India - Politics, Industrials, IT and Large Caps, EMAlpha

Pankaj Sharma

India - Politics, Industrials, IT and Large Caps

Thematic (Sector/Industry)

<p>IRCON International Limited (IRCON) is a Government of India company which specializes in the execution of railway projects. IRCON will open its IPO on 17th September with price band of Rs 470-475 per share and plans to raise Rs4.7 bn through this issue. While revenue visibility is good on the back of a huge order book (with 6x revenue coverage approximately) and valuation in the range of 11x FY18 EPS is not really demanding, the risk is excessive dependence on Govt contracts and concerns on project profitability. Because of the nature of business IRCON is in, financials (revenue growth, margins, PAT and RoE) also don't indicate consistency and high level of efficiency in operations. However, investors will take comfort in strong stock price performance from <a href="https://www.smartkarma.com/entities/27173" target="_blank" data-smartkarma-citation="entities:27173:1">RITES Ltd (RITE IN)</a> since its IPO and attractive pricing of IRCON IPO. The issue is likely to do well post listing.</p>

IRCON International Limited (IRCON) is a Government of India company which specializes in the execution of railway projects. IRCON will open its IPO on 17th September with price band of Rs 470-475 per share and plans to raise Rs4.7 bn through this issue. While revenue visibility is good on the back of a huge order book (with 6x revenue coverage approximately) and valuation in the range of 11x FY18 EPS is not really demanding, the risk is excessive dependence on Govt contracts and concerns on project profitability. Because of the nature of business IRCON is in, financials (revenue growth, margins, PAT and RoE) also don't indicate consistency and high level of efficiency in operations. However, investors will take comfort in strong stock price performance from RITES Ltd (RITE IN) since its IPO and attractive pricing of IRCON IPO. The issue is likely to do well post listing.

IRCON: Strong Visibility and Attractive IPO Pricing but the PSU Comes with Concentration Risk

Equity Capital Markets

<h2>Govt to sell 12% stake in <a href="https://www.smartkarma.com/entities/27173" target="_blank" data-smartkarma-citation="entities:27173:1">RITES Ltd (RITE IN)</a> through an IPO</h2><p>In a week, <a href="https://www.smartkarma.com/entities/27173" target="_blank" data-smartkarma-citation="entities:27173:1">RITES Ltd (RITE IN)</a> (previously known as Rail India Technical and Economic Services Limited under the Ministry of Railways) which is an engineering consultancy company will be in the market. RITES is a Govt of India owned enterprise which provides services in the areas of transport infrastructure and related technologies (<a href="https://www.livemint.com/Money/dNqqZHcTMyzlDjSi9WuRlJ/Govt-to-sell-12-stake-in-RITES-through-IPO.html" target="_blank">Source</a>). The company has a long presence in the consultancy projects in these areas.</p><ol><li>The IPO price band…</li></ol>

Govt to sell 12% stake in RITES Ltd (RITE IN) through an IPOIn a week, RITES Ltd (RITE IN) (previously known as Rail India Technical and Economic Services Limited under the Ministry of Railways) which is an engineering consultancy company will be in the market. RITES is a Govt of India owned enterprise which provides services in the areas of transport infrastructure and related technologies (Source). The company has a long presence in the consultancy projects in these areas.The IPO price band…

RITES: Stable Business and Reasonably Valued IPO, but the Five Risks Investors Should Not Ignore

India

RITES Limited provides engineering services. The Company offers transport infrastructure consultancy, railway inspection, rolling stock leasing and maintenance, airport construction management, industrial and electrical engineering, and other related services. RITES serves customers worldwide.

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RITES Ltd (RITE IN)

IRCON: Strong Visibility and Attractive IPO Pricing but the PSU Comes with Concentration Risk

IRCON International Limited (IRCON) is a Government of India company which specializes in the execution of railway projects. IRCON will open its...

Pankaj Sharma

RITES: Stable Business and Reasonably Valued IPO, but the Five Risks Investors Should Not Ignore

Govt to sell 12% stake in RITES Ltd (RITE IN) through an IPOIn a week, RITES Ltd (RITE IN) (previously known as Rail India Technical and Economic...

Pankaj Sharma

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