Dilip Buildcon: Run up to IPO

dilip2(To be updated further. last update 03/08/16)

Related Post : https://ipoandmore.com/2016/07/26/dilip-buildcon-financials-peer-comparison/

Day 3: Dilip Buildocon, an aggressive player n infra sector subscribed aggressively  in the last hours of closing.  Overall subscription  : 20.95,  .7 x  Overall, QIB 9.76 x,   HNI 79.6 x, retail 2.35x .

HNI 1.02   x, retail .67 x . Grey market premium moves to paltry 10-15 range.

Day 2: Some pickup in subscription  : .7 x  Overall, QIB .49 x, HNI 1.02   x, retail .67 x . Grey market premium moves to paltry 10-15 range.


Day 1: Poor subscription reported : .09x  Overall, retail .17 x. Others negligible


Brokerage  Views / Analysts / Business Newspapers:

  • SP Tulsian :  Low profit margin couple with high debt makes the issue risky. Given low single digit margins, leveraged balance sheet and large funds locked in working capital, investors can give a miss to this IPO.
  • Capital Market : 40/100 : Has concerns on High interest costs incurred by the company which have a detrimental effects on its margins
  • Hindu Business Line: Growth at a cost, High debt a matter of concern
  • Reliance Securities :  Dilip Buildcon would generate a strong cash flow on the back of healthy margins and improving working capital cycle. The brokerage house believes the promoters have left something on the table for the investors in terms of valuations and expect the issue to generate a better return in the near to medium term for the investors. Reliance Securities has given ‘Subscribe’ rating to the IPO.
  • Angel Broking:  Dilip Buildcon is set to give healthy growth on the topline as well as the bottom-line front on the back of its strong order book. The EPC player registered return on equity of 22.4 per cent in 2015-16, which is among the best in the industry. Given the growth prospects and the likelihood of strong free cash flow generation, this issue has the potential to deliver good returns for investors in the near-to-medium term. The brokerage house advises investors to Subscribe’ \to the issue.
  • Hem Securities:  Subscribe  for medium to long term on issue.
  • Arihant Capital Markets: Subscribe
  • Economic Times : Feels that issue is lucrative for investors .Superior financial performance in the past four years, strong order book which provides high revenue visibility, execution of projects well before deadlines, and lower valuation in comparison with the industry average are major positive factors for the Bhopal-based construction company.
  • Business Standard : The IPO offers investors an interesting proposition wanting to cash-in on road infrastructure where regulatory hurdles are being cleared up and execution is picking up. Factors that work in favour of Dilip Buildcon are its strong EPC focus, margin-accretive business model and consistent track record of project completion, apart from reasonable valuations.
  • Choice Broking: Subscribe
    The brokerage said the company’s BOT projects are quite attractive, as they are mainly annuity-plus toll revenue projects.
  • Dalal Street : Subscribe
  • JainMatrix Investments : Avoid. It is a rough road
  •  Vivek Pandey(Fund Manager) : Avoid

Allotment to Anchor Investors:  

(19/07/2016)DBL sold  8.95 million shares to 10 institutional investors at Rs219 per share,to raise Rs. 196 crore as part of allotment to anchor investors.

Investors acquiring shares in the anchor allotment include SMALLCAP World Fund Inc., Abu Dhabi Investment Authority, HDFC Trustee Co., Nomura Singapore Ltd, DB International (Asia),  Infrastructure Fund , East Bridge Capital Master Fund.

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