Buy IVRCL Infra; target of Rs 382: Motilal Oswal

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Motilal Oswal Financial Services is bullish on IVRCL Infrastructure and has maintained buy rating on the stock with a target of Rs 382, in its November 10, 2009 research report.

"IVRCL Infrastructure has announced restructuring of its BOT assets portfolio wherein it will transfer its holding companies to IVR Prime Urban (62.4% subsidiary). The effective date for the transfer will be April 1, 2009. The merger will be through share issue of 59.5m shares in IVR Prime Urban to IVRCL. Thus the stake of IVRCL in IVR Prime Urban will increase to 80.5% post the restructuring. Further details (e.g. incremental net worth of IVR Prime Urban post acquisition) will be available after Court approval for the transaction (expected by 1QFY11)."

"We currently value the BOT portfolio of IVRCL at 1.5x P/BV, and thus the proposed transaction at 2x P/BV (based on CMP of IVR Prime Urban) will add marginally (~2.6%) to SOTP value of IVRCL. The transaction could lead to increased focus on BOT projects without necessitating further equity dilutions in IVRCL. We maintain Buy with price target of Rs 382 per share for IVRCL,"Motilal Oswal Financial Services research report.

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