Issue Date:?17th Sept ? 19th Sept 2018
Price Band(Rs):?470-475 |??Lot Size (No. of Share):?30
Company Background
Incorporated in 1976, IRCON is a Delhi based government company (under the ministry of Railways) engaged in the business of engineering and constructions. The company specializes in major infrastructure projects including highways, railways, bridges, flyovers, electrical and mechanical works, development of commercial, residential and industrial areas. In 2016, IRCON was ranked 248 in the list of the top 250 international contractors by Engineering News Record (ENR) of the United States.
Issue Details
| Issue Opens | 17-Sept-18 |
| Issue Closes | 19-Sept-18 |
| Issue Size(Rs in Crore) | 470.49 |
| Face value(per equity share) | 10 |
| Price Band(Rs.) | 470-475 |
| Lot Size(No of Share) | 30 |
| No of Shares on Offer(Crore) | 0.99 |
| QIB(%) | 50% |
| Non-Institutional(%) | 15% |
| Retail(%) | 35% |
| Commencement of Trading | 28-Sept-18 |
Strengths
- Diversified business across many countries.
- Strong financial performance with a robust credit profile.
- Continuously expanding footprints within & beyond India.
- Excellent execution track record through strong operating systems and controls.
Concerns
- Any change in govt policies, restructuring of existing projects or delay payment, may adversely affect its business.
- Projects included in order book and future projects may be delayed, extended, modified or cancelled.
- If IRCON is not successful in managing growth, business may be disrupted and its profitability may be reduced.
Our View
On upper price of Rs 475 and EPS of Rs 42.13, P/E works out to be 11.2x. On last 3 years average EPS of Rs 40.62, P/E works out to be 11.7x. For standalone, P/E is between 11.9x to 12.2x. Therefore P/E would be in range of 11.2x to 12.2x for price band of 470-475. There are no listed peers doing the same business, hence we cannot ascertain whether the issue is underpriced or overpriced.
IRCON has managed to perform well over the years with good economies of scale, proven track record of various domestic and foreign project executions, limited competition, future growth outlook, virtually debt free operations. The company also enjoys a healthy order book position. IRCON is trying to improve international business and is planning to diversify to aid growth. Considering all these positive factors, investors can invest in this IPO for long term considering their risk appetite.
IRCON International Ltd Allotment Status Online
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