Dilip Buildcon to debut on the streets today

The markets are all set and ready as Dilip Buildcon gears to get hooked with the exchanges on Aug 11. Company recently concluded its Rs 650 crore IPO on Aug 3, which was subscribed by more than 21 times. The price band for the issue is Rs 214 – 219 per share. Net proceeds from the fresh issue will be used for prepayment or scheduled repayment of a portion of term loans (around Rs 202.38 crore), working capital requirements (around Rs 200 crore) and general corporate purposes; while the company will not absorb any proceeds from the offer for sale.

On the financial front the company has a strong balance sheet and income statement. Total revenue of the company has grown by a CAGR of 30 per cent in FY16. The company has consistently maintained operating profit margin in the range of 23 per cent to 24 per cent over the span of FY13-16. In FY16, the net profit of the company has grown by 124 per cent, led by the Road segment. On the contrary, it would be interesting to see whether the shares are listed at a premium or at a discount. Recently, L&T Infotech was listed at a discount. Company operates in two primary business verticals - construction (roads, irrigation and urban development projects have contributed 92.7 percent to FY16 revenue); and infrastructure development (building, operation and development of road projects with a focus on annuity projects that accounted for 7.3 percent of the FY16 revenue).