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Vascon Engineers IPO opens: Should you subscribe?
The initial public offering (IPO) of 10,800,000 equity shares of Vascon Engineers, an engineering, procurement and construction (EPC) services and real estate development company, opened for subscription. Experts looked divided in their opinion while talking to Moneycontrol.com.
Even the present net worth of the company at Rs. 450 crores does not justify such valuations. There are many players available in this space, in the secondary market, which are ruling at 50% valuations, of the primary market valuations asked by the company. Clear advice is to avoid the issue.
Manish Bhatt
One should subscribe to Vascon Engineers IPO with short to medium term view, which looked to be good. One can get 10% returns on listing day atleast.
The issue would be constituted 11.95% of the fully diluted post issue paid-up capital of the company and the net issue would be constituted 11.84% of the fully diluted post issue paid-up capital of the company.
Promoters' shareholding will be reduced to 38.41% post issue, which includes 13.19% stake of R Vasudevan and Lalitha Vasudevan.
For the year ended March 31, 2009, the company has reported net profit of Rs 31.27 crore on total income of Rs 524.76 crore.
The issue proceeds will be used for construction of EPC contracts & real estate development projects; repayment of debt and general corporate purposes.
CRISIL has assigned IPO Grade 3/5 to the IPO of Vascon Engineers. This grade indicates that the fundamentals of the issue are average relative to other listed equity securities in India.
The book running lead managers to the issue are Kotak Mahindra Capital Company Limited and Enam Securities Private Limited.
