PSP Projects: Brokerage Views & Run up to IPO

PSP Projects Limited IPO
This post on PSP Projects Limited IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on PSP Projects Limited IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to PSP Projects Limited IPO or not.

Related Posts: PSP Projects IPO Review

PSP Projects Limited IPO : Subscription etc.  
Subscription: HUDCO  IPO  ( x times)
  QIB NII Retail Total
Day 3(approx) 8.38 x 10.39 x 6.47 x 8.58x
Day 2 .
Day 1   x  0.15 x 0.38x 0.11x
PSP Projects IPO: Grey Market Premium etc.

21/5/17 Grey Market Premium Rs. 15-20/- 
17/05/17 Grey Market Premium Rs. 40-45.

Anchor investors

PSP Projects raises Rs 95 crore ahead of its IPO on Tuesday by allotting 45.36 lakh equity shares at Rs 210 per share to nine anchor investors, including Reliance Mutual Fund, SBI Mutual Fund, Axis Mutual Fund, Sundaram Mutual Fund, Birla SunLife Insurance and TATA AIA, among others. Click here for Anchor Investors of PSP Projects Limited

Consolidated Views of Brokerages, Analysts, Business New Paper Reports, Management Views on PSP Projects IPO .

Ajcon Global: “At the upper end of the price band of Rs. 210, the IPO is valued at 26x at annualized FY17E post issue EPS of Rs. 7.96. With due consideration to factors like a) strong track record of successful project execution, b) visible growth through a robust order book and growing pre – qualification credentials, c) experienced promoters, d) long standing relationship with its customers, e) one of the few infrastructure companies operating through world class software ‘SAP,’ e) robust ROE and stable operating cash flows with strong growth, we recommend “SUBSCRIBE” to the issue.”

Capital Market: ” Score 35/100, ost of the past financial track record is due to high-margin government projects that may or may not get repeated. Further, bidding for orders outside Gujarat will not result in a consistent margin performance of the past and business and execution risks will increase going forward, given the size and scale of operations of the company. The scrip at current valuation offers very little for investors.”

Angel Broking: “In terms of valuation, PSP’s P/BV multiple annualised 9MFY2017 at 7.9x, works out to be at premium to peers (Ahluwalia Contracts 5.2x, Nila Infra. 3.3x, JMC projects 1.4x, Prakash Controwell 0.4x, RPP Infra 3.7x). Moreover, PSP is aspiring to get in the higher ticket size projects, which is dominated by well reputed players. Management’s lack of experience in diverse geographies and lack of visibility of future order book may become a cause of concern for growth strategy. Hence, we recommend NEUTRAL rating on the issue.”

Centrum: ““PSP Projects has a good track record of on-time execution of projects and enjoys long-term relationships with its clientele, which it plans to leverage in order to optimise the project mix. The government’s focus on infrastructure spends would augur well too, The IPO is valued at 25.1 times PE on FY17E basis (post dilution), which is not cheap, but appears to be comfortable.”

SMC : “Considering the P/E valuation on the upper end of the price band of Rs. 210, the stock is priced at pre issue P/E of 21.84x on its FY17 EPS of Rs. 9.61. Post issue, the stock is priced at a P/E of 27.31x on its EPS of Rs. 7.69. Looking at the P/B ratio at Rs. 210 the stock is priced at P/B ratio of 7.15x on the pre issue book value of Rs.29.36 and on the post issue book value of Rs. 67.41 the P/B comes out to 3.12x. Though the company provides services across the construction value chain, ranging from planning and design to construction and post-construction activities to private and public sector enterprises, but it has had negative cash flows in the recent periods. Moreover, its business is relatively concentrated in the state of Gujarat. Hence investors with high risk appetite may consider investment in the issue.

Choice Broking:”Considering attractive construction sector outlook, past financial performance and future outlook of the company, we recommend a “Subscribe with Caution” rating for the public issue.”

Jainam Wealth : “recommend investors to “SUBSCRIBE” to the PSP Projects Ltd IPO considering strong track record for successful execution of projects, strong order book of Rs.729 crore, robust financial such as ROE(%) is 34.21% in FY16; Interest cover is 10x in FY16. Company available at P/E of 27x on FY16 EPS and 9x P/BV on upper price band.”

SP Tulsiyan website: “Very strong historic growth, visible order book, leverage-free balance sheet give the issue sound fundamentals. However, sudden rise in margins in 9MFY17 before the IPO, small size with geographic concentration, listing in T segment and less fancy for construction stocks currently on the bourses go against the company. Pricing is also not too cheap. Hence one can give the issue a miss. However, the company can be a promising stock and one must keep it on radar, gauging financial performance over the next couple of quarters.”

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