About the Company:
RKEC Ltd is a construction company primarily engaged in the business of Civil Construction such as construction of Highways, roads and bridges.
During the last decade, they have undertaken and successfully completed many construction projects in India covering states of Andhra Pradesh, Tamil Nadu, Gujarat, Odisha, Rajasthan and Maharashtra.
Recently they have also expanded their presence to three more states, Kerala, Uttar Pradesh and Manipur.
Company’s core business is designing and undertaking construction projects such as Bridges, Ports, dams, high-rise structures, airports, cross water, roads, highways, Oil and gas Pipelines, complexes and environmental structures across India.
Company has entered into projects for diverse range of clients including Defence sector, Railways, Ports.
Because of good reputation among clients they have been able to get many orders from diversified clients across various sectors.Company’s client list includes names like Adani Port, Vedanta Ltd, IVRCL Limited, Rashtriya Ispat Nigam Limited and ESSAR.
Company owns fleet of construction equipment for earth work, piling bridges.Company’s investment in the construction equipment’s has helped them in mobilizing the man, material and equipment to the project sites as and when the need arises.
Company’s Business Segments:
- Marine Work.
- Bridge Construction Work.
- Road & Building.
Management Team:
- Mr. Radhakrishna Garapati (Designation: Chairman and Managing Director)
- Mrs. Parvathi Devi Garapati (Designation: Whole-time Director)
- Mrs. Sita Ratnam Gudapati (Designation: Non Executive Director)
Objectives of the Issue:
- Working Capital Requirement.
- General Corporate Purpose.
- To Meet the Issue Expenses.
- Listing Benefits.
Financials of the Company:
| (in Crores) | FY 13 | FY 14 | FY 15 | FY 16 | FY 17 |
|---|---|---|---|---|---|
| Revenue | 81.31 | 58.64 | 71.74 | 113.50 | 200.12 |
| Net Profit | 2.79 | 1.07 | 1.96 | 3.19 | 13.12 |
Should you Invest in the IPO?
Let us analyse company’s growth in the last 4 years,the Company has grown at strong CAGR of more than 50% in its top line from FY14 to FY17 while operating profit of company has recorded the CAGR of more than 43% during the same year. Also on bottom line front, Company has posted whopping CAGR of more than 100 % from FY14 to FY17.
So the growth since last 4 years seems to be very good.But the next important point is will they be able to sustain the growth levels.So to find the answer we need to understand the current infrastructure scenario in india.
Recently government has declared that they will be investing heavily in the infrastructure space and a lot of infrastructure projects are going to be kicked off in the near term so naturally the infrastructure companies are going to benefit from these investments and I think RKEC projects should also benefit in the long-term.
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 25th September 2017 |
| Issue Closes on:. | 28th September 2017 |
| Issue Price | Rs.45 |
| Face Value | Rs.10 |
| Minimum Lot | 3000 |
| Minimum Investment | Rs.1,35,000 |
| Issue Constitutes | 26.58% |
| Issue Size | Rs.28.70 cr |
| Market Cap | Rs.107.95 cr |
| Listing at | NSE SME |
| Equity Shares Offered | 63,78,000 |
| Equity Shares Prior | 1,93,12,600 |
| Equity Shares after the issue | 2,39,90,600 |
IPO Valuation parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 6.8 | 6.6 | 33.59% | 20.24 |
Markets Guruji Opinion:
| IPO View | Apply For: | Expected listing Gain: |
|---|---|---|
| Subscribe | Long Term | 20% |
