Dilip Buildcon IPO: complete review


Dilip Buildcon is Bhopal; Madhya Pradesh based Private sector Engineering, Procurement and Construction Company with primary focus on road projects in India.

Core business of Dilip Buildcon is construction projects across India in road and irrigation sectors with primary focus on Highways, city roads and bridges. Company also owns largest fleet of construction equipments in India and one of the biggest employers in Construction sector with more than 17500 employees.  In last 5 years company has completed construction of 51 road projects in Madhya Pradesh, Gujarat, Himachal Pradesh, Rajasthan and Maharashtra. Now they have presence in 14 states of India.

Company Promoters

Dilip Suryavanshi, Seema Suryavanshi, Devendra Jain and Suryavanshi Family trust.

Issue details

·         Issue date:  August 1, 2016 to August 3,2016
·         Issue Type: Book built issue IPO
·         Issue price: Rs 214 -  Rs 219 per Equity share
·         Market lot: 65 shares

Objective of Issue

The public issue comprises of a fresh issue and an Offer for sale by shareholders.
1.    Fresh Issue
The proceeds from the fresh issue will be utilized towards:
a.    Prepayment of portion of term loans availed by company.
b.    To meet working capital requirement
c.    General corporate purpose.
2.    Offer for Sale
Dilip Buildcon will not receive any proceeds from Offer for Sale.

Financial details of company

FINANCIAL REPORT (in Millions)







2011
2012
2013
2014
2015
Total Revenue
4364.45
11898.22
19131.42
23223.78
26301.44
Total Expenses
3779.06
10258.62
16144.09
20797.15
24352.28
Profit after Tax
390.3
1079.63
2508.91
1942.81
1457.79


Company revenues grew at 58% CAGR in last 5 years. AT the price band of Rs 214-219, stock is valued at 11.7 – 11.4 times its trailing FY16 EPS which is well below in comparison to some of its peers like KNR Constructions and PNC Infratech.

Pros of Company

1.    Leading road focused EPC contractor
2.    Excellent track record
3.    Efficient business model
4.    Strong financial performance
5.    Robust order book and excellent credentials
6.    Experienced management and promoters.

Cons of Company

Nothing except some issues in the past. But, Infrastructure sector is always a risky sector.

Final Verdict

My personal opinion is, Dilip Buildcon IPO looks like a good bet for handsome returns. But I would strongly suggest checking with your financial advisor before making any investment. Proper investigation and analysis before investment should be done personally.

DISCLAIMER:


I have neither any personal investment in Dilip Buildcon Company nor any relation with them. My views and suggestions are based only the analysis done from my end.

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