vengabeats
Nilesh Nagdev
Unity Infraprojects Ltd. Issue Open On 19th May
Issue Open 19/05/2006
Issue Close 24/05/2006
Issue Size 3443000
Issue Type Book Building
Face Value Rs.10/-
Price Range Rs.651/- to Rs.732/-
Tick Size Re1/-
Market Lot 9
Minimum Order Qty 9
Listing Stock Exchange Mumbai, NSE
Registrar To The Issue Karvy Computershare Pvt Ltd
Book Running Lead Managers DSP Merrill Lynch Ltd.
Registered Office Address 1252, Pushanjali Apartments, Old Prabhadevi Road, Prabhadevi, Mumbai - 400 025
Phone 91 - 22 - 56665500 Fax 91 - 22 - 56665599
Email [email protected]
Website Unity Infraprojects Ltd.
Analysis
Background :
Unity Infraprojects Limited (UIL) was incorporated as Unity Builders Limited in 1997. Company changed its name to the current in August,2000.
UIL has been involved into construction of both civil (76% of revenue) as well as infrastructure projects such as building roads, bridges, flyovers and subways; and irrigation and water supply projects.
Company's current orderbook position comprises of 67% orders from government sector. Its client base includes Airports Authority of India; The National Sports Club of India; Northeast Frontier Railway; Department of Irrigation, Government of Andhra Pradesh; Public Works Department, Government of Assam; Municipal Corporation of Greater Mumbai; and Delhi Development Authority.
The company has aggregated Rs 29.4 crore through a pre-IPO placement of 6 lakh equity shares at a price of Rs.490 each. A preferential allotment, of 4.5 lakh equity shares to Aeneas Evolution Portfolio Ltd and 1.5 lakh equity shares to Prudential ICICI Mutual Fund.
UIL is entering the capital market with an offer of 34.43 lakh equity shares through a 100% book building issue comprising of 6.75 lakh equity shares on offer for sale by promorters.
Upon completion of the issue, promoter's holding will get reduced to approximately 69.48% of the post issue equity share capital from current 94%.
Objects of Issue :
To purchase capital equipments with an investment of Rs.45crore
To repay high cost debt of Rs.45crore
To Invest in BOT Projects, investment worth Rs.30crore
To fund working capital margin requirements of Rs.20crore
For general corporate purposes and other expenses
Strengths :
Company has a strong and diverse order book position including civil construction, transportation engineering and irrigation & water supply projects. It has confirmed orders in hand worth Rs. 1,391crore as on 8th May 2006 of which 70% of projects are expected to complete within FY2008.
Company's total operating income has increased at a CAGR of 67% from Rs.48crore in FY01 to Rs.268crore in FY05. While the net profit of the company witnessed growth CAGR of 49% for the same period.
UIL will be using Rs.45crore to repay its high interest cost debt. This will help company to save approximately Rs.4.4crores in interest cost.
The company has both expertise and experience in the most upcoming segments of the industry. Though its 76% of sales in FY05 came from civil projects, UIL has expertise in constructing bridges, rail roads, roads & flyovers and irrigation & water supply projects. Its outstanding orderbook comprises of 50% of infrastructure projects.
Company is present in the construction industry which is witnessing high growth fueled by the large spends on the ongoing infrastructure development projects by the Government of India. Over Rs.60,000 crores of investment is expected to be made in key infrastructure sectors like road, ports, railway and power plants in the next five years. Sector is expected to grow at 15% CAGR for next few years.
Weakness :
Even though the company is expecting 33% growth in sales YOY (annualized), its debtors/sales ratio has gone up from 34% in FY05 to 58.5% in December 2005.
UIL's top 10 projects accounts for nearly 60% of the company's orderbook position. Failure to comply\execute any of these orders will have adverse impact on company's financial performance.
Construction is highly competitive industry; competition varies depending on the size, nature and complexity of the projects. UIL being comparatively small player with FY05 sales of Rs.250 crore will have to face stiff competition from the large players like Gammon India, IVRCL, Nagarjuna constructions having sales of more than Rs.1000 crore, whom company sees as its major competitors.
Company does not have in-house design capability also it uses third-party transportation facilities.
Construction industry is highly dependend on timely & adequate supply of key raw materials like cement, steel etc. also fuel forms one of the major cost component. In current scenario prices of all are firming up which can have an adverse effect on company's profit margins as company has not entered into any long-term contracts with its suppliers.
Valuation :
UIL's operating profit margins have improved for the period Mar-Dec. 2006 to 7.3% from 4.3% in FY05. Operating profit margin of the company has gone up to 14.2% from 9.5% for the same period.
The company's net worth as on 31st Dec2005 is Rs.60.6 crore & it's return on net worth (RONW) is 26.9% . Its book value is Rs.60.7 per share.
Post issue annualized EPS based on 30th December 2005 earnings is Rs.16.3 per share. The shares are being offered in the price band of Rs. 651-732. At P/E range of 40-45. The average industry P/E is 65.
Source:-Indiabulls
Issue Open 19/05/2006
Issue Close 24/05/2006
Issue Size 3443000
Issue Type Book Building
Face Value Rs.10/-
Price Range Rs.651/- to Rs.732/-
Tick Size Re1/-
Market Lot 9
Minimum Order Qty 9
Listing Stock Exchange Mumbai, NSE
Registrar To The Issue Karvy Computershare Pvt Ltd
Book Running Lead Managers DSP Merrill Lynch Ltd.
Registered Office Address 1252, Pushanjali Apartments, Old Prabhadevi Road, Prabhadevi, Mumbai - 400 025
Phone 91 - 22 - 56665500 Fax 91 - 22 - 56665599
Email [email protected]
Website Unity Infraprojects Ltd.
Analysis
Background :
Unity Infraprojects Limited (UIL) was incorporated as Unity Builders Limited in 1997. Company changed its name to the current in August,2000.
UIL has been involved into construction of both civil (76% of revenue) as well as infrastructure projects such as building roads, bridges, flyovers and subways; and irrigation and water supply projects.
Company's current orderbook position comprises of 67% orders from government sector. Its client base includes Airports Authority of India; The National Sports Club of India; Northeast Frontier Railway; Department of Irrigation, Government of Andhra Pradesh; Public Works Department, Government of Assam; Municipal Corporation of Greater Mumbai; and Delhi Development Authority.
The company has aggregated Rs 29.4 crore through a pre-IPO placement of 6 lakh equity shares at a price of Rs.490 each. A preferential allotment, of 4.5 lakh equity shares to Aeneas Evolution Portfolio Ltd and 1.5 lakh equity shares to Prudential ICICI Mutual Fund.
UIL is entering the capital market with an offer of 34.43 lakh equity shares through a 100% book building issue comprising of 6.75 lakh equity shares on offer for sale by promorters.
Upon completion of the issue, promoter's holding will get reduced to approximately 69.48% of the post issue equity share capital from current 94%.
Objects of Issue :
To purchase capital equipments with an investment of Rs.45crore
To repay high cost debt of Rs.45crore
To Invest in BOT Projects, investment worth Rs.30crore
To fund working capital margin requirements of Rs.20crore
For general corporate purposes and other expenses
Strengths :
Company has a strong and diverse order book position including civil construction, transportation engineering and irrigation & water supply projects. It has confirmed orders in hand worth Rs. 1,391crore as on 8th May 2006 of which 70% of projects are expected to complete within FY2008.
Company's total operating income has increased at a CAGR of 67% from Rs.48crore in FY01 to Rs.268crore in FY05. While the net profit of the company witnessed growth CAGR of 49% for the same period.
UIL will be using Rs.45crore to repay its high interest cost debt. This will help company to save approximately Rs.4.4crores in interest cost.
The company has both expertise and experience in the most upcoming segments of the industry. Though its 76% of sales in FY05 came from civil projects, UIL has expertise in constructing bridges, rail roads, roads & flyovers and irrigation & water supply projects. Its outstanding orderbook comprises of 50% of infrastructure projects.
Company is present in the construction industry which is witnessing high growth fueled by the large spends on the ongoing infrastructure development projects by the Government of India. Over Rs.60,000 crores of investment is expected to be made in key infrastructure sectors like road, ports, railway and power plants in the next five years. Sector is expected to grow at 15% CAGR for next few years.
Weakness :
Even though the company is expecting 33% growth in sales YOY (annualized), its debtors/sales ratio has gone up from 34% in FY05 to 58.5% in December 2005.
UIL's top 10 projects accounts for nearly 60% of the company's orderbook position. Failure to comply\execute any of these orders will have adverse impact on company's financial performance.
Construction is highly competitive industry; competition varies depending on the size, nature and complexity of the projects. UIL being comparatively small player with FY05 sales of Rs.250 crore will have to face stiff competition from the large players like Gammon India, IVRCL, Nagarjuna constructions having sales of more than Rs.1000 crore, whom company sees as its major competitors.
Company does not have in-house design capability also it uses third-party transportation facilities.
Construction industry is highly dependend on timely & adequate supply of key raw materials like cement, steel etc. also fuel forms one of the major cost component. In current scenario prices of all are firming up which can have an adverse effect on company's profit margins as company has not entered into any long-term contracts with its suppliers.
Valuation :
UIL's operating profit margins have improved for the period Mar-Dec. 2006 to 7.3% from 4.3% in FY05. Operating profit margin of the company has gone up to 14.2% from 9.5% for the same period.
The company's net worth as on 31st Dec2005 is Rs.60.6 crore & it's return on net worth (RONW) is 26.9% . Its book value is Rs.60.7 per share.
Post issue annualized EPS based on 30th December 2005 earnings is Rs.16.3 per share. The shares are being offered in the price band of Rs. 651-732. At P/E range of 40-45. The average industry P/E is 65.
Source:-Indiabulls