As the central government is looking toward unloading its stake on a railway company Ircon International Ltd., run by central government, it is going to launch it’s IPO of three days on Monday. IPO stands for an initial public offering.
Via maiden offer, the government is planning to raise Rs 467 crore by selling its stake of 10.5 %. Now the company offers its share of 99.1 lakh at the price of Rs 470-475 each.
Ircon International Ltd.: Business
Ircon International Ltd is indulged in the business of the construction as well as the engineering. From the Railway Ministry, this company is receiving about 87 % of its orders. This state-run, Ircon International Ltd. Is having its functioning area on the business such as construction and procurements, engineering, and the projects for build- operate –transfer.
Over the last 3 financial years, Ircon’s order is growing at the rate of 30 % annually. Ircon International Ltd. The present order provides revenue perception of more than 5 years. This is planning to concentrate on the orders of high values as well as it provides efficient margins which make it face low competition. Now the bid for it usually happens for either Rs 500 crore or more.
Ircon International Ltd., Financials
As per data on March 31, the net worth of Ircon’s stood around Rs 3,762 crore, which was translated to the book value of the share worth of Rs 400. As per March data, Ircon International Ltd had owned the cash revenue nearby Rs 1,200 crore.
In the six Last year, Ircon’s earnings on the interest, amortization, and depreciation, tax margins lessen to 11.2 % by more than 950 basis points.
Ircon Fared Over Last 6 Years: How Much?
Ircon International Ltd is planning to stir up its extent to the international market as well as concentrating on the projects of high value. It has the debt of Rs 3,200 crore and it has to do funding of land monetization for railway projects. But when this project will be completed, the debt passes on as per the company. But Railway ministry will bear the burden of interest of the debt.
In the comparison of the last year with the fiscal year of March 2018, the company’s return ratio was gone higher.
Ircon Paid Shareholders: What Method?
For the last financial year, Ircon’s per-share earnings were Rs 44. According to the BloomberQuint’s calculations, the price to earnings ratio happens to be 10.9 times at the upper side of the price band.
As the company gets most of the part of the orders from the Indian Railways so there are no any direct peers of it. But only for valuation comparison, some companies are considered which include NBCC (India), RITES Ltd. And Engineers India Ltd.
Brokerages on Ircon
- Investors are eligible to subscribe the listing profits.
- IPO valuation is looking decent, can give the order to book financials and positions.
- It is trying to improve the international business and planning to extend aid growth.
- To add the investment and cash, it is making compelled to Subscribe.
- The core business of the company is asset-light remarkably.
- The need of the working capital is negligible and it has scalability of main business is very vast.
- Subscribe with confidence at offer price but on the listed profits.
- This company is having a big-ticket order which is varied clientele all across the sectors.
- balance sheet position is strong
- An attractive as well as a higher end of the price band, suggest to Subscribe.
- Business variation is favorable for the company IPO
- Book healthy order for the company.