Wednesday, March 5, 2008

Gammon Infra IPO - Analysis, Review and Recommendation

Gammon Infrastructure Projects (GIPL), an infrastructure project development company undertakes projects on a public-private partnership basis (PPP). Presently, GIPL undertakes and develops projects such as roads, bridges, ports, hydroelectric power and biomass power projects on a PPP basis. The company is entering the capital market with its initial public offering (IPO) of 1,65,50,000 equity shares of face value Rs 10 each for a cash price to be determined through a 100% book building process.

The issue will open on March 10, 2008, and will close on March 13, 2008. The price band has been fixed between Rs 167 and Rs 200 per equity share. Investors can avail of two modes of payment. Under Payment Method-1, the amount payable on submission of the bid-cum-application form (in case of retail individual bidders and non-institutional bidders) is Rs 50 per equity share (such that it shall not be less than 25% of the issue price). And the balance payable shall be paid by the due date. Non-resident bidders cannot make use of Payment Method-1. Under Payment Method-II, the amount payable on submission of the bid-cum-application form in the case of retail individual bidders and non-institutional bidders shall be 100% of the bid amount, and, in the case QIBs, will be 10% of the bid amount with the balance being payable on allocation.

We would recommend investors to invest in this IPO. The issue has been given above average rating by CARE.

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