VKS Projects IPO Fully Subscribed
DSIJ Intelligence / 05 Jul 2012
The VKS Projects IPO which opened on Friday 29-Jun-2012 has been subscribed 1.03 times by last day i.e. yesterday. In the first 3 days IPO saw a cold response from investors and it was subscribed only 0.5 times.
The QIB category for which 50% of shares of IPO have been reserved is fully subscribed. Less than 50% shares in the NIB category have been subscribed while Retail category was subscribed for 1.13 times.
| Category | Shares Offered | Subscribed |
|---|---|---|
| Qualified Institutional Buyers | 50 L | 1.15x |
| Non Institutional Investors | 15 L | 0.38x |
| Retail Individual Investors | 35 L | 1.13x |
| Total | 1 Cr. | 1.03x |
Company is raising the funds (Rs 55 crore) from the equity market to fund its working capital requirements, to purchase process related equipments and to meet issue related and general expenses.
Founded in 1998, Navi Mumbai based VKS projects is an EPC contractor engaged in the business of undertaking Mechanical and Infrastructure construction based EPC Contracts. It caters to various industries which include oil and Gas, textile, petro-chemicals, pharmaceuticals etc.
The IPO price at the upper band is quite steep to the industry peers. Its high client concentration is also a cause of worry. Besides most of its revenues are tied up in form of receivables which is also a cause of concern. The exponential growth which it has witnessed does not seem sustainable. The IPO has received credit rating of 1 as per credit rating agency CRISIL indicating poor fundamentals.
We have clearly advised our readers to avoid this IPO as there is a low revenue visibility since its order book is of lower value.
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