rs. 71.75 cr. / Rs. 1.96 cr. (FY15), Rs. 113.51 cr. / Rs. 3.19 cr. (FY16) and Rs. 200.12 cr. / Rs. 13.13 cr. (FY17). Thus it has posted improved top and bottom lines for last four fiscals. It has posted an average EPS of Rs. 4.12 and average RoNW of 22.41% for last three fiscals. Issue is priced at a P/BV of 2.2. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 8.2 against industry composite of 34 plus. Thus issue is priced attractively.
On merchant banker's front, this is the 40th mandate from its stable in last three years. Out of last 10 recent listings, 1 issue opened at discount, 2 at a premium of 2.5 to 5% and the rest with 20% premium to offer price on the day of listing.
Conclusion: Investors may consider investment for short to long term.
Review By Dilip Davda on September 25, 2017
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 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: dilip_davda@rediffmail.com ).
The initial public offer (IPO) of RKEC Projects Ltd offers an early investment opportunity in RKEC Projects Ltd. A stock market investor can buy RKEC Projects IPO shares by applying in IPO before RKEC Projects Ltd shares get listed at the stock exchanges. An investor could invest in RKEC Projects IPO for short term listing gain or a long term.
Read the RKEC Projects IPO recommendations by the leading analyst and leading stock brokers.
RKEC Projects IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the RKEC Projects IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for RKEC Projects IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the RKEC Projects IPO.
The RKEC Projects IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit RKEC Projects IPO allotment status to check.
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