MAX. ISSUE SIZE (Rs) : 849 crores
PRICE BAND (Rs) : 510 - 600
ISSUE OPENS/CLOSES : 23rd to 26th July, 2007
LISTING : NSE, BSE.
IVR Prime is a subsidiary of IVRCL Infrastructures, which will still hold around 62 per cent stake in the company post-IPO. At the outset itself, it is worth noting that it is the parent company that benefits in terms of inflows from two of the company’s IPO objectives, namely, repayment of loans and payments for development rights.
In aggregate and percentage terms this works out to around Rs.362 crore and 40 per cent of the IPO proceeds. For the record, the other issue objective revolves around completing projects.
IVR Prime’s land bank comprises 2,478 acres, of which only 14 per cent is owned by the company or its subsidiaries. Notably again, around 70 per cent of the payment on land is still outstanding, primarily on account of pending installments for the Noida parcel.
A review of the RHP indicates that the bulk of the planned development is at a preliminary stage thus suggesting the possibility of execution risks resulting into time and cost overruns. The RHP also clearly indicates that the company expects the projects to be completed only by 2012. The financials are satisfactory with the topline for 2006-07 standing at Rs.148 crore and bottomline at Rs. 21 crore. The OPM of 25 per cent, though satisfactory also suggests limited scope for further improvement.
On a SWOT snapshot scale, the other negatives would include potential conflict of interest, limited geographical coverage area ( primarily Hyderabad and Chennai), and the fact that the lions share of the profits from the Noida project will be pouched by the parent company. Almost ironically, IVR Prime’s only real positive besides being engaged in the booming realty segment is its parentage.
At a historical P/E demand of 150 odd, chances are, investors would rather back the parent company, which clearly is a significant beneficiary of this IPO.
In aggregate and percentage terms this works out to around Rs.362 crore and 40 per cent of the IPO proceeds. For the record, the other issue objective revolves around completing projects.
IVR Prime’s land bank comprises 2,478 acres, of which only 14 per cent is owned by the company or its subsidiaries. Notably again, around 70 per cent of the payment on land is still outstanding, primarily on account of pending installments for the Noida parcel.
A review of the RHP indicates that the bulk of the planned development is at a preliminary stage thus suggesting the possibility of execution risks resulting into time and cost overruns. The RHP also clearly indicates that the company expects the projects to be completed only by 2012. The financials are satisfactory with the topline for 2006-07 standing at Rs.148 crore and bottomline at Rs. 21 crore. The OPM of 25 per cent, though satisfactory also suggests limited scope for further improvement.
On a SWOT snapshot scale, the other negatives would include potential conflict of interest, limited geographical coverage area ( primarily Hyderabad and Chennai), and the fact that the lions share of the profits from the Noida project will be pouched by the parent company. Almost ironically, IVR Prime’s only real positive besides being engaged in the booming realty segment is its parentage.
At a historical P/E demand of 150 odd, chances are, investors would rather back the parent company, which clearly is a significant beneficiary of this IPO.
