Monday, November 15, 2010

RPP Infra IPO - Analysis, Recommendation, Review

Analysis:
RPP Infra, a south India based construction company primarily engaged in the business of infrastructure development, is coming out with an IPO of 65 lakh shares. The offer comprises a fresh issue of 61 lakh equity shares by RPP Infra Projects Limited and an offer for sale of 4 lakh equity shares by the promoters. The issue comprises of a reservation of 4 lakh equity shares for eligible employees and a net issue to the public of 61 lakh equity shares. The issue will constitute 28.76% of the post issue paid-up equity capital of company.

The company has diversified civil works expertise into SEZ development, water management projects, irrigation and power projects. The offer will open on November 18 and close on November 22. The company has fixed a price band of Rs 68 to 75 per share.

The company intends to deploy the proceeds of net issue for funding margin requirement for working capital, capital expenditure, investment in SPVs for BOT projects and meeting general corporate expenses.

VC Corporate Advisors Pvt Ltd is the book running lead manager to the issue.

Recommendation:
Would recommend investors to stay away from this IPO.

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