Man Infra gets IPO grade of 3/5 from CRISIL

Amandeep Singh — Wed, 06 Jan 2010 10:50:10 +0000

The proposed IPO of the Man Infraconstruction(Man Infra) has been assigned a CRISIL IPO Grade “3/5″ by CRISIL, according to its report dated January 5, 2010.

According to the report, “This grade indicates that the IPO’s fundamentals are average, relative to the other listed equity securities in India. However, this grade is not an opinion on whether the issue price is appropriate with regard to its fundamentals. The grade is not a recommendation to buy/sell or hold the graded instrument, or a comment on the graded instrument’s future market price or its suitability for a particular investor.”

“The IPO grade assigned to Man Infra reflects that the company is well positioned in contracting services in the ports sector and in the real estate contracting business in Mumbai. The grading takes into account the expected buoyant supply in the Mumbai residential market (driven by pickup in demand) and significant investments likely in the ports sector, given the current high utilisation rates, expected increase in traffic and the need to improve efficiency. The grading also takes into consideration the company’s strong order book position of about Rs 14.2 billion, which provides it with sufficient revenue visibility. The grading also factors in high operating margins, low gearing and the company’s strong balance sheet.”

The report also says, “However, there is a high dependence on the real estate market with more than 80% of its order book coming from the real estate sector. Any slowdown in the real estate market may have an impact on order accretion and may lead to delay or cancellation of projects. Also, over the past few years, the company has been reliant on a few clients for its orders; however it has recently acquired new orders from varied set of clients thereby de-risking itself.”

You may read the entire CRISIL Report Here.

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Man Infra gets IPO grade of 3/5 from CRISIL