IDFC Private Equity-backed infrastructure developer Ashoka Buildcon opened with a modest 5.5% premium to its issue price of Rs 324 and is trading at a level which is 7% premium to the issue price. This gives IDFC Private Equity unrealised gains of around 2.5x on its four-year-old investment of Rs 100 crore in the construction firm.
Ashoka Buildcon raised Rs 225 crore ($49 million) through an IPO and IDFC PE’s holding has come down from 15.62% to 13.5%, post issue.
Even after the equity dilution, IDFC PE would continue to remain the single largest (entity) equity holder of the company. The promoter group, through various individuals and investment entities, would hold around 73% in the company after the IPO.
At the market price, the company is valued at Rs 1,843 crore ($414 million).
IDFC-SSKI and Enam Securities were the book running lead managers (BRLM) and Motilal Oswal Investment Advisors was the co-BRLM to the issue.
The issue is one of the few mid-sized IPOs in the construction space after the market crashed and then bounced back over the last two years. Many issues have done well in line with positive vibes in the secondary market where the benchmark indices are closing on their all time highs recorded in January’08.
Ashoka Buildcon, which is primarily into construction of roads and bridges, had reported steady income generation in the year ended March 2009. With total revenues increasing over 50% to Rs 518 crore, it sailed through the downturn quite comfortably. Although it did not face serious erosion of profits like the other more volatile real estate developers, its net profit growth slipped 5% to Rs 34.8 crore for 2008-09 against a 36% jump the previous year.