Subscribe to ITNL IPO with long term view: Nirmal Bang

MUMBAI: Nirmal Bang Securities has recommended investors to subscribe to the IPO of IL&FS Transportation Networks with a long term view.

“At the upper band of the price band, ITNL would be trading at a P/E of 21.2 x and at the lower band it would be trading at a P/E 20.07x on annualized earnings of 1H FY10. Post dilution, EV/EBITDA for the company would be 10.76 on the upper band and 10.36 on lower band on annualized EBITDA of 1H FY10.

Compared to ITNL IRB Infra which is a similar player in the industry currently trades at a P/E of 28.2x and an EV/EBITDA of 15.6x. P/BV of ITNL at the upper band is at 3.12x (post issue) as compared to 6.9x of IRB. Considering that ITNL is a much larger player compared to IRB in terms of revenues we believe that at the upper band of Rs 258 ITNL is not very expensive. Based on the attractive valuation for ITNL we recommend to subscribe to the IPO with a long term view,” said Nirmal Bang Securities.

IL&FS Transportation Networks' initial public offering has been fully subscribed, as per data available on the NSE website. The issue received bids for 2.39 crore equity shares as against issue size of 2.37 crore equity shares.

The company plans to raise upto Rs 700 crore through this issue, which will close on Monday.

It already received a commitment of Rs 126 crore from anchor investors. Anchor investors have subscribed for 48,83,720 equity shares at Rs 258 per equity share, at the higher end of price band at Rs 242-258.