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Simplex Projects looks to be a good issue: Experts

Published on Tue, Jul 10, 2007 at 10:35 | Source : Moneycontrol.com

Updated at Tue, Jul 10, 2007 at 16:01

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Simplex Project

BSE | NSE 13/02/12

Are Mutual Funds betting on Simplex Project?

Simplex Projects, Integrated engineering and construction service provider, is open for subscription with an initial public issue of 30-lakh equity shares of Rs 10 each in the price band of Rs 170-Rs 185 through a 100 per cent book building process.

Moneycontrol conducted a poll on market experts to check whether to apply for the public issue or not. Experts said apply.

Experts/Company	Poll Result	Experts view
R S Iyer (KR Choksey)	Apply	Looking at the good response to DLF, where investors got full allotment and markets at 15000 mark, it's an easy entry for other issues. In that league, one is Simplex projects. It is a good issue. Investors can apply for the same.
Manish Bhatt (Prabhudas Lilladher)	Apply	Simplex Projects looks to be good issue. Investors can subscribe the issue.
SP Tulsian (Investment Advisor)	Apply	The company is a construction and engineering firm providing construction services for civil and structural construction and infrastructure sector projects. The company has to catch on, for which huge working capital would be required. During FY 04 to FY 06, growth of the company on topline and bottomline was mediocre. The presence of the company is mainly into eastern region. The company has chalked out a capex plan of Rs 55 crore mainly for working capital (Rs 35.55 crore), Rs 13.88 crore for plant and machinery and Rs 6 crore for investment in its subsidiary for car park projects. This project is quite interesting and has huge scalability. Only concern is whether the company would be able to exploit its potential on Pan-India basis as many other players are preparing themselves to enter into this field. The past performance, baring FY 07, does not attract as also its higher equity base of Rs.12 crore and lower topline volume. Regional presence is also negative. However, car park project is quite interesting. Share at upper band is definitely not worth and even at lower band is quite expensive. But still if someone wants to plunge in, can take it by considering it as chhota Simplex.

The issue closes on July 13. The net issue will constitute 25 per cent of the fully diluted post issue paid up capital of the company.

No more than 50 per cent of the net issue will be available for allocation on a proportional basis to qualified institutional buyers. Five per cent of the QIB portion is for allocation on a proportionate basis to mutual funds only. The remainder is for allocation on a proportionate basis to QIBs and mutual funds.

Further, not less than 15 per cent of the net issue will be available for non- institutional bidders and not less than 35 per cent of the net issue will be available for allocation on a proportionate basis to retail individual bidders.

The company has reported a profit after tax of Rs 10.49 crore for the fiscal 2006-07 on a turnover of Rs 136.24 crore.

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