KNR CONSTRUCTIONS CLASS PRESENTATION
Amit Chauhan WMP13006 Pankaj Bhandari WMP13037 Rahul Chauhan WMP13042 26 March 2019
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26 March 2019
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
3-5
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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