Kaushalya Infrastructure IPO oversubscribed

November 23, 2007

The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares

IPO The Public Issue of Kaushalya Infrastructure Development Corporation Limited (KIDCO) has been oversubscribed as per the information available on the websites of the stock exchanges. The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares. KIDCO is a diversified infrastructure development company from eastern India, and is offering the shares at a price band of Rs. 50 to Rs 60 per share. The net issue to the public would constitute 40.93 per cent of the fully diluted post issue paid-up capital of the Company. The issue closes on 23rd November.

As a part of its expansion plans, KIDCO will mainly utilize funds for acquisition of land, land development rights & real estate development, investment in BOT/BOOT projects and joint ventures and for the purchase of capital equipments comprising construction & infrastructure equipments for execution of projects .

The infrastructure development operations of the Company are organized in three major business divisions viz. Kaushalya Nirmàn (Specializes in construction of roads, highways, bridges and industrial infrastructure), Kaushalya Gràm (Specializes in Electrification and Irrigation projects focused on development of rural India) and Kaushalya Parivàr (Specializes in Construction of Commercial & Residential Complexes). The key clients of the Company include various Government Undertakings, State Public Works Departments, as well as State and Central Public Sector Undertakings.

Says Prashant Mehra, managing director of KIDCO, “We are on the expansion mode and would be focusing more upon diversified sectors so as to leverage and expand the operations. After our successful journey in the Eastern part of the country, we are spreading our operations to other parts like the Central India.”

KIDCO aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, irrigation, dams and agriculture systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future.

The proposed issue will be lead managed by SREI Capital Markets Limited and the Registrar to the issue will be Intime Spectrum Registry Limited.

Source: indiainfoline.com

Written by ITW Editor · Filed Under Investment and Finance

Western, northern region cos dominate infrastructure space

November 23, 2007

NTPC, Larsen & Toubro and Bharti Airtel top the list (in terms of income) of Dun & Bradstreet India’s list of India’s Leading Infrastructure Companies 2007. This listing, part of D&B’s study on infrastructure in India, profiles 187 companies – 121 from the construction sector, 52 from power and 14 from telecom services. The study provides an industry overview of infrastructure in India and key characteristics of the sampled companies .

D&B’s analysis reveals that companies based in the western (37 per cent) and northern regions (30 per cent) dominate the infrastructure industry. While the initial public offer route is a key means of financing for the construction companies, the infrastructure industry as a whole is funded largely through term loans and self-financing.

Construction goes public The study has disclosed that the construction sector is dominated by public companies (listed and unlisted); these accounted for 92 per cent of the 121 construction companies that qualified under D&B’s selection criteria. Thirty per cent of listed construction companies had absorbed close to Rs 20,000 crore through IPOs in 2006-07. The sample companies plan to raise Rs 2,000 crore more in the near future. Most of the companies that raised money through the IPO were focussed on roads, power, irrigation and residential township projects.

The report also brings out the increasing synergy between private players and the Government. Around 50 per cent of the sample companies have collaborations such as public private partnership, special purpose vehicles, other domestic partnership and BOT and BOOT contracts.

Power’s conventional The study found that India continues to rely on conventional sources such as coal, gas and lignite for power generation. Of the 178 power plants operated by the sample companies, 45 per cent were thermal power plants, 38 per cent hydro based and about 10 per cent be run by Nuclear Power Corporation. Only the rest accounted for unconventional energy sources such as wind farms and combined cycle power plants.

The report stated that Central government owned companies have taken the lead in terms of planned capacity additions, accounting for 52 per cent of the total plan. Private sector, including the two ultra mega power projects accounted for 32 per cent of the addition plans, while state-owned companies trailed behind with plans to add only 16 per cent to their capacity.

Source: thehindubusinessline.com

Written by ITW Editor · Filed Under Uncategorized

Maytas-NCC consortium wins airport projects from Karnataka

November 22, 2007

Two separate SPVs are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively

Maytas Infra Ltd. announced on Tuesday that a consortium involving itself, NCC Infrastructure Holding Ltd. and VIE India Project Development and Holding LLC has bagged an order to develop and operate proposed airports at Gulbarga and Shimoga on BOT (build-operate-transfer) basis.

The contract has been awarded by the Infrastructure Development Department of the Karnataka Government.

Two separate Special Purpose Companies (SPVs) are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively.

The construction period is 24 months from the date of signing the agreements. The concession period is 30 years and the agreement can be extended for a further period of 30 years.

Source: indiainfoline.com

Written by ITW Editor · Filed Under Investment and Finance

Avoid Kaushalya Infrastructure IPO: SPA Sec

November 21, 2007

SPA Securities has come out with report on Kaushalya Infrastructure Development Corporation IPO. It has recommended ignoring the issue.

Kaushalya Infrastructure Development Corporation has opened for subscription with an IPO of 85 lakh equity shares of Rs 10 each at a price band between Rs 50 and Rs 60. The issue will close on November 23.

SPA Securities report on Kaushalya Infrastructure IPO

Investment Highlights

KIDCO has shown a CAGR of 45% in the topline; 67% in OPM & 62% in the bottomline in the last three years.
Investment Rationale: KIDCO is engaged in well-diversified construction activities including civil and commercial projects and infrastructure development and Real-Estate Projects. It has executed various infrastructure development projects and commercial and residential complexes. Registered as a class IA contractor. Order book at Rs 76.01 crore of the total contracts under-execution value of Rs 144.84 crore executable in next 18-24 months. Focus on under developed areas of Eastern India, viz., West Bengal, Chattisgarh, Jharkhand & Sikkim, which provides immense potential for growth. Company for its construction and development of quality housing in West Bengal has entered into a Joint Venture with West Bengal Housing Board (WBHB) and formed Bengal KDC Housing Development Ltd.
Concerns are: Low margin road business comprises almost 75% of the order book. Low networth therefore cannot bid for big contracts. Sales/Networth ratio of less than 4x against the industry average of 10x. Low debtors turnover ratio of 2. Allocation of issue proceeds to too many heads. Small allocation of Rs 12 crore for BOT/BOOT projects.
For the quarter June 2007, the company recorded a topline of Rs 16.20 crore, operating profit of Rs 2.13 crore and posted a PAT of Rs 1.09 crore translating to EPS of Rs 4.32 (annualized) & RoNW of 19.20%
Order book as on 30 June’07 is of Rs 76 crore. The order book break is: Road Projects 75%, Infrastructure projects 21% & Other Projects 4%.

Valuation: The stock is currently available at a P/E of 25x to 30x on the lower & upper price bands respectively of its post issue FY07 EPS of Rs 1.98. The stock is expensive among its peer group which is trading at much lower P/E multiple range of 8x to 16x. On EV/EBIDTA, the company is valued at 20-23x which too is very expensive vis-à-vis its peers which is trading in range of 11-21x EV/EBIDTA. Company posted OPM of 11.27% & NPM of 7.14% in FY07, which is mediocre performance in the industry. On the basis of its high exposure to low margin business of Road Projects (75% of the order book) we are of the view that margins will not increase much going forward. Real Estate projects will start contributing only after 18-24 months from here, as construction on its acquired land has not started till the filing of the public issue. Hence, we recommend ignore the issue.

Source: moneycontrol.com

Written by ITW Editor · Filed Under Investment and Finance

Cial has non-metro, foreign airports on radar

November 21, 2007

It plans to participate in the modernization of the 35 airports in the country, apart from the overseas projects

New Delhi: Cochin International Airport Ltd (Cial), the company that built the new international airport at Kochi, India’s first to be built by a private sector firm, is looking to build airports in India and in other countries in an effort to tap growing demand for airline infrastructure in many parts of the world.

Cial plans to participate in the modernization programme of 35 non-metro airports in the country and also wants to build airports in Sri Lanka, Ghana, Angola and Papua New Guinea, according to S. Bharat, managing director, Cial.

Cial was promoted by the Kerala government, financial institutions, airport service providers, non-resident Keralites and a group of entrepreneurs.

The single largest shareholder in the company is the state government with 35% of the paid-up capital.

Bharat added that Cial is in talks with an international finance company and a technical partner to promote a new company that will handle these projects.

Cial’s overseas plans come at a time when international airport operators such as Singapore’s Changi Airport International (CAI), Airport Company South Africa Ltd, Fraport AG and other leading players from Mexico, Turkey, Paris and Germany are looking to partner with Indian companies to bid for airport projects in the country. Singapore’s CAI had floated a joint venture company with Tata Realty & Infrastructure Ltd, a subsidiary of the Tata group for the airport modernization projects in India.

If it wins any of the projects to build airports outside the country, Cial will be following in the footsteps of Bangalore-based GMR Infrastructure Ltd, the lead partner in the consortium that runs Delhi International Airport, which will be developing Sabiha Gokeen International Airport (SGIA) at Istanbul, Turkey. GMR’S partners in this project are Malaysia Airports Holdings Berhard and Limak Insaat Sanavi San Ve Tic A S Turkey.

Bharat confirmed Cial’s overseas aspirations.

“The government of Sri Lanka has invited us to study the possibilities of building an airport there. We have got offers from Ghana, Angola and Papua New Guinea. Cial’s team will shortly visit those countries,” he said.

Cial plans to take up overseas airport projects on a build-operate-transfer (BOT) or build-own-operate (BOO) basis. Under the BOT model, the developer constructs and manages a project for a specified time before handing it over to the government; in the BOO model, the developer continues to operate the project with a local partner.

“The funding of these airport projects would be done by a special purpose company formed under Cial,” Bharat said.

He declined to name the international partners citing confidentiality agreements.

“We are also looking at bidding for the ongoing airport projects within India as we can make airports at lower cost,” Bharat added. The Cochin airport was built at a cost of Rs315 crore including the cost of land.

A government committee on infrastructure, headed by Prime Minister Manmohan Singh, has estimated that India will need to spend more than Rs40,000 crore in developing airports between 2006-07 and 2013-14. Of this, an estimated Rs31,100 crore is expected to come from public-private partnerships.

The ministry of civil aviation has decided to modernize and upgrade 35 non-metro airports across India.

Besides, the government is also planning to build greenfield airports at Navi Mumbai (Maharashtra), Kannur (Kerala), Hassan and Gulbarga (Karnataka), Ludhiana (Punjab), Greater Noida (NCR), Paykong (Sikkim), Cheithu (Nagaland) and Chakan (near Pune, Maharashtra).

“At a time when current airport modernization programmes envisage spending at least Rs5,000 crore for a single project, Cial had built a world class product on a very modest budget. Cial can cash in on its expertise in the upcoming non-metro airport projects,” said a Mumbai-based aviation analyst, who does not want to be identified because he is not authorized to speak to the media.

Written by ITW Editor · Filed Under Investment and Finance, Media

Market stays in red

November 21, 2007

At 13:07pm (IST),the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

Markets continue to stay in negative territory in the afternoon trades as selling pressure prolongs. The IT stocks are witnessing fresh buying momentum as the IT bellwether; Infosys, TCS and Satyam Computer are trading in green. IT index is the only gainer up (0.3%).

All the other key sectoral indices continue to be in red, the BSE Bankex index (down 3.5%), BSE Power index (down 3.3%) and BSE Capital Good index (down 3%).

At 1:07 pm (IST), the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

GSPL has gained 1% to Rs77 after reports stated that the company would invest Rs2500cr on new pipeline it also would add 850km of gas Pipeline in next year. The scrip has touched an intra-day high of Rs79 and a low of Rs73 and has recorded volumes of over 10,00,000 shares on NSE.

Fortis Financial has surged by over 5.5% to Rs105 after the company announced that it purchased 76% stake of UK’s Capital Market Solution. The scrip has touched an intra-day high of Rs109 and a low of Rs102 and has recorded volumes of over 14,000 shares on NSE.

Tata Steel is down 3% to Rs832. Reports stated that the company is launching a mega rights issue of Rs100bn to repay the bridge loans raised for funding the acquisition of Corus for US$12.9bn. The scrip has touched an intra-day high of Rs878 and a low of Rs831 and has recorded volumes of over 7,00,000 shares on NSE.

L&T has slipped 3% to Rs4205. The company yesterday signed a MoU with Raytheon Company, US, to develop defence technology for the Indian military forces. The scrip has touched an intra-day high of Rs4335 and a low of Rs4145 and has recorded volumes of over 3,00,000 shares on NSE.

Mytas Infrastructure has dropped by over 5% to Rs920. The company yesterday said a consortium the company, NCC Infrastructure Holdings and VIE India Project development and Holdings bagged the BOT contract to develop and operate airports at Gulbarga and Shimgo in Karnataka The scrip has touched an intra-day high of Rs1010 and a low of Rs905 and has recorded volumes of over 1,00,000 shares on NSE.

Strides Arcolab is trading flat at Rs291 the company yesterday announced that it would be selling 50% stake in Strides Latina to Aspen, South Africa, for US$152mn. The scrip has touched an intra-day high of Rs324 and a low of Rs290 and has recorded volumes of over 35,000 shares on NSE.

Ansal Housing is down over 3.8% to Rs179. The company declared that they have planned to raise Rs353.6mn in warrants sale. The scrip has touched an intra-day high of Rs188 and a low of Rs175 and has recorded volumes of over 19,000 shares on NSE.

HPCL has lost over 5% to Rs285. Reports stated that the company planned to spend US$4.5bn on exploration, gas marketing and petrochemicals by 2012. The scrip has touched an intra-day high of Rs304 and a low of Rs284 and has recorded volumes of over 8,00,000 shares on NSE.

Source: indiainfoline.com

Written by ITW Editor · Filed Under Investment and Finance

Marginal player

November 19, 2007

Kaushalya Infrastructure has plenty to prove since it is yet to gain a critical mass.

Kaushalya Infrastructure Development (Kidco), a construction and engineering company focussed on eastern India plans to raise Rs 42-51 crore from the public by offering 85 million shares, a 43.4 per cent share of its fully-diluted equity capital.

The price band for the issue is fixed between Rs 50-60 a share. The company aims to garner a market capitalisation of about Rs 98-118 crore upon listing.

From the issue proceeds, Kidco will acquire construction and infrastructure equipment and make investments in its build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) projects. It also plans to acquire land for real estate development.

Kidco operates in three verticals, which include construction and engineering, rural electrification and irrigation infrastructure, and residential and commercial real estate.

The company has carried out projects in West Bengal, Jharkhand, Chhattisgarh and Sikkim. Central and state governments, state public works departments and a few private entities have been its main clients.

At present, the company has 16 ongoing projects aggregating to an order book of Rs 144.8 crore, of which work worth Rs 76 crore is yet to be completed. These projects will be executed over a time-frame of 12-18 months.

The top three projects are of the size of Rs 25-30 crore, which appears small. Kidco owns 28.4 acres of land at Zaheerabad, Andhra Pradesh, and 4 acres in Rajarhat, a Kolkata suburb. It is in the process of acquiring another 8 acres in Rajarhat, which will be concluded with a part of the issue proceeds.

The company registered a top line of Rs 54 crore in FY07, with operating margins of about 8 per cent.

Going forward, the poor margins are unlikely to improve significantly, unless the ticket size and the nature of projects changes drastically, along with the company’s clientele. Investors may want to wait for the company to gain some more ground, before betting on it.

Source: business-standard.com

Written by ITW Editor · Filed Under Investment and Finance

Noida – a Paradise for Abode & Personnel

November 12, 2007

New Okhla Industrial Development Authority (Noida) is known to be the largest industrial town of Asia, but now it has undergone a paradigm shift in the last few years. The real estate in Noida is hitting the sky, which is due to a large migration of people from Delhi who are being bullish to make it their home. As a part of Uttar Pradesh, Noida cannot remain untouched by the problems prevailing in the state. Despite all, the individuals who have shifted their base to Noida witness to live a splendid life. And today with one more reason for all the real estate players in Noida is none other than the proposed second international airport at Greater Noida. The development is likely to give a push to prices of residential and commercial property projects in twin cities of Noida and Greater Noida.

Noida certainly benefits from the relative proximity to Delhi. Excellent network of roads, 100 per cent power back up make up for a good idea to stay here. Also, Noida is attracting large interests from young well to do professionals who are making the highest income tax paying district in UP. Even many prominent names in both domestic and international hospitality sector are to initiate exclusive five-star hotel projects in Greater Noida. The list includes Unitech, Carlson, ITC, Bharat Hotels, and NRI hotelier Sant Chatwal. To be located in the close proximity to the proposed international airport, these commercial establishments will enjoy an added advantage.

According to Mr. M L Sehjpal, Director of Pearls Infrastructure Projects Limited, “Noida has developed into the land of opportunities. Property demand has sky rocketed here. Housing opportunities are in great demand as are commercial spaces. Moreover, the demand for residential property in Noida and Greater Noida is likely to shoot up in very near future, feels industry watchers. In the wake of better infrastructure facilities, Greater Noida already gains preference over Gurgaon. A direct metro link with Delhi and the Expressway will further improve accessibility of Noida.”

As conglomerates, Indian corporate is scouting for commercial spaces; NOIDA is emerging as a preferred IT & ITES destination of India. Real estate developers in Noida in their bid to lure investors are coming up with state-of-the-art office spaces as per international standards. Mr. Harjeet singh Arora, MD, Best Groups, “There is an excellent potential in India and abroad as there is a lot of movement in corporate circles as India’s large, educated middle class has made its name in the field of software and IT-enabled services, thereby fuelling demand for about 40 million square feet annually in IT and ITES office space. With the sudden jump in demand for space, the real sector is witnessing a huge charn.” Best is also coming up with an IT Park in Greater Noida.

Futuristic Plan of Noida

Plans are to set up a multipurpose SEZ (Special Economic Zone) spread on 2,500 acres of land along the Expressway envisioned to be categorically divided into industrial, residential, recreation, commercial and facilities. Within this plan, 600-1000 acres of land has been earmarked for handicrafts related SEZ. The much-awaited Noida City Center between sectors 25A and 32 is also a futuristic offspring of this plan.

Noida authority is looking forward to set up a medical city on a spread of 50+ acre of land along the expressway to be named Arogya Dham. This medical city shall be a congregation of super-specialty hospitals with world – class facilities and matching commercial complex, attendant’s homes and plenty of open space thanks to wide roads, parks and green cover.

The Botanic Garden of Indian Republic (BGIR) is being set up on a spread of 200 acres in sector 38A to conserve the endangered plants of the country and showcase its near extinction plan diversity.

It is also planned to connect Delhi and NOIDA through Delhi Metro Rail Corporation phase II construction program, latest by 2009.

NOIDA is also setting up CNG-based outlets for vehicles in collaboration with Indraprastha Gas Ltd.

Source: indiaprwire.com

Written by ITW Editor · Filed Under Investment and Finance

Reliance Energy Ltd(REL) to hive off infrastructure projects

November 12, 2007

NEW DELHI: In a bid to separate the power and infrastructure projects, Reliance Energy Ltd. (REL) has now decided to transfer all its infrastructure projects to a separate wholly-owned subsidiary.

The REL board had already given its approval to the proposal.

The move comes hot on the heels of REL deciding to hive off its power generation business as a separate company — Reliance Power Limited (RPL).

RPL has filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an initial public cffering (IPO) of around Rs. 12,000 crore.

The decision to hive off infrastructure portfolio to a new subsidiary comes in view of the increasing portfolio of the company on this account in recent months.

REL is developing highways for the National Highways Authority of India (NHAI) under the build-own-transfer (BOT) scheme.

It is involved in five National Highway projects in Tamil Nadu, covering a length of 400 km at a cost of Rs. 3,100 crore. In addition, it is pursuing road projects, including the proposed Rs. 5,000 crore Western Freeway sea-link project connecting Worli and Nariman Point in Mumbai and the Rs. 6,000-crore Jaipur Ring Road project.

On the real estate side, the REL-led consortium had emerged as a winner for developing a business city in Hyderabad with an estimated investment of Rs. 6,500 crore. The city will be built in 77 acres, which will include a 100-storey trade tower. It has also bagged the metro rail project in Mumbai that involved the development and operation of a fully-elevated metro rail.

The total cost of the project is around Rs. 2,500 crore. It has also bid for line 2 of the Mumbai metro elevated track between Mankhurd and Charkop with an estimated investment of Rs. 6,500 crore. The company is also bidding for the Rs. 6,000 crore Mumbai trans-harbour link.

Source : The Hindu

Written by ITW Editor · Filed Under Investment and Finance

India approves offshore container terminal

November 11, 2007

New Delhi: India’s Cabinet approved the development of an offshore container terminal at Mumbai Port as trade expands in line with growth in Asia’s third-biggest economy after Japan and China.

The terminal will be built by a group of companies consisting of Gammon India, Gammon Infrastructure and Dragados of Spain, the government said in a release in New Delhi.

India is bolstering port capacity as economic growth boosts the import of oil and the export of textiles.

The shipping ministry said in December 2005 it expects to spend Rs1 trillion ($25 billion) in six years to improve maritime facilities.

Expansion

The South Asian nation’s economy has expanded at an average 8.6 per cent since 2003, the second-fastest pace among major economies after China.

India’s exports of gems, textiles and other manufactured products rose at the fastest pace in five months in September, the government said November 1.

Mumbai Port Trust, which will provide the supporting infrastructure for the project, will spend Rs3.66 billion ($93 million) on the project, which will cost a total of Rs12.28 billion, the government said.

Funding

The remaining Rs8.62 billion will be invested by the non-state partners.

The project will add capacity of 9.6 million tonnes per annum and will be constructed in three years, Finance Minister Palaniappan Chidambaram told reporters after the Cabinet meeting that approved the plan.

Source: gufnews

Written by ITW Editor · Filed Under Investment and Finance