PSP Projects IPO: HEM Securities recommend to 'subscribe' for long term

Hem Securities | July 19, 2010, midnight


Co is a multidisciplinary construction company offering a diversified range of construction and allied services across industrial, institutional, government, government residential and residential projects in India. Co provide its services across the construction value chain, ranging from planning and design to construction and postconstruction activities to private and public sector enterprises. Historically, co have focused on projects in the Gujarat region. One of the first major projects that co completed was the construction of the GCS Medical College, Hospital and Research Centre (managed by the Gujarat Cancer Society) in June 2012. Subsequently, co have successfully executed a number of prestigious projects, including, inter alia, the construction and interior works of Swarnim Sankul 01 and 02 at Gandhinagar, the construction of the Zydus Hospital at Ahmedabad, and various works in relation to the Sabarmati Riverfront Development project at Ahmedabad. Since co’s incorporation in August 2008, co have executed 80 projects as of March 31, 2017.The issue consists of offer for sale of 28,80,00 Equity shares & fresh issue of 72,00,000 Equity shares for funding working capital & capex requirement upto Rs 63 & Rs 52 Cr respectively.


Reasons to "Subscribe"


Co have completed or is currently undertaking projects for a number of reputed customers, including, inter alia, Cadila Healthcare Limited, Care Institute of Medical Sciences Limited (CIMS), Claris Injectables Limited, Emcure Pharmaceuticals Limited, Gelco Electronics Private Limited, GCS Medical College, Hospital and Research Centre, the Government of Gujarat (through the Executive Engineer, Capital Project Division), Inductotherm (India) Private Limited, Intas Pharmaceutical Limited, Kaira District Co-operative Milk Producers’ Union Limited (Amul Dairy), KHS Machinery Private Limited, Nirma Limited, Sabarmati River Front Development Corporation Limited, Torrent Pharmaceuticals Limited and WTC Noida Development Company Private Limited. Company’s total order book as of March 31, 2017, was Rs 7,291.65 million, which comprised of 17 institutional projects, four industrial projects, four government projects and two government residential projects.


Valuation


At price band of Rs 205-210 ,co is bringing the issue at p/e multiple of around 20.61-21.11 on FY17 annualized Eps of Rs 9.54/share. Although co has strong track record but looking after valuations issue looks almost fully priced at current levels with nothing much has been left for investors on table. Hence we recommend "Subscribe" on issue for long term.

 

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