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KNR Constructions to tap the capital market

KNR Constructions Limited, an infrastructure project development company providing engineering, procurement and construction services across various fast growing sectors; will enter the capital market soon with an IPO of 7874,570 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

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KNR Constructions Limited (the "Company"), an infrastructure project development company providing engineering, procurement and construction services across various fast growing sectors; viz., roads & highways, irrigation and urban water infrastructure management, will enter the capital market soon with an Initial Public Offering ("IPO") of 7,874,570 equity shares of Rs 10 each for cash at a price ("Equity Shares") to be decided through a 100% book-building process. CRISIL has assigned a CRISIL IPO Grade '3/5' to the proposed IPO.  

The Issue comprises a Net Issue to public of 7,734,570 Equity Shares of Rs 10 each and a reservation of upto 140,000 Equity Shares of Rs 10 each for cash at a premium. The Issue and the Net Issue will respectively constitute 28.00% and 27.50% of the fully diluted post-issue Equity Share capital of the Company. The Equity Shares are proposed to be listed on the Bombay Stock Exchange Ltd. ("BSE") and the National Stock Exchange of India Ltd. ("NSE").

The proceeds from this Issue are intended to be deployed for further equity investment in BOT projects, purchase of capital equipment and for meeting working capital requirements.

Incorporated in 1995, KNR Constructions Ltd. has in the past executed infrastructure projects independently as well as through joint ventures. Currently, most of the road projects under execution are with its joint venture partner, Patel Engineering Limited with whom it has business association for the past 7 years. As on June 30, 2007, it has 24 projects on hand across various states in India covering Uttar Pradesh, Madhya Pradesh, Assam , Andhra Pradesh, Karnataka, and Tamil Nadu. The Company has the ability to bid, execute and implement medium and large size projects across various infrastructure segments. Its project execution strength primarily lies in road transportation engineering projects namely construction and maintenance of roads, highways, flyovers and bridges wherever integral to the projects undertaken.

The estimated unexecuted order book position as at June 30, 2007 was Rs. 12,729.84 million, which is approximately 4 times the operational income of FY 2006-07 on consolidated basis. The Company's operating income (consolidated) increased to Rs 3, 244.16 million in Fiscal 2007 as compared to Rs 1,293.26 million in Fiscal 2005. Its restated profit after tax (consolidated) increased to Rs 202.64 million in Fiscal 2007 as compared to Rs 46.74 million in Fiscal 2005.

KNR Constructions Ltd. has significant experience and strong track record in timely and successful execution of projects. It has earned significant reputation and goodwill in road construction sector, as demonstrated by the repeat orders received by it on continuous basis. It has a good clientele base and qualified and experienced employees led by a proven management team. It has expertise in sourcing and maintaining supply chain for raw material and a strong order book position.  

The Company has successfully completed major projects such as: a) the four-laning of NH-24 from Km.27.643 to 48.638 and construction of the Hapur Bypass in Uttar Pradesh; b) rehabilitation and upgrading of Surat-Manor section of NH-8 (Gujarat); c) widening to 4 lanes and rehabilitation of existing 2-lane carriageway of Krishnagiri-Vaniyambadi section of NH-46 (Tamil Nadu); d) widening to 4/6 lanes and strengthening of the existing 2-lane carriageway of NH-5 in the state of Andhra Pradesh from km.178.00 to 222.00 (Nellore-Kavali) in Andhra Pradesh; and e) major maintenance works under Uttar Pradesh State Road from Azamgarh to Ghazipur. 

The Company intends to achieve its growth objectives by maintaining performance and competitiveness of existing business to capitalize on huge investments expected to be made in infrastructure development especially in segments where it presently operates. It will enhance focus on BOT based projects in the infrastructure sector; irrigation and water supply projects; urban water infrastructure management projects; and projects involving higher degree of engineering skills. It seeks to leverage its business growth by identifying and forming strategic joint venture relationships for mutual benefit through sharing of resources and business skills.

The Book Running Lead Manager ("BRLM") to the Issue is Axis Bank Limited.

Sourced From: Adfactors Public Relations Pvt Ltd