Jet Airways grounded proposed plan to raise $400 million through a secondary rights issue

By Vipin Agnihotri

I still remember how investing during the Jet Airways market debut burned me real badly financially. The scrip, which listed at Rs 1,350, within a matter of two months of listing dipped to Rs 550. According to highly placed sources, Jet has put off the proposed plan to raise $400 million through a secondary rights issue. I think it’s a pretty wise decision from Jet because the global markets are quite weak at this moment of time and I don’t think Jet will get the valuations that they are looking for.

Company officials claims that Jet is doing well but the fact of the matter is that Jet Airways has only been making money over the previous quarters through sale-leaseback of aircraft. It is worth mentioning in this regard that last quarter (finished in June 2007), Jet Airways declared a net profit of Rs 30.8 crore on revenues of Rs 1,806.7 crore.

If experts are to be believed, Jet requires money because planes cost money. Point to be noted here is that a Boeing 777 costs $250 million, which is why Jet Airways need to raise funds for their expansion plans. It has come into the notice of The India Street that Jet wants to dramatically increase the number of planes in its fleet, particularly the long-haul ones such as the Boeing 777-300ers and the Airbus A330-200s from eight at the moment to as many as 40 by 2011.

In my opinion, Jet Airways is betting big on international services to fatten Jets profits. By the end of next year, Jet Airways will have services from eight Indian cities to Brussels and to eight points in America. Not so long ago, Jet received permission to fly to Kuwait, Muscat and Doha, becoming the first private Indian carrier to be allowed to fly on the lucrative Gulf routes from January 2008.

With Kingfisher also all set to enter the international market, there are some rumors going around in the Indian print media that Jet is playing a prominent part in scuppering Vijay Mallyas plans. Jet Airways is planning to work cohesively with national carrier Air India on the ground handling services part.

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India becomes world’s seventh largest IPO market

By Vipin Agnihotri

The Indian economy is in full form, much like the Indian cricket team. According to experts, Indian companies are flocking to the stock markets in droves to raise capital.

It has come into the notice of The India Street that India has leapfrogged its way to number seven among the worlds biggest IPO markets in the first eight months of this year. In 2006, India was at 14^th position. Furthermore, share of Indian global IPO proceeds is now 3.5 per cent, compared to 1.7 per cent in 2006.

As a matter of fact, IPO mobilization so far this year, at $6.4 billion has already out numbered the $4.8 billion raised last year. In my opinion, the main factor behind this tremendous performance by India were DLFs $2.26-billion IPO, the biggest ever by an Indian company, Genpact $568 million IPO, Idea Cellular $555 million IPO and Power Finance Corporation $226 million IPO.

According to sources, number of IPOs is going to hit the Indian market in the coming months especially from retail and infrastructure companies. Point to be noted here is that the flurry of IPOs is driven by the extended bull run in the Indian equity markets.

No one will argue with the fact that the primary market normally gives better returns as compared to the secondary market in a rising market scenario. This pretty much signifies the retail and institutional interest in IPOs. In addition, interest rates have hardened over the last six months, enhancing the cost of borrowed money and compelling companies across the board to approach the primary market for economical funds in order to finance their expansion plans.

Interestingly, there is more action to come in the near future. In general, there are a big number of unlisted companies that need capital, especially in sectors such as real estate, media, retail, infrastructure and banking.

There is another significant factor that is playing a prominent part in fuelling this boom. Over the last two or three years, private equity investors have taken quite a bit of stakes in technology, media, telecom and pharma companies. They are now interested in making profitable exits.

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Puravankara Projects IPO – The India Street Analysis

Summary

The Issue: With so many real estate IPO’s entering the capital market will there be reasonable returns from this stock in long term?

The Answer: We expect yes as this company is backed by decent financials, good experience and strong marketing network.

Puravankara Projects Limited is a Bangalore based real estate developer company with more than 30 years of presence in Mumbai, Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Colombo and the United Arab Emirates (U.A.E). Its public issue opens July 31, 2007 and closes on August 3, 2007.

Business Overview:

The operations of the company include identification/acquisition of land, planning, executing and marketing of real estate projects. Both residential and commercial projects are executed. Residential projects consist of apartment complexes, villas and townhouses while commercial projects include retail and office premises.

The company was originally incorporated as Puravankara Constructions Private Limited in 1986 at Mumbai. In 1992 it was made a public limited company and the name was changed as Puravankara Projects Limited.

The total land area available is 38.07 million square foot, developable area is 116.24 million square foot and saleable area is 106.80 million square foot.

The company’s real estate development is concentrated primarily in southern India i.e. Bangalore, Chennai and Kochi. It has also acquired roughly 1.06 million square foot of land in Colombo for luxury residential project consisting of independent villas and townhouses.

The list of completed projects so far is given below:

At Mumbai:

Project Name	Saleable area
Uran Park, Mora Road	0.02

At Bangalore:

Project Name	Saleable area
Purva Park, Cox Town	0.50
Castlemaine, Jayamahal Road	0.02
Purva Nest, Cambridge Road	0.01
Purva Graces, Yelahanka	0.17
Purva Iris, Cox Town	0.06
Purva Heights, Bannerghatta Road	0.35
Purva Paradise, Domlur	0.05
Purva Fairmont, Koramangala	0.41
Purva Pavilion, Hebbal	0.24
Purva Parkridge, Marathahalli	0.35
Purva Carnation, Cox Town	0.08
Whitefield Bouganvilla	0.07
Purva Riviera, Marathahalli	1.26

Saleable area is in million square foot.

The company has also completed a commercial project, The Pavilion, on M.G. Road, Bangalore and it is ready for occupation. One more commercial project is being undertaken at Chennai with a saleable area of 0.35 million square foot.

There are 4 residential projects currently under execution at Bangalore on land that is owned by the company with a saleable area of 6.41 million square foot. These are Purva Grande (Lavelle Road), Purva Fountainsquare (Marathalli Junction), Purva Venezia (Yelehanka) and Purva Highlands (Kanakapura Road).

Similarly there are two ongoing projects at Chennai. These are Purva Swanlake (Old Mahabalipuram Road), Purva Jade (Arcot Road) with a total saleable area of 0.92 million square foot. In addition, at Kochi, there are three more projects currently in progress. These are Purva Grand Bay (Marine Drive), Purva Eternity (Kakkanad), Purva Moonreach (Airport Road) with saleable area of 1.86 million square foot.

The company also executes 5 more projects at Bangalore on joint development basis with a total saleable area of 1.44 million square foot.

A view of the Purva Fairmont, HSR Layout, Koramangala, Bangalore

The company has entered into a joint venture (Keppel Puravankara Projects Private Limited) with Keppel Investment Mauritius Private Limited, a subsidiary of the Singapore based Keppel Land Limited. Elita Promenade, a residential project in Bangalore, is being executed with a saleable area of 1.22 million square foot by this joint venture.

Through its IPO the company plans to mobilize Rs.1,125 crores at the upper price band of Rs.525, which shall broadly be used for repayment of loan of Rs.420 crores and Rs.351 crores for acquiring 43.56 million square foot land in and around Sriperumbudur and Kancheepuram near Chennai. After the IPO promotors shall have 89.95% stake in the company.

Financial data:

Item	2003	2004	2005
Income	41.35	76.38	151.03
Expenditure	32.29	59.94	110.60
Profit before tax	9.06	16.44	40.43
Net profit	6.49	15.44	38.02

Item	2006	2007
Income	280.42	416.86
Expenditure	197.81	284.53
Profit before tax	82.61	132.33
Net profit	73.45	130.40

All figures in Rs. Crores.

Comparison with some listed companies:

Company	EPS	P/E	Book value
BLKASHYAP	43.80	35.00	237.80
PENINLAND	57.00	8.60	104.80
ANSAL **	9.40	29.90	80.50
PURVA **	6.80	77.20 *	11.50

* At the upper price band.

** Face value of Ansal and Puravankara is Rs.5.

IPO Details:

• Issue Period: July 31, 2007 to August 03, 2007
• Issue Size: 21,467,610 Equity Shares
• Face Value: Rs. 5
• Price Band: Rs. 500 to Rs. 525
• Market Lot: 10 shares
• Minimum Quantity: 10 shares
• Retail Investor Limit: Rs.100,000

Click here to download application form.

Click here for Red Herring Prospectus.

Conclusion:

Puravankara has a strong presence in southern India, where lot of IT companies have set up their operations. After Sobha Developers, Puravankara is the second Bangalore based realty major to enter the capital markets. The company sells the real estate properties directly to the customers with marketing offices in India and UAE. The strong marketing network will help the company to reach the large NRI population in Gulf countries.

Puravanakara has the industry experience and technical expertise. Moreover, it owns nearly 43% of the developable land which gives a distinct advantage.

At the upper price band Rs.525, EPS of 6.80 and P/E of 77.20, the stock may be slightly expensive but there seems to be some considerable upside, based the growing demand in real estate industry and company’s ongoing / proposed projects.

Sundaramurthy Vadivelu

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IVR Prime Urban Developers IPO: May Want to Avoid in the Short Term

The India Street had previously analyzed three real estate developers IPO’s: DLF, HDIL and Omaxe. In this article let us analyze IVR Prime Urban Developers IPO.

IVRCL Infrastructure and Projects Limited is a Hyderabad based company that is engaged in execution of infrastructure projects like water supply, irrigation, buildings, industrial structures, transportation projects like highways, railways, power transmission projects like substations, transmission/distribution lines and rural electrification. Its subsidiary company, IVR Prime Urban Developers Limited have come out with an IPO (Initial Public Offering) to raise about Rs.720 to Rs.850 crores.

Overview of Business:

Article Summary

The Issue: Should one invest in this slightly overpriced IPO?

The Solution: It’s pretty clear. Wait for a better opportunity!

IVRCL Infrastructure and Projects Limited has about 80% stake in IVR Prime Urban Developers Limited. After the IPO it will come down to about 62%. IVRCL had an order book of Rs.6,637 crores as on September 30, 2006.

IVR Prime has 6 projects in Hyderabad:

Hitec City Project: This is located close to the Hitec (Hyderabad Information Technology and Engineering Consultancy) city and it is a residential cum commercial project. About 266,000 square foot of built up area is available for residential premises; similar area is allocated for commercial purpose.

Hill Ridge Project: Located at Gachibowli, Hyderabad, it is a commercial project with built up area of 866,000 square foot for mall/retail section and 702,000 square foot for IT park. The project includes shopping mall, multiplex, office tower, dining and convention area. Adjacent to the Hill Ridge IT park, a 250 room 5 star hotel project is underway. It is expected to be commissioned in about 2 years from now.

At Gachibowli itself, a residential project known as Hill Ridge Springs is coming up. About 48,500 square foot of area is still to be sold. There will be 2,3,4 bed room apartments, duplex apartments, penthouses, clubhouse, floating gardens, gymnasium, tennis court etc. within the housing complex. Hill Ridge Villas, a 5 bedroom independent Villas project is planned nearby. About 50,000 square foot area is available for sale. Another residential project with total built up area of about 295,000 square foot will come up at Gachibowli.

The following table shows the details of projects at Bangalore:

Location	Type	Built up area
Jigani	Residential	411,600
Prime lake, Begur	Res./Comm.	2,704,000
Green vista, Whitefield	Residential	618,475
Apartment, Whitefiled	Residential	195,000
Kudlu, Hosur Road	Residential	467,200

The following table shows the details of projects at Chennai:

Location	Type	Built up area
Prime Pacific, Sriperumbudur	Residential/ Commercial	23,391,720
Prime Celestial, Vayalur	Residential/ Commercial	20,447,600
Prime Auburn, Minjur	Residential	3,781,500

The following table shows the details of projects at other locations:

Location	Type	Built up area
Visakhapatnam	Residential	4705,350
Paiet, Pune	Residential	1,000,000
Dengaragaon, Pune	Residential	1,742,400
Bhajgaon, Pune	Residential	2,944,000
Sector 121, Noida	Residential	1,076,368
Sector 119, Noida	Residential	780,682
Sector 118, Noida	Residential	2,874,960
Sector 144, Noida (SEZ)	Commercial	2,000,000

It may be noted that IVR Prime has more residential projects than commercial projects. From the above tables, it can be seen that Chennai has more developable area (47 million square foot) that accounts to nearly 70% of the toal.

The proceeds of the IPO will be used to complete projects, repay loans and make payments for development rights.

Financial performance in the past 3 years:

Item	2005	2006	2007
Income	21.85	136.43	147.83
Expenditure	20.63	122.82	110.26
Profit before tax	1.23	13.52	30.85
Profit after tax	0.71	11.70	20.68

All figures mentioned are in Rs. Crores.

The EPS for the year 2007 is 4.60.

IPO details:

Start Date: July 23, 2007

End Date: July 26, 2007

Issue Size: 14,150,000 equity shares

Face value: Rs.10

Price band: Rs.510 to Rs.600

Market lot: 10 shares

Minimum quantity: 10 shares

Retail investor limit: Rs.100,000

Application forms can be downloaded from this link.

Red Herring Prospectus is available from this link.

Following table illustrates the bid status at 1655 IST on July 23, 2007.

Total Issue Size	14150000
Total Bids Received	10150
Total Bids Received at Cut-off Price	9020
No. of times issue is subscribed	0.00

Conclusion:

The company is promoted by well known IVRCL group with an excellent track record in infrastructure and construction projects. IVR Prime has strong support from the parent company for technical expertise. IVRCL itself has a strong order book, and hence additional manpower will be needed for IVR Prime.

The P/E ratio at the lower and upper price bands work out to 111 and 130 respectively. For the construction sector highest P/E is 173, lowest is 2.4 and composite is 32. Hence the IPO may be considered slightly overpriced.

It may be interesting to note that, except the Gachibowli project in Hyderabad, IVR Prime has not executed any other project. The remaining are only in planning or miniscule stage. Moreover, the vast developable area is around Chennai where real estate prices have already gone up recently.

The company owns only 14% of its projected 2,478 acres. It has only development rights for about 58% of land. 21% of the land is in agreement stage. 70% of the land payment is still pending for the company. Considering these factors, it is difficult to visualize reasonable earnings in the near term.

The IVR Prime IPO may not get a good investor response unlike DLF (which has been reasonably well received in secondary market), HDIL or Omaxe.

Sundaramurthy Vadivelu

LABELS: IPO, INDIA STOCK MARKET, IVRCL, IVR PRIME URBAN DEVELOPERS

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Genpact IPO Good Bet Long Term but May have a Shaky Start

Genpact IPO – The India Street Analysis

Introduction:

Genpact Limited, a business process outsourcing company (BPO) based in India plans to raise about USD 700 million through its IPO (initial public offering) at the New York Stock Exchange. The company had filed a registration statement with the Securities and Exchange Commission (similar to SEBI) in US on May 11 this year. The company has proposed a price band of USD 16 – 18 and the issue size is 35.29 million shares. It has requested for the ticker ‘G’ previously used by Gillette a few years ago before it was taken over by Proctor & Gamble. Morgan Stanley, Citi and JPMorgan are the co-lead underwriters.

“Business Process Outsourcing” means relocating entire business functions to either self-owned or third party service providers, typically in low cost locations like India. Two Indian BPO’s have been listed in US so far; WNS Holdings (NYSE) and EXL Service (NASDAQ).

Genpact is registered in the Caribbean island of Bermuda and has operations in China, Hungary, India, Mexico, The Netherlands, Philippines, Romania, Spain, United Kingdom and United States.

The company was formerly known as GE Capital International Services. It was founded in 1997 at Gurgaon, India. General Atlantic and Oak Hill Capital Partners acquired a 62.63% stake in Genpact from General Electric in 2005.

Genpact has 5 sites in India at Gurgaon, Hyderabad, Bengaluru, Jaipur and Kolkata. As of 2007, it has an employee strength of 30,000 globally.

Business Overview:

Genpact serves the following industries: Banking and Finance, Insurance, Manufacturing, Transportation and Automotive.

Banking and Finance:

Genpact has more than 650 associates and 3,500 full time employees serving businesses across USA, Europe, Australia and Asia from its global locations in India, China, USA, Mexico and Hungary. A range of customer end financial products including private label credit cards, dual cards (PLCC with credit card functionality), retail finance, auto finance, personal loans and mortgage are supported. The services include finance and accounting, sales / marketing analytics, customer services and financial services collections / operations.

Insurance:

More than 1,800 employees serve the insurance operations. Life insurance, health insurance, annuities and pensions, mortage insurance, liability insurance and property / casualty insurance are the key areas covered. These services fall into 4 categories viz. insurance policy set up and maintenance, agent support, billing / collections, risk assessment / marketing and IT services.

Manufacturing:

The company serves high end manufacturing industries like power systems, transportation etc. Services include online support, payment collections, procurement assistance and execution, vendor co-ordination, production planning / control and sales / marketing.

Transportation:

Genpact provides customer relationship and trade support, business operations support, finance and accounting, employee services and marketing support to global airlines, travel agencies, logistics service providers, car rental firms etc.

Automotive:

Genpact's service solutions comprise of supporting clients across component and sourcing execution, manufacturing forecasting and planning, financing, after sales and dealer support. It helps its clients gain control over their supply chain costs by providing transactional procurement functions remotely, while also providing inventory management planning through analytical techniques unique to the offshore industry.

Genpact has direct fibre optic connectivity to US, Europe and Australia, thus enabling redundancy for links and equipment. It has more than 500 servers and 10,000 desktops to perform the operations.

The proceeds of the IPO is proposed to be used for repayment of debts outstanding under credit facilities and for working capital and general corporate purposes, including potential acquisitions.

Financial performance in the past:

Description	2004	2005	2006
Income	165.50	187.90	252.20
Expenditure	83.60	171.00	209.00
Net income	81.90	16.90	43.20
Profit before tax	90.20	10.70	33.90
Income tax	6.70	-6.40	-5.90
Net profit	83.40	17.10	39.80

1. All figures are in million USD.

2. The financial year is considered as January – December.

3. It is to be noted that the general, selling and administrative expenses for 2004, 2005 and 2006 were 76.3, 117.5, 159.2 million USD, the main reason for drop in net profits.

Indian companies listed at NYSE:

11 Indian companies are listed at NYSE, out of which 9 are constituents of Nifty. Patni computer systems is a constituent of Nifty Junior index. The full list is as follows: Dr.Reddy’s Laboratories, HDFC Bank, ICICI Bank, MTNL, Patni Computer Systems, Satyam Computer Services, Sterlite Industries, Tata Motors, VSNL, Wipro and WNS Holdings.

WNS Holdings got listed on July 26, 2006. EXL Service got listed at NASDAQ on October 20, 2006. Let us analyze the daily charts of these two stocks, since these are Indian BPO companies listed in US.

We can see the “double top” formation in both the charts between mid November 2006 and mid February 2007. This is a bearish sign. As a result, both the stocks had almost fallen back to their opening price on listing, which is a key support level. In both cases watch the “upward gap” or the “rising window” nearly a month after listing; a “downward gap” or “falling window” just after the first peak in case of EXLS and after the second peak in case of WNS. These indicate nearly identical demand supply gap scenario for both the stocks. EXLS is still bearish; WNS has just begun an upmove and currently in second wave.

EXL Service

http://groups.google.com/group/theindiastreet/web/EXLS.JPG

WNS Holdings

http://groups.google.com/group/theindiastreet/web/WNS.JPG

Charts courtesy: Yahoo! Finance

Conclusion:

As of now, the IPO details are being scrutinized by the SEC. Given the technical scenario of both EXLS and WNS, Genpact may be a shaky starter at NYSE. Another factor to be considered is the exchange rate. An appreciating Indian Rupee, for example, may fetch lower revenues in Indian currency; but the local expenditures, overheads and other expenses may have to be met in local currency. This gives a distinct disadvantage. However, going by the fundamentals, business model, infrastructure, personnel and support services, Genpact is likely to perform well in the long term.

SUNDARAMURTHY VADIVELU

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Omaxe IPO A Good Investment – The India Street Analysis

The India Street analyzed DLF IPO and HDL IPO recently. Another Delhi based real estate developer, Omaxe Limited plans to raise about Rs.605 crores through their initial public offering. The issue opens on July 17 and ends on July 20. The proceeds of the IPO will be utilized to acquire lands, repay loans and to meet construction costs.

The company was originally promoted by Rohtas Goel as Omaxe Builders Private Llimited in 1989. The primary objective was to venture into construction and contracting business. It became a limited company in 1999 and the name got changed as Omaxe Construction Limited. Now it is just Omaxe limited. The company has executed more than 120 industrial, institutional, commercial, residential and hospital construction projects. Omaxe entered into real estate development in 2001.

Within about 5 years of its entry, it has completed and delivered 10 projects (8 residential and 2 commercial) covering approx 5.13 million square foot area, with on time schedule. About 52 projects are in currently in progress. These include 1 hotel, 14 commercial complexes / shopping malls, 16 integrated townships and 21 group housing projects. Omaxe has declared land reserves of 3,255 acres, representing 150 million square foot of developable area, mainly in North India, but spread across nine states.

The company has received several awards such as ‘Svedala’, ‘Udyog Ratna', ‘Pride of the Country', ‘Arya Vaidya Sala' for excellence in construction.

The following tables show the company’s residential projects:

Delhi:

Location	Name	Status
Bahadurgarh	Omaxe North Avenue	In progress
Faridabad	Green Valley Omaxe Hills Omaxe Heights The Forest	Delivered In progress Delivered In progress
Location	Name	Status
Ghaziabad	Habitat Floors	Delivered
Greater Noida	NRI City Omax Palm Greens	Delivered Future plans
Gurgaon	The Nile South Avenue Mayfield Garden Olive Apartments Executive Floor	Delivered Delivered Delivered Delivered Delivered
Noida	The Forest Royal Residency Grandwoods Omaxe Twin Towers The Forest Spa	Delivered Delivered In progress In progress In progress

Designer Villas at South Avenue, Gurgaon

Haryana:

Location	Name	Status
Palwal	Omaxe City	In progress
Rohtak	Omaxe City	In progress
Sonepat	Omaxe City	In progress

Himachal Pradesh:

Location	Name	Status
Baddi	Omaxe Park Woods	In progress

Madhya Pradesh:

Location	Name	Status
Indore	Omaxe City Omaxe City II	In progress Future plans

Punjab:

Location	Name	Status
Derabassi	Omaxe Greens	In progress
Patiala	Integrated Township	Future plans
Ludhiana	Royal Residency	In progress

Rajasthan:

Location	Name	Status
Bhiwadi	Group Housing	Future plans
Jaipur	Omax City	In progress

Uttaranchal:

Location	Name	Status
Rudrapur	Omaxe Riveria	In progress

Uttar Pradesh:

Location	Name	Status
Ghaziabad	Habitat Floors	In progress
Lucknow	Omaxe City Omaxe Heights	In progress In progress

The following tables show the company’s commercial projects:

Delhi:

Location	Name	Status
Jasola Wazirpur	Omaxe Citadel Pearls Omaxe	In progress In progress

Haryana:

Location	Name	Status
Gurgaon	Omaxe Plaza Wedding Mall House2Home	Delivered In progress In progress
Sonepat	Omaxe Mall	Future plans

Punjab:

Location	Name	Status
Amritsar	Omaxe Terminal Mall Omaxe Novelty Mall	In progress In progress
Ludhiana	Omaxe Plaza Omaze Mall	In progress In progress
Patiala	Wedding Mall	In progress

Pearls Omaxe at Wazirpur, Delhi

Uttar Pradesh:

Location	Name	Status
Agra	Wedding Mall	In progress
Greater Noida	Omax Arcade NRI City Centre Omaxe Cannaught Palace	Delivered In progress In progress
Indirapuram	Park Plaza	In progress
Lucknow	Omaxe City Centre	In progress

Except Omaxe Plaza at Gurgaon and Omaxe Arcade at Greater Noida (which have been sold), rest of the commercial projects are ‘Lease only’ model.

The company has got ISO 9001 certification from Det Norske Veritas (DNV), The Netherlands.

Financial performance in the recent past:

(All figures in Rs. Crores)

Item	2004	2005
Income	283.73	396.60
Expenditure	264.18	367.02
Profit before tax	17.24	26.37
Net profit	8.35	5.04

Item	2006	2007
Income	819.86	1,439.68
Expenditure	667.27	1,083.99
Profit before tax	146.70	322.32
Net profit	118.82	257.26

It can be noted from the above tables that the net profit has gone up from Rs. 5 crores in 2005 to about Rs.257 crores in 2007. This indicates strong demand for the real estate sector during this period.

The following table compares the EPS and book value among some listed real estate companies in India.

Company	EPS	Book value
Omaxe	16.72	29.87
Mahindra Gesco	3.50	189.30
Unitech	7.90	2.80
Parsvnath	5.7	69.9
Sobha	22.2	118.3

IPO details:

• Start Date: 17 July, 2007
• End Date: 20 July, 2007
• Issue Size: 1,77,96,520 shares
• Face Value: Rs.10
• Price Band: Rs.265 – Rs.310
• Market Lot: 20 shares
• Minimum Quantity: 20 shares

Download the RHP (Red Herring Prospectus) here.

Conclusion:

The company’s success has been primarily attributed to professionalism and transparency. It has successfully established in the real estate sector after starting as a civil engineering contractor. The track record of the company in executing the projects is exceptional. At the offer price of Rs.265 – Rs. 310, the P/E ratio is 18 to 20 times the company’s consolidated earnings for 2006 - 07 on the expanded equity base. The offer is at a discount to companies of a similar size in the real estate sector.

Some of its major competitors are concentrated in and around Delhi like DLF, Unitech etc. So this company faces tough challenges since they have to compete with better known players. It also has relatively lesser experience in this field than their main competitors.

Investment can be considered in the IPO with a long term perspective.

SUNDARAMURTHY VADIVELU

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