Maytas Infra Limited is entering Indian primary market with a Public issue of 8,850,000 equity shares of Rs.10 each. The issue is a 100% Book Built. Below are the salient features of this issue:
Business of the Company
Company is a construction company and infrastructure developer. Its business is organized into two parts – Construction as a contractor on a contract basis and Infrastructure Development which involves identifying, sourcing, developing, and operating projects in infrastructure sectors. In construction business, Maytas has historically focused on the irrigation, roads and bridges, and buildings infrastructure sectors. They have completed, and continue to undertake, construction projects in these sectors across 12 states of India.
Promoters
The company is promoted by the individual promoter B. Teja Raju. His family members are co-promoters of the company.
Financials
Maytas Infra Limited is a profit making company. For the FY ended March 31, 2006, the company clocked a turnover of Rs. 223 crores. The restated net profit for the same period was about Rs.26 crores. For FY 2007, till Dec’2006, company had clocked a turnover of Rs. 312 crores and a net profit of Rs.29 crores. For FY 2005 and FY 2004, the top line was Rs. 262 and Rs. 151 crores approximately. The net profit for FY 2005 was Rs. 58 crores and for FY 2004 net profit was Rs. 6 crores.
Particulars of the Issue
Maytas Infra Limited IPO is a fresh 100% Book Building issue of 8,850,000 Equity Shares of Rs. 10 each. At least 2,655,000 Equity Shares of Rs. 10 each is reserved for the retail investors.
Basis for Issue price
Maytas Infra Limited claims that it has diversified portfolio across various infrastructure sectors and geographic locations. It has extensive experience and strong track record. It has consistent records of making handsome profits.
Objects of the Issue
The main object is to invest in couple of associate companies. One of them is involved in constructing elevated highway project of the Bangalore-Hosur section of National Highway-7. Another associate company KVK Nilachal Power Private Limited is developing, constructing and commissioning a 300 MW coal-based power plant in Orissa. SV Power Private Limited (“SV Power”) for setting up a 56 MW coal washery reject based power plant and a 2.5 million metric tonne per annum coal washery at Korba District, Chattisgarh.
Risks
Following are the key risks which can impact company’s performance:
a. Company relies on government entities for substantially all of our revenues. Policy changes may result in projects.
b. Competition is intense in infrastructure sector.
c. Delays in the completion of current and future infrastructure-related contracts and BOT/BOOT projects could have adverse effects on the Company’s financial results.
d. We require certain approvals or licenses in the ordinary course of business and the failure to obtain or retain them in a timely manner, or at all, may adversely affect the Company’s financial results.
e. Skilled labor availability will affect timely completion of projects and hence the company revenues.
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