Maytas-NCC consortium wins airport projects from Karnataka
November 22, 2007
Two separate SPVs are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively
Maytas Infra Ltd. announced on Tuesday that a consortium involving itself, NCC Infrastructure Holding Ltd. and VIE India Project Development and Holding LLC has bagged an order to develop and operate proposed airports at Gulbarga and Shimoga on BOT (build-operate-transfer) basis.
The contract has been awarded by the Infrastructure Development Department of the Karnataka Government.
Two separate Special Purpose Companies (SPVs) are to be set up for the airport projects. Maytas Infra, NCC and VIE will hold 37%, 37% and 26% stake in the two SPVs, respectively.
The construction period is 24 months from the date of signing the agreements. The concession period is 30 years and the agreement can be extended for a further period of 30 years.
Source: indiainfoline.com
Sensex up 258 points by close
October 25, 2007
The markets ended firm on Thursday with the benchmark index closing at 18,770 levels, up 1.4 per cent or 258 points.
In broader markets, the Nifty moved up 1.3 per cent or 73 points to end the day at 5,568 levels.
“The Nifty needs to close above 5,580 levels to make an attempt of breaching the previous high,” said Anil Manghnani, Director, Modern Shares & Stock Brokers
“The markets are expected to be volatile. It is better that investors stay clear for at least a week,” added Vikram Bhatt, Director, Ajmera Associates.
The markets are also awaiting the developments of the crucial SEBI meet that will decide on regulatory norms for the stock markets.
SEBI Chairman M Damodaran along with his team is unlikely to go back on its P-Notes stand on Thursday. However, it may rework eligibility criteria for FII registration to help investors.
In world markets, Wall Street recovered from steep losses Wednesday amid hopes for an imminent interest rate cut. According to preliminary calculations, the Dow ended flat with a marginal fall of 0.01 per cent.
The Standard & Poor’s 500 index fell 3.71 points or 0.24 per cent, while the technology-dominated Nasdaq composite index lost 24.50 points to end the day at 2,774 levels.
Back home, leading the charge at the Sensex was Tata Steel. The counter moved up over eight per cent or Rs 73. ICICI Bank, Maruti Suzuki India, Bharti Airtel, Wipro, Hindustan Unilever, Tata Motors, HDFC Bank and Mahindra & Mahindra were some of the other notable gainers.
However, Cipla at Rs 186 levels tanked five per cent. Dr Reddys, ACC, HDFC, Reliance Energy, Infosys Technologies, Satyam Computer, Reliance Communication, Ranbaxy, TCS and BHEL also closed in the red.
Metals hot
Among sectoral indices, the BSE metal index was the biggest gainer that moved up four per cent or 629 points. Jindal Saw, SAIL, Ispat Industries, Jindal Steel & Power, Sesa Goa, Bhushan Steel, Sterlite Industries and NALCO logged smart gains besides Tata Steel.
Banking scrips continued on their journey north with ICICI Bank surging 4.4 per cent or Rs 48. Bank of Baroda, Canara Bank, Punjab National Bank, SBI, Kotak Mahindra Bank, Centurion Bank of Punjab, Karnataka Bank and Axis Bank also held firm.
Amtek Auto (up 8.9 per cent), MRF Limited (up 6.1 per cent), Bharat Forge (up 4.1 per cent), Maruti Suzuki India (up 3.6 per cent), Tata Motors (up 2.4 per cent), Mahindra & Mahindra (up 1.7 per cent) and Exide Industries (up 0.7 per cent) raced ahead in the auto pack.
New listing
Maytas Infra made its debut at the bourses on Thursday. The stock listed at Rs 511 as against the Initial Public Offer (IPO) price at Rs 370.
The Hyderabad-based construction company and infrastructure developer was focused on irrigation, roads, bridges and buildings.
“We have a pan-India presence and have recently opened an office in Dubai. We are pursuing BOT projects in roads and other infrastructure projects. Some of the road sectors give us 12-13 per cent EBDITA margin,” said PK Madhav, CEO, Maytas Infra.
It is now positioning itself for water and waster water management, SEZ, ports and airport sectors. The stock closed at Rs 614 levels.
Source: ndtvprofit.com
Subscribe to Maytas Infra, looks reasonable: India Infoline
October 3, 2007
Maytas Infra, a construction and infrastructure development company, is open for subscription with an initial public offering of 88.5 lakh equity shares of Rs 10 each for cash at a price to be decided through a 100 per cent book building process.
The issue will close for subscription on October 4, 2007. The company has fixed the price band between Rs 320 and Rs 370 per equity share.
India Infoline report on Maytas Infra IPO
Investment rationale
Diversified portfolio with pan India presence
MIL construction portfolio is diversified across six sectors including irrigation, roads and bridges, buildings and structures, power, oil and gas, and railways. Their infrastructure development projects are into power, road and port sectors. These 11 BOT projects are geographically widespread through 12 states in India.
Along with national presence they are exploring international opportunities in construction space; they have established a joint venture with Dhabi Contracting Est. in Dubai in December 2006.
Investment in infrastructure to witness a CAGR of 13.8%
India is the fourth largest economy in the world in GDP terms on the basis of purchasing power parity. Over the last decade, India has been one of the fastest growing economies in the world with a real GDP of 9.2% in FY07. Infrastructure has been a big contributor. This growth is visible in roads, bridges, airports, commercial buildings, townships, power systems, rural and urban development.
According to the Pre-Budget Memo 2006- 07 prepared by the Construction Federation of India, construction is the second largest employer after the agriculture sector. Currently, the construction industry in India, directly or indirectly, employs approximately 32mn workers, accounts for 40% of gross investment and 60% of infrastructure costs.
According to CRIS INFAC, investment in construction is expected to grow to approximately Rs 6,129 billion in 11th five year plan from Rs 3,213 billion in 10th five year plan at a CAGR of 13.8%. The construction segment constitutes a significant part of infrastructure development in the economy.
The infrastructure boom is also likely to help construction companies. Government initiatives in the form of developing national highways, golden quadrilateral, and setting up public –private partnerships and BOT models are likely to attract strong investment in the infrastructure sector.
Healthy order book position of 5.6x FY07 revenue
MIL has a healthy order book of Rs 35.8 billion, 5.6x FY07 revenues as of June 30, 2007, inclusive of its joint venture projects. On a standalone basis, the order book stands at Rs 26.9 billion, 4.2x FY07. It also includes higher-margin construction contracts in the power, oil and gas, infrastructure and railway sectors. MIL has also placed a bid for lift irrigation projects rather than for purely irrigation contracts. Irrigation construction contracts account for maximum contribution to the revenue.
Risk and concerns
Price fluctuations
MIL has contracts on fixed-price, lump-sum or item-rate basis, the company is exposed to price escalation in construction materials, fuel and equipment.
Controlling interest
MIL holds less than 50% of controlling interest in most of its SPV projects.
Single supplier
The Gautami power station and the KVK Nilachal power station rely on a single supplier, GAIL and Mahanandi Coal Fields respectively, for fuel as well as external operators for their operation and maintenance. Any disturbance in supply would affect their operations.
New entrance in infrastructure
MIL is very new in the infrastructure sector. It has completed only one road project till date in this vertical.
Government policies
A substantial part of MIL’s revenue has been from government projects. Any change in the political or financial policies will directly affect the company’s operating margins.
Recommendation
Based on an order book position of Rs 35.8 billion and an aggressive foray into the infrastructure sector with 11 BOT projects, MIL seems to be fundamentally strong. On a post issue basis, considering the EPS of Rs.9.4, the issue is available at P/E at 34.2x lower price band and 39.6x upper price band. The issue looks reasonable at both the ends compared with its peers. We recommend Subscribe.