Subscribe to ARSS Infra IPO: Nirmal Bang
Nirmal Bang Securities has recommended investors to subscribe to the initial public offer of ARSS Infrastructure on the basis of its encouraging order book and positive industry outlook.
By ET Bureau |
MUMBAI: Nirmal Bang Securities has recommended investors to subscribe to the initial public offer of ARSS Infrastructure on the basis of its encouraging order book and positive industry outlook.
The initial public offering (IPO) of Orissa based infrastructure company has opened for subscription at a price band is at Rs 410-450 per share. The issue will close on February 11, 2010.
ARSS Infrastructure Projects undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects. The company has developed expertise in railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc.
The company has a strong presence in the Eastern India and is based out of Orissa. Some of the company’s reputed clientele include Indian Railways, NHAI, Govt. of
Orissa, NTPC and Vedanta.
The company currently has an order book of Rs. 2877.53 crore out of which railway projects constitute 41% and road projects constitute 40% of the order book. The company has strong revenue visibility of 4.6x based on its FY 09 revenues.
ARSS will raise Rs. 103 crore through this IPO and out of the total proceeds Rs 86 crore will be used towards funding long term working capital requirements and Rs 5 crore will be used towards investment in Joint Ventures. The remaining portion of the issue will be used towards general corporate purposes.
The initial public offering (IPO) of Orissa based infrastructure company has opened for subscription at a price band is at Rs 410-450 per share. The issue will close on February 11, 2010.
ARSS Infrastructure Projects undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects. The company has developed expertise in railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc.
The company has a strong presence in the Eastern India and is based out of Orissa. Some of the company’s reputed clientele include Indian Railways, NHAI, Govt. of
Orissa, NTPC and Vedanta.
The company currently has an order book of Rs. 2877.53 crore out of which railway projects constitute 41% and road projects constitute 40% of the order book. The company has strong revenue visibility of 4.6x based on its FY 09 revenues.
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“ARSS would be trading at a P/E of 10 times (upper band of Rs 450) on an annualized FY 10 EPS of Rs 45 per share. The company recorded EBITDA margins of 18.8 % based on 9 month revenues for the period ended 31st Dec 2009 and a PAT margin of 8.3% for the same period. This looks reasonable when compared to its peers. Looking at the encouraging order book and positive industry outlook we recommend to SUBSCRIBE for the issue” said the brokerage firm. ARSS will raise Rs. 103 crore through this IPO and out of the total proceeds Rs 86 crore will be used towards funding long term working capital requirements and Rs 5 crore will be used towards investment in Joint Ventures. The remaining portion of the issue will be used towards general corporate purposes.
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