IRCON IPO GMP, Review, Price, Allotment, Subscription
IRCON International is an integrated Indian engineering and construction company, specializing in major infrastructure projects, including railways, highways, bridges, flyovers, tunnels, aircraft maintenance hangars, runways, EHV sub-stations, electrical and mechanical works, development of industrial areas and other infrastructure activities.
IRCON International was incorporated in 1976 by the government and the firm specializes in railway and highway construction, EHP sub-stations and mass rapid transit systems. While the company has so far completed around 300 infrastructure projects in India and more than 100 projects overseas, its overseas portfolio has gone down of late. “Three years back, almost 50% of the company’s turnover used to come from abroad.
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On valuation front, at higher price band, the company is demanding a P/E valuation of 10.9x (to its restated FY18 EPS of Rs. 43.8). Moreover, based on FY19 and FY20 earnings, the forward P/E comes out to 9.9x and 8.4x, respectively. Thus issue seems to be attractively priced considering its strategic importance in the Indian Railway, future growth outlook, limited competition, virtually debt-free operations and healthy financial performance. Thus considering the above observation we assign a “SUBSCRIBE” rating to the issue.
IRCON is the largest PSU carrying out EPC projects in railways. It faces no competition domestically for all projects it bags from the railway ministry as they are on nomination basis. IRCON is on a strong footing on the back of revival in government capex in railways and roads since FY16 which has translated into topline CAGR of 29% over FY16-18 for the company. IRCON has one of the highest order book to sales ratio across all EPC companies at 5.6x FY18 sales and possesses a healthy balance sheet which can support further growth in order book. By leveraging its strong execution skills in railways, IRCON has successfully created an additional growth engine in the form of roads which now contributes 21% to the company’s revenue. IRCON is being offered at a valuation of 10.9x FY18 (vs. Pvt road EPC companies’ average of 19.3x). Thus based on the business capabilities, industry growth prospects and valuations, we believe IRCON is attractively priced and recommend subscribing to the issue.
Ircon’s revenues grew at 29.4% CAGR to | 4001.2 crore in FY16-18. The order book was at a robust | 22407 crore, which implies an order book to bill ratio of 5.6x on FY18 numbers, indicating revenue growth getting better ahead. At the IPO price band of | 470-475, the stock is available at 10.7-10.9x FY18 EPS. Adjusting for subsidiary investments worth ~| 700 crore, the issue is available at 9.2x FY18 EPS on higher band, which is attractive valuation vis-à-vis its peer companies. Hence, we have a SUBSCRIBE recommendation on the issue at the offer price only for listing gains.
IRCON International Ltd. (IRCON) stands to gain from operating leverage and also raise Stability from government infrastructure projects. At a P/E of 11.2x we believe that IRCON a discount to its domestic peers. We assign a Subscribe rating to the IPO.
The valuation on a trailing basis works out to 11.2x and 11.3x FY18 P/E on the lower and upper band of Rs 470 and Rs 475, respectively. We recommend a SUBSCRIBE.
The co is bringing the issue at p/e multiple of approx. 10.86 on annualized post issue FY18 eps at price band of Rs 470-475/share. Company’s business operates in diverse sectors covering many countries have excellent execution track record through strong operating systems and controls. Company’s order book is robust which gives strong revenue visibility & steady execution. Looking after all above we recommend “Subscribe” on issue.
IRCON IPO Review By MyIpo
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Note: Listing gain depend on listing day market situation. (Ex: Cochin Shipyard, Karda Construction)
IRCON IPO Details
- IPO Open : 17-Sep-18
- IPO Close : 19-Sep-18
- IPO Size : 466.70 Cr
- IPO Lot Size : 30 (Minimum Lot)
- Price Band : 470-475 Per Share
- Retail Discount : 10 Per Share
- Minimum-Amount : 13950 (amount after discount)
- Retail Portion : 35% and (163.35 Crs at upper price band)
- Listing On : NSE - BSE
- Face Value : 10 Per Equity Share
- Equity : 9905157 Share
IRCON IPO Allotment & Listing
- Allotment Ratio: 1 : 8 (Approx)
- Allotment : 26-Sep-18
- Refund : 26-Sep-18
- Credit To Demat A/C : 27-Sep-18
- Listing : 28-Sep-18
- Allotment Link : Link 1
IRCON IPO Valuation of Peers Group Companies
There are no comparable listed companies in India engaged in the same line of business.
IRCON IPO Anchor Investors
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IRCON IPO Subscription (no of times)
IRCON IPO Listing Details
IRCON IPO live quote: Click Here
IRCON Financial Performance
|Figure in Cr||FY2013||FY2014||FY2015||FY2016||FY2017||FY2018|
|Profit After Tax||804.9||747.0||570.1||362.4||397.7||413.0|
IRCON IPO Registrar
Karvy Computershare Private Limited
Karvy Selenium Tower B, Plot 31-32,
Hyderabad – 500 032, Telangana
Phone: +91 40 6716 2222
Email: [email protected]
IRCON International Limited
Plot no. C – 4
District Centre, Saket
New Delhi – 110017
Phone: +91 11 2956 5666
Email: [email protected]
- Ministry of Railways (India)