Knr Construction - Book Building 5t6p3y

KNR CONSTRUCTIONS CLASS PRESENTATION

Amit Chauhan WMP13006 Pankaj Bhandari WMP13037 Rahul Chauhan WMP13042 26 March 2019

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Back Ground KNR Construction Limited (KNRCL)  Incorporated in 1995, KNR Constructions Limited is an infrastructure project

development company  Provide EPC (Engineering, Procurement and Construction) services across sectors namely roads & highways, irrigation and urban water infrastructure management.  KNR's project execution strength primarily is in road transportation engineering projects ( construction and maintenance of roads, highways, flyovers and bridges ).

Current Project Executions: (2007)  24 contracts spread across various states in the country.

 Key Clients : Governmental agencies like the NHAI, and public works department under the State Governments of Andhra Pradesh, Madhya Pradesh, Karnataka, Tamil Nadu and Uttar Pradesh 26 March 2019

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IPO SNAPSHOT The objects of the Issues are to achieve the benefits of listing on the Stock Exchanges & to raise capital for : a. Further Equity investment in BOT projects, b. Contribution towards the unsecured loan portion in the BOT Project (namely AP-07), c. Purchase of capital equipment, and d. For meeting working capital requirement.

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QUESTIONS Grade the IPO of KNR Constructions  CRISIL’s IPO Grading Parameters

CRISIL IPO GRADING SCALE

 Business Prospects (Industry and Company)

GRADE 5 : Strong Fundamentals

 Project Related Risk

GRADE 4 : Above Average Fundamentals

 Financial Performance

GRADE 3 : Average Fundamentals

 Management Quality

GRADE 2 : Below Average Fundamentals

 Corporate Governance

GRADE 1 : Poor Fundamentals

 What Industry Said: (Recommendations vs. IPO Grading)

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Business Prospects – Industry / Company  Infrastructure project development company providing engineering, procurement and construction services across various fast growing sectors namely roads & highways, irrigation and urban water infrastructure management.  Execution strength primarily is in road transportation engineering projects construction and maintenance of roads, highways, flyovers and bridges

 Strong project management skills help us in timely and successful completion of projects  Gained expertise in construction of roads on EPC basis and further  Diversified into other infrastructure segments like irrigation, water supply and urban water infrastructure management  As on November 30, 2007, we have 25 projects on hand across various states in India covering Uttar Pradesh, Madhya Pradesh, Assam, Andhra Pradesh, Karnataka, and Tamil Nadu 26 March 2019

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Business Prospects – Industry / Company  Estimated unexecuted order book position as at November 30, 2007 was Rs. 17,338.25 million, which is approximately 5.4 times the operational income of FY 2006-07 on a consolidated basis  Qualified and experienced employees led by a proven management team  Good clientele base, comprising of governmental agencies like the NHAI, and public works department under the State Governments of Andhra Pradesh, Madhya Pradesh, Karnataka, Tamil Nadu and Uttar Pradesh.

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Financial Performance 2008

Comments

PAT

271.1

Given in Statement - Page 91)

Retention Ratio (2007)

88.47%

Calculated based on DPS Actual

Book Value of 2007

573.96

Given in Statement - Page 91)

Retained Value to Carry Over

239.83243

PAT * BV2007

Expected Book Value 2008

813.79243

BV2007+Retained Value

ROE%

33.31%

ROE% = Net Profit / Net Worth

Growth Rate (g)

29.47%

g = ROE * Retention Ratio

Comparison With Peers

Company J Kumar Infra Project Pvt Ltd

EPS

PE

RONW%

NAV(Rs)

6.41

11

37.47

17.1

Kaushlya Infrastructure Development

3.44

8

17.65

21.43

Supreme Infrastructure Ltd

12.27

5

32.21

38.07

MS Project India Ltd

6

12

8.1

19.7

9

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Financial Performance 2009 PAT Retention Ratio New Capital Allottment Price Return from New Capital Total Pat of 2009

350.9957686 0.15 7.87457 TBC 1.18*TBC 350.99M+1.1812X

Total Equity Shares EPS for 2009 Industry Average PE Price = PE * EPS

28.12 (350.99M+1.1812X)/28.12 9 180.58

 Price is close to 180 which is upper band and hence the Investor can subscribe to the same

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Management Quality Mr. K. Narasimha Reddy Promoter and Managing Director having over 38 years of experience in the roads and infrastructure sector . Driving force behind Company’s establishment and growth, and grown to current size and scale under his able leadership Execution of project closely monitored by the promoters is high in execution Directors are from diverse background Succession plan of the firm is not clear

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Our Rating We believe that Organization are in a reasonable position and price band is inline with our valuation method. Given the focus is only on the IPO Grading parameter, our ranking is 3/5 for the same : GRADE 3 : Average Fundamentals

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Subscription Status / Listing Day

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