Karda Construction Ltd IPO ccomprises of public issue of 43,00,000 shares out of which 23,00,000 will be fresh issue and 20,00,000 shares will be offer for sale by the promoters. The Karda Group w is a well known Nashik based group having its presence in the construction industry. .
Karda Construction Ltd IPO Details
| Issue Period | 16 March – 21 March 2018 |
| Issue Size ( Shares) | 43,00,000 shares |
| Issue Size (Rs. Cr) | Rs. 75.25 crore |
| Price Band | Rs. 175 – 180 |
| Bid Lot | 80 Equity Shares |
| Retail | 35% Allocation |
| BRLMs | ARYAMAN FINANCIAL SERVICES LIMITED |
| Registrar | Bigshare |
About Karda Construction Ltd:
- The Karda Group based at Nashik was founded by Mr Naresh Karda in the year 1994.
- Karda Construction Ltd initially concentrated on developing affordable housing in the residential segment and from year 2001 onwards, the group diversified into commercial segment.
- The company outsources key services like project construction and design to 3rd party construction companies / sub contractors / architects etc.
- Recently the company has ventured into construction contracts for public and private sector.
Karda Construction Ltd : Financials:
| Rs.In Crore | ||||
| HY 18 | FY17 | FY16 | FY15 | |
| Sales | 40.35 | 105.31 | 100.72 | 45.14 |
| PBIDT | 17.83 | 31 | 26.68 | 15.78 |
| Profit before tax | 8.14 | 12.47 | 9.33 | 4.43 |
| Profit After Tax | 5.52 | 8.03 | 6.37 | 3.08 |
| EPS (unadj) | 8.92 | 12.75 | 6.15 | |
| NAV Post Issue | 75.6 | |||
| Face Value | 10 | |||
| IPO Price | 180 | |||
| Post Issue Equity | 12.3 | |||
| EPS (Post IPO) | 6.53 | |||
| PE (post IPO) | 27.57 | |||
| Market Cap | 221.00 | |||
| Market cap / Sales | 2.10 | |||
Hindustan Aeronautics Limited : Rationale for Investment
- Karda Construction Ltd has completed 17 residential and commercial projects, aggregating 10 lakh sq. ft, till date.
- Company has 11 ongoing residential and commercial projects aggregating 15.3 lakh sq ft carpet area and 3 planned residential projects of 2 lakh sq ft.
- Company has has land reserves of 4 lakh sq ft of estimated developable land area in and around Nashik.
- Nashik’s realty market is geared for rapid growth going forward given its proximity to major cities like Mumbai and Pune and current saturation of the realty markets in both these cities.
- The company has bagged four government contracts with an aggregate contract value of Rs 24.71 crore from Goa and Maharashtra state governments
Risks & Concerns:
- Karda Construction Ltd is concentrated in geographical regions of Nashik, Maharashtra .
- A very small player with considerable equity dilution.
- Karda Construction Ltd has high debt of Rs 132.50 crore
Karda Construction Ltd IPO: Assessment
- Nashik based Karda Constructions is relatively a small-sized real estate company.
- The PE at the upper band of Rs. 180 works out to 27.7 times.
- This is only slightly lower than many well established players who have much larger foot print.
- I do not intend to apply for the Karda Construction Ltd IPO .
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. I may have vested interest in every stock I discuss and my views may be biased. Please do your own due diligence as stock market investments have high degree of inherent risk.