Agra-based infrastructure firm PNC Infratech Ltd (PNC), which specialises in construction of highways, bridges, flyovers and airport runways, has filed for its initial public offer (IPO) to raise as much as Rs 530 crore, part of which would go to private equity investor Jacob Ballas.
Mid-market PE investor Jacob Ballas had invested in the firm three years ago and is selling a little over a fifth of its holding and may clock 1.5x in returns on its investment, as per VCCircle estimates.
PNC Infratech comes as yet another PE-backed firm filing for a public float. It follows Ortel, Monte Carlo, Adlabs Entertainment and CL Educate. Some like Snowman Logistics and Sharda CropChem have already completed their public issues.
Here's a snapshot on the IPO
- Issue size of 12,921,708 shares including fresh issue of up to 11,500,000 share and offer for sale of 1,421,708 shares by Jacob Ballas.
- Net offer to comprise at least 25 per cent of the post offer capital.
- Company plans to raise Rs 353.2-471 crore through fresh issue, Jacob Ballas can pocket up to Rs 58.2 crore
- ICICI Securities and IDFC Securities are the book running lead managers to the proposed issue.
- The firm has executed projects, including highways, bridges, flyovers, power transmission lines,airport runways, development of industrial areas etc. It provides EPC services on a fixed-sum turnkey basis as well as on an item rate basis for various infrastructure projects. It also executes projects on a BOT (including on a DBFOT basis), operate them during the concession period on toll or annuity basis and subsequently transfer the projects.
- PNC Infratech has executed or is executing projects across various states in India covering Rajasthan, Punjab, Haryana, Uttarakhand, Uttar Pradesh, Delhi, Bihar, West Bengal, Assam, Madhya Pradesh, Maharashtra, Karnataka and Tamil Nadu. It has executed 42 major infrastructure projects on an EPC basis.
- It has also completed re-development of an industrial area at Narela, New Delhi and currently undertaking construction work for a double track electrified railway line as a part of the Dedicated Eastern Freight Corridor.
- Out of the 42 major infrastructure projects on an EPC basis it has executed since incorporation, 38 projects have been executed on an EPC basis independently.
- Currently, it is executing 21 infrastructure projects on an EPC basis of which one project is being executed with a joint venture partner.
- The firm has an order book in terms of value of contract including escalation Rs 6,072.3 crore as on June 30, 2014.
- Majority of projects relate to road construction followed by power transmission and distribution, airport runways and water supply infrastructure.
- Its major clients include the NHAI, Airports Authority of India, Delhi State Industrial Development Corporation, Uttar Pradesh Power Corporation Limited, RITES Limited, Military Engineering Services, Uttar Pradesh State Highway Authority, Haryana State Road Development Corporation, Dedicated Freight Corridor Corporation of India, Madhya Pradesh Road Development Corporation and Public Works Department of UP.
The firm closed FY14 with consolidated revenues of Rs 1,364.2 crore as against Rs 1,309.7 crore in FY13. In the same period its PAT declined to Rs 51.97 crore from Rs 74.63 crore.
Its total revenue has grown at CAGR of 15.98 per cent between FY10-FY14 while PAT rose at CAGR of 4.04 per cent over the same period.
Use of proceeds
The firm has said it would use Rs 150 crore to fund working capital requirements besides putting in Rs 35.2 crore to repay certain debt. In addition, it plans to use Rs 65 crore to invest in a subsidiary, PNCRHPL for part-financing the Raebareli-Jaunpur project in addition to Rs 103 crore planned investment in capital equipment.
These total to Rs 353.2 crore and given that general corporate purposes cannot exceed 25 per cent of the net proceeds (of the fresh issue size), the firm is looking to mop up anywhere between Rs 353.2-471 crore through the fresh issue.
Jacob Ballas holds 14.29 per cent stake and is selling a small part of its holding in the IPO. It had picked the stake in January 2011 for Rs 150 crore at Rs 263.77 a share.
Based on information supplied by the firm it may price the issue anywhere between Rs 307-410 a share.
This would allow Jacob Ballas to encash somewhere between Rs 43-58.2 crore, translating into a modest return on its close to four year old investment, as per VCCircle estimates.