ARSS Infrastructure IPO opens; should you subscribe?

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ARSS Infrastructure IPO opens; should you subscribe?

The initial public offering (IPO) of Orissa based infrastructure company, ARSS Infrastructure Projects has opened for subscription. While talking to Moneycontrol.com, experts as well as brokerage houses recommended subscribing to the issue

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Hem Securities

With the robust order book and strong growth plans, company seems to be reasonably priced at present level. Hence we recommend investor to subscribe the issue.

Swastika Investmart

ARSS Infrastructure's IPO is aimed at funding its capital requirements for various Joint ventures and also its future working capital requirements. The company has developed expertise in railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. It has successfully completed over 200 kms of rail line and over 300 kms of roads and highways.

Considering the long-term infrastructure story in the country to continue and ARSS's significant experience in this field, company is expected to have its own share of projects procuring in future. Hence, we recommend applying for the issue with price target of Rs 525-575 in medium term. Listing gains on stock can also be seen.

About the issue

The company is engaged in the business of construction activities in India. It undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects.

The proceeds of the issue are intended to be deployed for investment in joint ventures (at a cost of Rs 5 crore) and funding long-term working capital requirement (cost of Rs 86 crore). The rest of amount will be used for issue expenses and general corporate purpose.

Its clients' list includes Ministry of Railways, State Government of Orissa, Rail Vikas Nigam Limited, RITES Limited, IRCON International Limited, National Thermal Power Corporation, Hindustan Steel Corporation Limited, PWD - Orissa, IOCL and the National Highway Authority of India. The company has presence in Eastern India, particularly in the state of Orissa.
 
The book running lead managers to the issue are IDBI Capital Market Services Ltd and SBI Capital Markets Ltd. Bigshare Services Private Ltd is the registrar.