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Angel Broking: “Though BRNL’s projects are spread across India, the past track record of the numbers doesn’t give enough confidence about sharp improvement in the near term. At the issue price band of `195-205, the stock is offered at 2.6x its Pre Issue BV and 1.5x-1.6x its Diluted BV. Even established players like IRB, with strong portfolios are trading at similar valuations and hence, we believe the issue price leaves limited scope for further appreciation. Hence, we have a NEUTRAL rating on the issue.”

Centrum ” The company has been reporting losses and hence valuations are not comparable to peers like IRB Infrastructure Developers, Sadbhav Infrastructure Project, Ashoka Buildcon. Fluctuation in the financial performance (loss making company with stretched working capital cycle) remains a concern for us. Government’s focus on improving infrastructure investments has resulted in many structural reforms, leading to the road sector coming back into focus. The conversion of the benefits of these opportunities into financial numbers is expected to be prolonged. Even though the current IPO market has been witnessing a bullish sentiment, we suggest investors to AVOID the issue as we expect weak financial performance to persist in the near term.

Capital Market: ” Score 37/100, For FY 2017, consolidated net sales stood at Rs 10.25 crore with OP at Rs 2.13 crore. Interest cost stood at Rs 43.53 crore and depreciation at Rs 1 lakh resulting in loss at the PBT level of Rs 36.73 crore. After considering loss from associates of Rs 37.11 crore and MI of Rs 1 lakh, loss at the consolidated PAT level stood at Rs 73.89 crore. The company has been incurring losses in each of the past five years. The company raised further equity by issuing 2,66,50,000 equity shares to the promoters at a price of Rs. 205 per share in November 2016. This issue helped company in showing positive net worth due to the premium collected. The company’s pre-IPO consolidated book value stands at Rs 109. After the offer to the public at higher price band of Rs 205, the Book Value (BV) will stand at around Rs 142.4 at consolidated level. The offer at higher price band of Rs 205 is made at a price to BV of around 1.44.”

Choice Broking: “BRNL is a loss making entity. At the higher price band of Rs. 205 per share, its share is valued at a P/BV multiple of 2.7x (to its restated FY17 BVPS of Rs. 74.7) as against peer average of 1.7x (excluding Sadbhav Infrastructure Project Ltd.). .Coming on the valuation front, considering the profitability of BRNL and the above mentioned peers, it seems that the issue is aggressively priced.“

Hem Securities: “Co is bringing the issue at price band of Rs 195-205/share . Due to poor financials & low growth, at present co is not looking attrac-tive investment opportunity. Hence we recommend “Avoid” on issue.”

ICICIDirect: “Avoid, At the higher end of IPO price band of | 205, the stock is valued at 1.4x FY17 P/BV (post issue), which appears to be at par with other established
player such as IRB Infrastructure (1.4x FY17 P/BV). Looking at the quality
of projects (most projects commissioned in the past few years), we believe it should be at a discount to IRB.”