Brahamputra Consortium Limited is entering Indian primary market with a Public issue of 4,200,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Company is an infrastructure project development company and provides engineering, procurement and construction services for infrastructure projects in India. It is also executing two real estate development projects. The project expertise is primarily in transportation engineering projects including roads, bridges flyovers, tunnels, land development/ embankment and airport runways, mining and hydroelectric projects.
The company is promoted by the Agarwalla family. Mr. Siw Prasad Agarwalla is the founder of the company. He along with his four sons currently forms the promoter group.
Brahamputra Consortium Limited is a profit making company. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 101 crores. The restated net profit for the same period was about Rs.37 crores. For FY 2007, till Dec’2006, company had clocked a turnover of Rs.102 crores and a net profit of Rs.40 crores. For FY 2005 and FY 2004, the top line was Rs. 60 and Rs. 40 crores approximately. The net profit for FY 2005 was Rs. 18 crores and for FY 2004 net loss was Rs. 14 crores.
Particulars of the Issue
Brahamputra Consortium Limited IPO is a fresh 100% Book Building issue of 4,200,000 Equity Shares of Rs. 10 each. At least 1,400,000 Equity Shares of Rs. 10 each is reserved for the retail investors.
Basis for Issue price
Brahamputra Consortium Limited claims that government is focused on building infrastructure such as roads, highways, bridges, airports, waterways which provides them good business opportunities. It claims it has Strong Order book amounting to Rs. 73093.79 Lacs as on January 1, 2007. It claims it has ability to execute complex large projects under various operating conditions. Its clients comprise of NHAI, Public Works Departments, Airport Authority of India, Northeast Frontier Railways, Coal India Limited, Mumbai Metropolitan Region Development Authority, L & T etc.
Objects of the Issue
The objects of the Issue are to achieve the benefits of listing on the Stock Exchanges and the raising of funds for capital expansion plans. Company believes that listing will enhance the Company’s visibility and brand name among existing and potential customers and investors. Purchase of capital equipments and investment in BOT projects are other main objects of the issue.
Following are the key risks which can impact company’s performance:
a. Criminal proceedings are pending against the promoters.
b. Company is involved in legal proceedings.
c. Confirmation from the GoI that the company can offer the
Equity Shares to registered FIIs investing under the portfolio investment scheme notified under the FEMA Regulations is yet to be received.
d. Company has not executed BOT project in the past.
e. Company has negative cash flow for the fiscal year 2005, 2006 and for the nine months period ended December 31, 2006. Any negative cash flow in the future may affect liquidity and financial condition.