SVEC Constructions, a Hyderabad based company is open for subscription with an initial public offering of 40 lakh equity shares of Rs 10 each. The issue, which is being made through a 100 per cent book building process, closes on February 8. The price band has been fixed at Rs 85-Rs 95.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Majority of experts said don't apply.

Experts/Company	Poll Result	Experts view
R S Iyer (KR Choksey)	Don’t Apply	People should stay away from IPOs for the time being. They have to wait till the listing of Reliance Power.   Depend on the stability of secondary market, one can enter the capital market as at this stage, people can get good companies at cheap price in current market situation in secondary market. So why should apply for this company at such a high price?
Manish Bhatt (Prabhudas Lilladher)	Apply	SVEC Constructions is an average issue. It is available at PE of 13.5-15 at price band of Rs 85-95 per share. People can subscribe to this issue at lower end of price band.
SP Tulsian (Investment Advisor)	Don’t Apply	One more construction and contracting issue, which is from a small company, vying to grow big. The company has been growing at 50%, in the last couple of years, with PAT margin of about 5%.   For 6 months ending September 07, topline was at Rs 65 crore, with PAT of Rs 3.40 crore. Though second half of all the construction companies are better, still, topline beyond Rs 200 crore, cannot be expected of the company, for FY 08. Orders on hand, with the company, as at 30-11-07 are of Rs 522 crore, which would get executed in the next 2 years, considering a growth of 35% to 40%. This kind of growth is nothing out of the ordinary, being posted by other players in the sector.   Post IPO, equity of the company, would rise to Rs 15.92 crore, which will be quite high, when compared to existing listed players. FY 08 EPS would remain below Rs 8 even on pre-IPO equity and would be around Rs 6, on post issue. This translates into a PE multiple of about 16 times at the upper band and at about 14 times on the lower band of Rs 85. There are many stocks available with better topline and better profit margins, at a PE multiple of about 10 times.   Hence, it is advisable to give a pass to the issue and go for better ideas available in the secondary market.

The company, which has experience in the areas of building and irrigation works, plans to raise between Rs 34 crore-Rs 38 crore.

The company plans to deploy funds for the purchase of capital equipment worth Rs 15.32 crore and for meeting the long-term working capital requirements estimated at Rs 23.86 crore.

The company’s order book position as on November 30, 2008 stands at Rs 521.91 crore.

The book running lead managers to the issue are Karvy Investor Services Ltd and Centrum Capital Ltd.