Mumbai-based construction company Capacit'e Infraprojectsis all set to open its Rs 400-crore initial public offering on September 13, with a price band of Rs 245–250 per share.
The issue will close on September 15. Bids can be made for minimum of 60 equity shares and in multiples of 60 shares thereafter.
The book running lead managers to the issue are Axis Capital, IIFL Holdings and Vivro Financial Services. Its equity shares are proposed to be listed on NSE and BSE.
Here are 10 things you should know before investing in IPO:-
Incorporated in August 2012, Capacit'e provides end-to-end construction services, including constructing concrete building structures as well as composite steel structures. It also provides mechanical, electrical and plumbing (MEP) and finishing works.
It predominantly operates in the Mumbai metropolitan region (MMR), the national capital region (NCR) and Bengaluru.
The company works for a number of reputed clients include Kalpataru, Oberoi Constructions, The Wadhwa Group, Saifee Burhani Upliftment Trust, Lodha Group, Rustomjee, Godrej Properties Limited, Brigade Enterprises Limited and Prestige Estates Projects Limited.
As of May 31, 2017, it has an order book aggregating to Rs 4,602.47 crore, with projects spread across major regions in India, including the MMR, NCR, Pune, Hyderabad, Bengaluru, Chennai, Kochi and Vijaywada.
The order book is nearly 4 times the consolidated revenue for FY17 and consisted of orders for construction of 12 super high rise buildings, 23 high rise buildings, six other buildings, 14 gated communities and one villament.
Objects of the Issue
The company will utilise net proceeds of the issue for funding working capital requirements (Rs 250 crore); funding purchase of capital assets (system formwork) (Rs 51.95 crore); and general corporate purposes.
Company's consolidated revenue from operations increased sharply from Rs 214.26 crore in FY14 to Rs 1,157 crore in FY17.
Capacit'e has outstanding borrowings of Rs 316.34 crore as of May 2017.
As of May 2017, company has total order book of Rs 4,602.48 crore under residential, commercial and institutional segments.
Break up of order book by type of construction:-
Break up of order book by geographic regions:
It predominantly operates in the Mumbai metropolitan region (MMR), the national capital region (NCR) and Bengaluru. Its operations are geographically divided into MMR and Pune (West Zone), NCR and Patna (North Zone) and Bengaluru, Chennai, Hyderabad, Kochi and Vijaywada (South Zone).
> Company intends to remain focused on building construction in order to sustain profitable growth.
> Company sees significant potential for building construction services being required in the near future after the announcement of recent government initiatives such as 'Housing for All by 2022” by the Union Cabinet.
> Company intends to increase presence in MMR, NCR, Bengaluru, Chennai, Hyderabad and Pune. Additionally, it intends to expand presence in other cities, such as Ahmedabad, which it believes may present high growth potential in the near future.
> Company intends to undertake projects to be executed on a design-build basis.
> Company intends to seek a greater number of lock-and-key projects, where it undertakes building construction services, including MEP, finishing and interior services.
> Company intends to bid for, and undertake, construction projects from select public sector clients in and around current area of operations.
> Company wants capitalise on changes in the construction industry that will arise on account of the implementation of the RERD Act.
Rohit R Katyal, Rahul R Katyal and Subir Malhotra are promoters of the company, who together hold 37.51 percent stake in the company. Rohit R Katyal and Rahul R Katyal are brothers.
Promoters & promoter group hold 57.29 percent stake in the company and the rest is held by public shareholders.
Here are top 10 ten shareholders of the company as of August 31, 2017:-
Management Organisation Structure
In the last four fiscal years (being a period since the incorporation of the company), Capacit'e Infraprojects paid an interim dividend of Rs 2 per share in the year ended March 2016 and Rs 0.5 per share in FY17.
Risks and Concerns
Here are some risks and concerns pointed out by brokerage houses:-
> Business concentration in MMR, Chennai and NCR - The company's projects in MMR accounted for 62.5 percent while Chennai & NCR account for 10.77 percent, 6.32 percent of orderbook as on May 31, 2017, respectively.
> Contingent liabilities may adversely impact financial condition.
> Pending litigation involving company.
> Unavailability or shortage of a pool of contract labor or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing contractual labor may have an adverse impact on the business.
> Capacit’e is dependent on both availability and prices of steel and ready-mix concrete.
> Inability to implement projects on schedule.
> Entry into public sector could result in higher working capital requirement.