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IL&FS Transportation's valuations attractive: Nirmal Bang
Nirmal Bang has come out with a research note on IL&FS Transportation Networks' (ITNL) IPO. The broking firm has recommended subscribing to the issue with a long term view.
Nirmal Bang has come out with a research note on IL&FS Transportation Networks' (ITNL) IPO. The broking firm has recommended subscribing to the issue with a long term view.
ITNL will raise upto Rs 700 crore through its IPO, which will close on March 15. The price band is at Rs 242-258 per share.
The report says, "At the upper band of the price band (Rs 258), ITNL would be trading at a P/E of 21.2 x and at the lower band it would be trading at a P/E 20.07x on annualized earnings of 1H FY10. Post dilution, EV/EBITDA for the company would be 10.76 on the upper band and 10.36 on lower band on annualized EBITDA of 1H FY10. Compared to IRB Infra which is a similar player in the industry currently trades at a P/E of 28.2x and an EV/EBITDA of 15.6x. P/BV of ITNL at the upper band is at 3.12x (post issue) as compared to 6.9x of IRB. Considering that ITNL is a much larger player compared to IRB in terms of revenues we believe that at the upper band of Rs 258 ITNL is not very expensive. Based on the attractive valuation for ITNL we recommend to subscribe to the IPO with a long term view."
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