'Subscribe' to Ashoka Buildcon IPO, says Nirmal Bang

MUMBAI: Nirmal Bang has recommended investors to ‘Subscribe’ to the Ashoka Buildcon IPO. The company plans to raise Rs 225 crore at upper price band of offer. The proceeds will be used for investment in working capital, working capital requirement, prepayment/repayment of loans and funding subsidiaries.

“We believe that the sector offers plentiful opportunities for the players in the space. Over the last couple of years since the change in guard at the road ministry, the road sector has been gathering pace. In FY2011, NHAI plans to award 9,000km of highways – one of largest annual opportunity in its history. As on date, ~2,856km have already been awarded. ABL being a regional player will be benefited from investment of Rs. 1940bn in state road project.

Ashoka is a pure play on the road segment and with the sector in sweet spot, the company is all set to reap the benefits going ahead. Given the strong execution capabilities, proven track record, & Ashoka’s integrated business model couple with huge opportunity in Infrastructure segment especially in Power & Construction, we believe it is well place to reap the benefit going ahead. We recommended subscribe to the Issue,” the report said.

As per the NSE website, as on September 27, till 12 pm, the issue was subscribed 0.95 times.

The issue closes Tuesday.