Subscribe to ARSS Infrastructure IPO: SPA Securities

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SPA Securities has come out with a research report on ARSS Infrastructure Projects IPO. The research firm has recommended subscribing to the issue, in its report dated February 8, 2010.

The Rs 103 crore initial public offering (IPO) of Orissa based infrastructure company opened for subscription. The price band is at Rs 410-450 per share and the issue will close on February 11, 2010.

The report says, "The shares of ARSS are available at a P/E of 9.1x & 10x on the lower end & upper end of the price band respectively on the annualised FY10E EPS of Rs.45. This is in line to peers which are available in the same range. 87.5% of the order book is from the government of India & their associated state entities. ARSS is the leader in getting railway contracts in Orissa with a strike rate of 80%."

"The margins of ARSS are on the higher side in the industry. ARSS has shown a CAGR of more than 115% from FY06 to FY09 in its topline & 145% in its bottomline. This coupled with the large order book of Rs 28.78 billion (4.6x FY09 revenues), gives strong visibility in the earning capacity of the firm. Hence we recommend, Subscribe to the issue," according to SPA Securities report.

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To read the full report click on the attachment