Ashoka Buildcon Ltd IPO Message Board (Page 22)

Dear Mr. KKji at 181
I am sure Ashoka will give you good returns on short as well long term investment. People miss guide you. Don't miss apportunity of making/invest money. I am very much assure you will get good money.

Dear All,
Today is the last of Ashoka IPO. Dont miss apportunite. Big BOT porojects in hand. Almost Avg. 21 year (very strong) toll collection period in hand. You see Growth of Road infra sector. Day by day trafic is increasing. Go ahead & invest & grab money.

KKji at 181

Sir

avoid Ashoka

avoid Sea TV

AVOID BEDMUTHA

If you are getting impatient so much and want to take risk

Then give me that money

Ill give you 40% return

in a month and charge 1% commision on buying+selling

in safe stoks that are value buys

LOLLLLLLLLLLLL..!!


POINT IS DO NOT RISK

AS GEM SAID PROTECTION OF CAPITAL

IS FIRST PRIORITY

first rule of investing is protection of capital wether for short or long term

regards



Regards

Premium Investment is comparing apples with banannas. Asoka & ITNL have different genes. Their business model is way apart. While ITNL is predominantly into Annuity type, Ashoka is a pure BOT player. The duration of toll collection is 21 years for Ashoka, while it is less in ITNL. The advantage of Road Traffic exponential growth is captured by Ashoka and not by ITNL.
I am aghast at Premium Investment finding lacunaes in RHP. page 31 of RHP clearly states the amount to be raised at 225 crores . The whole story from Premium Investment contains half truths.
Since Ashoka operates Toll through subsidaries, the toll collection is reflected in Consolidated Restated financials. Total toll collection is Rs. 165 crores for Ashoka. Let Premium Investment ( S.P.Tulsian ) state the comparative figures for ITNL. Wise investors will always spot good opportunity and that is available in Ashoka. Already investors have started moving out of IRB & ITNL and they will find a value pick in Ashoka

its 30 times
listing above 400

its going to subscribe 3 times today keep watching

DEAR all
IF YOU AVOID THE ISSUE, YOU WILL REGRET.S.P. tulsian 's analysis is based on his wrong understanding of the sector.Ashoka is focussed on BOT Roads while ITNL is Annuity focussed. In annuiity type of project, the returns are limited to recovering project cost. In toll based road projects, the upside through Traffic growth is encashed over a longer toll collection period , than annuity. SPTulsian has compared apples with banannas. So the decision is yours !

Ashoka IPO very good. subcribe today appx 8 to 10 times

TECPRO SEEMS A MUCH BETTER OPTION THAN ASHOKA BUILDCON

PREMIUM INVESTMENT SAYS AVOID ASHOKA BUILDCON
Sep 23, 2010 02:35 pm
Expensive Toll

Ashoka Buildcon is entering the capital market on 24th September 2010, with a public issue of upto Rs. 225 crores, in the price band of Rs. 297 to Rs. 324 per share. It is strange to see the company, not even taking pain to state the amount, it proposes to raise, in Capital Structure, on page 31 of RHP.



Apart from this incomplete information, even some misleading or incorrect information is given in the RHP. On page 7 of RHP, it is stated that the Company believes that they currently operate one of the highest number of toll based BOT projects in India. Is it in terms of numbers or kilometers of lanes? The company currently has interest in 23 BOT road projects, for approx. 3,498.35 kms. of lanes in 5 states. As against this, IL&FS Transportation Network, in February 10, had 17 BOT road projects comprising approx. 9,397 lane kms., with pan India presence. See what all a company has to do, to sail through its IPO! But then what is the BRLM doing in this case?



Apart from BOT projects, the company has its EPC or contracting division to construct roads for its BOT projects, as also for third parties, as also constructing industrial and institutional buildings. RMC and Bitumen Division and Toll Collection Contract Division, have either inhouse or insignificant contribution, in the consolidated financial performance of the company.



For FY10, on consolidated basis, the total income of the company was at Rs.1,116 crores with PAT at Rs. 76 crores. This translates into an EPS of Rs. 16.65 for the year, on equity base of Rs. 45.69 crores. Net worth of the company as at 31-03-10 was at Rs. 450 crores, excluding Preference Share Capital of Rs. 12.44 crores. This translates into a book value per share at Rs. 98.



The object of the issue is to largely repay the loan of the company and its subsidiaries, to the extent of Rs. 115 crores, working capital requirements of Rs. 45 crores and purchase of capital equipments of Rs. 14 crores. As the company had a debt of Rs. 1,122 crores, as at 31-03-10, debt equity ratio worked at 2.43:1.



Inspite of the company having its topline contributed by EPC by about Rs. 995 crores, with toll of just Rs.45 crores, the issue looks quite expensively priced, at a PE of 18 to 19.50 times and PBV of 2.34 to 2.55 times, (post IPO), at the lower and upper price band.



This needs to be compared with the financial performance of IL&FS Transportation a pure BOT road and infrastructure play. This company had a topline of Rs. 2,400 crores for FY10, on consolidated basis, while PAT was placed at Rs. 344 crores, resulting in an EPS of Rs. 17.75 and Rs. 20 on diluted basis. Share now ruling at 343 is ruling at a PE of 19.30 times, with book value at Rs. 86 per share, as at 31-03-10. This company is having advantage of size as reflected from its topline and net worth of Rs. 1,668 crores, as at 31-03-10.



Even JP Infra is much better road and infra company, which is implementing 165 km. Yamuna Expressway project from Noida to Agra. Apart from this, company was given 1,235 acres of land at 5 locations, for development. The total cost of the project of this company, including land cost of 6,175 acres and cost of construction of 165 km. expressway, is about Rs. 10,000 crores. The company is now monetizing its first parcel of land at Noida, which can result in development of over 120 million square feet of saleable area and present value of this land is estimated to be over Rs. 10,000 crores. Valuations of other 4 parcels of land is not considered here. The present market cap of this company is just at Rs. 12,500 crores.



Also, it is an unwritten law that there should be a gap of about 15% in IPO price and expected listing price of a share. So if, IL&FS, a better and bigger portfolio, with better parentage, is ruling at a PE of less than 19.50 times, how this company can dare to issue share in a PE of 18 to 19.50 times? On top of it, contracting or EPC companies, of this size are ruling at a PE of around 10 times. So, if we take an average of both, ideal PE of the company on bourses should be 14 times and issue should have been made at a PE of less than 12 times.



One can thus say that the issue is definitely aggressively priced and valuations look stretched even at the lower end of the price band. It is better to look for existing players by giving a pass to this issue.

CHARM HAS GONE OUT OF IPO MARKET WITH VERY POOR ALLOTMENT IN GOOD QUALITY IPOS N HEAVY ALLOTMENT IN POOR QUALITY IPOS LEADING TO LOSSES.

JUST SEEN COMPARE VATECH N CANTABIL IPO

LOT OF GOOD PICKS AVAILBLE IN SECONDARY

VERY REPUTED RESEARCH HOUSE EQUITYMASTER SAYS STRICTLY AVOID ASHOKA BUILDCON IPO AS IL&FS TRANSPORTATION IS AVAILABLE MUCH CHEAPER

Ashoka Buildcon Ltd.
Issue Summary ________________________________________
• Type Public Issue, 100% Book building • Shares on offer Fresh Issue of 7.6 m shares (lower band)
Fresh Issue of 6.9 m shares (higher band

• Size Rs 2.25 bn • Face Value Rs 10 per share

• Offer Price Rs 297 to Rs 324 per share. • Pre/Post-issue
promoter holding Promoter holding: 84.3%/73.4%*

• Minimum
subscription 21 shares • Promoters Ashok Katariya and Satish Parakh

• Listing BSE and NSE • Lead Managers Enam Securities Pvt Ltd, IDFC Capital Ltd and Motilal Oswal Investment Advisors Pvt ltd.

• Bid/Issue opens 24-Sep-2010 • Bid/Issue closes 28-Sep-2010

* Assuming dilution happens at higher band
Issue structure ________________________________________

Qualified Institutional Bidders (QIBs) Non-institutional Investors Retail Investors
Percentage of issue size 60% 10% 30%
Minimum Bid/Application size Such number of equity shares so that the bid amount exceeds Rs 100,000 Such number of equity shares so that the bid amount exceeds Rs 100,000 21 Equity Shares
Minimum Bid/Application size Not exceeding issue size Not exceeding issue size Such Number of equity shares so that the bid amount does not exceed Rs 100,000

Objects of the issue ________________________________________
The company proposes to utilize the funds raised via IPO in the following manner:-
Particulars Amt (Rs m)
Capital Expenditure 250
Working capital requirements 450
Repyament of loans 550
Repyament of subsidiary loans 600
The balance amount remaining after meeting the above requirements will be used for general & corporate purpose.
Company background ________________________________________

• Business
Incorporated in 1976, Ashoka Buildcon (Ashoka) is an integrated construction and infrastructure development company. Ashoka’s business is organized across 4 divisions, namely BOT Assets division (20.8% of sales), EPC division (69.5%), RMC & bitumen division (9.7%) and toll collection division. Prior to 1997, the company was solely engaged in construction of residential and commercial buildings. However, post acquiring EPC skills, the company ventured into bidding for contracts on a BOT basis. Currently, Ashoka has interest in 23 road BOT projects totaling approximately 3,500 kms in Maharashtra, Madhya Pradesh, Chhattisgarh, Karnataka and Orissa. Out of the 23 projects, 17 are operational while 6 are under construction.
In the EPC division, the company primarily procures raw material & equipment to construct roads for third parties. Ashoka is also involved in building power substations and various commercial and industrial buildings. As of now, the order book stands at Rs 32.5 bn. The company also sells RMC and bitumen. It has 14 RMC plants and one bitumen plant with total production capacity of 650 cubic mtrs per hour and 60 metric tonnes per day, respectively. Ashoka is also involved in collecting tolls on behalf of third parties. Till now, the company has entered into 4 agreements to collect tolls on bridges owned by third parties with the last contract having expired in February 2007.
• Key management personnel
Mr. Ashok Katariya, 61 years, is the executive chairman of the company. He is a gold medalist in BE from Pune University, India. He has previously worked with public health department in Maharashtra. In 1975, he started working as a contractor and subsequently ventured into civil construction and infrastructure development.
Mr. Satsih Parakh, 50 years, is the Managing Director of the company. He has a bachelor’s degree in civil engineering and has been associated with the Ashoka Group since 1982. He is a Member of Maharashtra Economic Development Council. He was also the chairman of the Institute of Engineers, Nashik in 2007.
• Sector
India is on the verge of witnessing a sustained growth in infrastructure buildup. The construction industry has clocked double digit growth over the past five years. As infrastructure plays a vital role in the Indian economy, many experts believe that in order to attain double digit growth, investment in infrastructure sector must be doubled in the 12th five year plan to US$1 trillion. In the 11th five year plan, roads have the second highest investment allocation (after power) across various infrastructure verticals. Although India has a dense road network, it mainly comprises of rural roads. As a result government plans to expand the existing road network by targeting to build 20 kms of highway each day. This might sound a bit aggressive as currently the government is able to execute only 5-6 kms per day. However, it has taken various steps to encourage private sector participation viz; - awarding projects on BOT basis, providing tax exemption for certain years and allowing 100% FDI through automatic route. Overall these plans should boost private sector participation in roads sector.
Reasons to apply ________________________________________
• Long history of timely execution: It should be noted that most of the company’s projects have been executed on time or prior to the scheduled completion date. One of the bridges on Mahad-Pandharpur state highway scheduled to be completed in 12 months was finished off in 38 days. Another bridge scheduled for completion within 18 months was wrapped away in 65 days! EPC projects generally provide early completion bonus while BOT projects generally get the benefit of collecting tolls earlier than expected thereby increasing the tolling period and revenues. In an industry where majority of the companies are plagued with execution issues, Ashoka’s performance certainly reflects its execution skills.

• Well established player in BOT projects: Ashoka was an early mover into the BOT asset development space. The company got its first BOT project in 1997 in Maharashtra when operating roads on a BOT basis was a new concept. After 13 years of bagging the first BOT project, Ashoka, right now has one of the highest number of road BOT projects in India. Currently, the company has interest in 23 road BOT projects with approximately 1,100 operational lane kms. Although this is small in size when compared to IL&FS transportation and IRB Infrastructure the company has already started work on additional 2,400 lane kms and would start tolling on 600-700 kms in the next 3-4 months itself.

• Integrated business model with in house traffic study expertise: The company has expertise to undertake all activities related to BOT projects in house - right from tendering to the collection of tolls. This ensures timely completion of projects and reduces reliance on sub-contractors. The company also undertakes entire construction on almost all of its BOT projects and also manufactures RMC and bitumen thereby reducing cost. Ability to undertake all the construction related work in house enables the company to capture the entire value in the BOT development business including EPC margins and developer returns.
Reasons not to apply ________________________________________
• Inability to refinance BOT projects may impact working capital: In order to generate additional working capital, the company has refinanced its debt taken on the BOT projects thereby increasing the total debt outstanding to about 150% of the project cost. It should be noted that once the project is completed there is no execution risk attached to it and thus lenders are willing to lend more money. However, if the company is unable to obtain refinancing or if the interest rates increase, it might face problems to obtain additional working capital thereby stretching the balance sheet.

• Inability to increase toll rates: The toll rates that the company charges with respect to the BOT projects are established in the project contract and are subject to escalation based on the CPI. This limits the ability of the company to increase toll rates in sync with increase in raw material prices. If the increases in toll rates do not keep pace with the increase in raw material cost it could have a material effect on the operations and financial condition of the company.

• Withdrawal of 80IA benefits: Presently, infrastructure development projects enjoy certain tax benefits under section 80 IA of income tax act. The income tax exemption of various BOT projects expire at various points in time. There is no assurance that the BOT projects will continue to enjoy the tax benefits in future. Further the advent of DTC could significantly alter the taxation regime applicable to various infrastructure development activities.
Financials Analysis ________________________________________
Consolidated financials

Profit & Loss (Rs m) FY06 FY07 FY08 FY09 FY10
Operating revenue 1,791 4,031 3,228 5,184 7,956

Expenditure 1,339 2,976 1,994 3,543 5,813

EBITDA 452 1,055 1,233 1,640 2,143

EBITDA Margin 25.2% 26.2% 38.2% 31.6% 26.9%

Interest Expense 212 452 474 646 490

Depreciation a Amortization 243 500 532 645 661

Other income 67 159 176 150 186

Profit before tax 64 262 403 499 1,177

Minority Interest -12 2 34 35 55

Tax 33 18 38 116 319

Net Profit/Loss 43 242 331 348 804

Net Margin 2.4% 6.0% 10.3% 6.7% 10.1%

Weighted Average no. of shares(m) 30.3 38.8 45.4 46.4 46.3

Diluted EPS (as reported by the company) (Rs) 1.4 6.2 7.3 7.5 17.4

Balance Sheet (Rs m)

Net Block 468 1,301 2,084 4,636 9,283

Net Worth 1,472 2,874 3,113 3,473 4,623

Debt 2,458 4,376 5,121 7,226 11,221

D/E 1.7 1.5 1.6 2.1 2.4

RoNW 2.9% 8.4% 10.6% 10.0% 17.4%

Concluding remarks ________________________________________
Ashoka Buildcon boasts of one of the highest number of BOT projects in the country. But when compared with established players like IL&FS Transportation (ITNL) and IRB Infrastructure (IRB Infra) on operational lane kms basis, the company lags far behind. Following table gives us an idea as to where Ashoka is placed when compared to the other leading BOT developers.
Ashoka Buildcon Ltd. comparative analysis
Particulars IRB Infra ITNL Ashoka Buildcon
No of Projects 16 23 23
Operational Lane Kms 3,406 4,081 1,099
EV/ Operational lane km 34.9 22.7 25.1*
TTM P/E 29.7 19.2 18.7
* At the higher band
On EV/operational lane km basis ITNL appears to be the cheapest of the lot. Thus if one wants to play on the road BOT story in India there are better option available in the market. Again the core construction business of the company is limited to construction of buildings and power substations and thus lacks diversification. The issue is priced at 17.1x and 18.7x FY10 earnings at the lower and higher band of Rs 297 and 324, respectively. We believe the issue is aggressively priced considering the concentrated order book and operational lane history of the company. Hence, we recommend you to "AVOID" the IPO

Rama, i am appling 25 full appl. In aska and techpro today.

Dear SJ,
I am giving in 3 full applications in Tecpro. My question is how to apportion the remaining amount. Sea TV subscription suggests it is going to be operated. What about Bedmuttha? Gem says it is an avoid. Is Ashoka also an avoid?

EMPLOYEE QUOTA ALREADY SUBSCRIBED 0.90 TIMES LOOKS GOOD TO ME. MUST APPLY

Hello all fellow boarders,.ravi bangalore,sj,sreedhar,ipofinder,chemcho,natrajan,gemipofinder,srini...i hav applied in following way,
careerpoint(1 lot each from two different people's account)
microsec(2 lots),eros(4 lots),vtechwabag(8 lots),cantabill(2 lots each from two different people's account expecting it to get oversubscribed by 8-10 times as recommended by sj,sreedhar,gemipo and other ppl who let me down since i expected there analysis and prediction tto come true ).Now can you ppl pls tell me hw much allotment,profit and loss do i sttand to make in each if i get allotment.In cantabil i wud surely get allotment nw ssince its nt subscribed multiple times,still i think its a good company and shud list giving at a premium of atleast rupees 30.wott u all say guys..also tell me the strategy for techpro and ashoka for tomorrow,i hav 50000 to invest

PREMIUM INVESTMENT SAYS AVOID
Sep 23, 2010 02:35 pm
Expensive Toll

Ashoka Buildcon is entering the capital market on 24th September 2010, with a public issue of upto Rs. 225 crores, in the price band of Rs. 297 to Rs. 324 per share. It is strange to see the company, not even taking pain to state the amount, it proposes to raise, in Capital Structure, on page 31 of RHP.



Apart from this incomplete information, even some misleading or incorrect information is given in the RHP. On page 7 of RHP, it is stated that the Company believes that they currently operate one of the highest number of toll based BOT projects in India. Is it in terms of numbers or kilometers of lanes? The company currently has interest in 23 BOT road projects, for approx. 3,498.35 kms. of lanes in 5 states. As against this, IL&FS Transportation Network, in February 10, had 17 BOT road projects comprising approx. 9,397 lane kms., with pan India presence. See what all a company has to do, to sail through its IPO! But then what is the BRLM doing in this case?



Apart from BOT projects, the company has its EPC or contracting division to construct roads for its BOT projects, as also for third parties, as also constructing industrial and institutional buildings. RMC and Bitumen Division and Toll Collection Contract Division, have either inhouse or insignificant contribution, in the consolidated financial performance of the company.



For FY10, on consolidated basis, the total income of the company was at Rs.1,116 crores with PAT at Rs. 76 crores. This translates into an EPS of Rs. 16.65 for the year, on equity base of Rs. 45.69 crores. Net worth of the company as at 31-03-10 was at Rs. 450 crores, excluding Preference Share Capital of Rs. 12.44 crores. This translates into a book value per share at Rs. 98.



The object of the issue is to largely repay the loan of the company and its subsidiaries, to the extent of Rs. 115 crores, working capital requirements of Rs. 45 crores and purchase of capital equipments of Rs. 14 crores. As the company had a debt of Rs. 1,122 crores, as at 31-03-10, debt equity ratio worked at 2.43:1.



Inspite of the company having its topline contributed by EPC by about Rs. 995 crores, with toll of just Rs.45 crores, the issue looks quite expensively priced, at a PE of 18 to 19.50 times and PBV of 2.34 to 2.55 times, (post IPO), at the lower and upper price band.



This needs to be compared with the financial performance of IL&FS Transportation a pure BOT road and infrastructure play. This company had a topline of Rs. 2,400 crores for FY10, on consolidated basis, while PAT was placed at Rs. 344 crores, resulting in an EPS of Rs. 17.75 and Rs. 20 on diluted basis. Share now ruling at 343 is ruling at a PE of 19.30 times, with book value at Rs. 86 per share, as at 31-03-10. This company is having advantage of size as reflected from its topline and net worth of Rs. 1,668 crores, as at 31-03-10.



Even JP Infra is much better road and infra company, which is implementing 165 km. Yamuna Expressway project from Noida to Agra. Apart from this, company was given 1,235 acres of land at 5 locations, for development. The total cost of the project of this company, including land cost of 6,175 acres and cost of construction of 165 km. expressway, is about Rs. 10,000 crores. The company is now monetizing its first parcel of land at Noida, which can result in development of over 120 million square feet of saleable area and present value of this land is estimated to be over Rs. 10,000 crores. Valuations of other 4 parcels of land is not considered here. The present market cap of this company is just at Rs. 12,500 crores.



Also, it is an unwritten law that there should be a gap of about 15% in IPO price and expected listing price of a share. So if, IL&FS, a better and bigger portfolio, with better parentage, is ruling at a PE of less than 19.50 times, how this company can dare to issue share in a PE of 18 to 19.50 times? On top of it, contracting or EPC companies, of this size are ruling at a PE of around 10 times. So, if we take an average of both, ideal PE of the company on bourses should be 14 times and issue should have been made at a PE of less than 12 times.



One can thus say that the issue is definitely aggressively priced and valuations look stretched even at the lower end of the price band. It is better to look for existing players by giving a pass to this issue.

EQUITYMASTER SAYS STRICTLY AVOID AS IL&FS TRANSPORTATION IS AVAILABLE MUCH CHEAPER

Ashoka Buildcon Ltd.
       Issue Summary      ________________________________________
• Type      Public Issue, 100% Book building       • Shares on offer      Fresh Issue of 7.6 m shares (lower band)
Fresh Issue of 6.9 m shares (higher band

• Size      Rs 2.25 bn       • Face Value      Rs 10 per share

• Offer Price      Rs 297 to Rs 324 per share.       • Pre/Post-issue
promoter holding      Promoter holding: 84.3%/73.4%*

• Minimum
subscription      21 shares       • Promoters      Ashok Katariya and Satish Parakh

• Listing      BSE and NSE      • Lead Managers      Enam Securities Pvt Ltd, IDFC Capital Ltd and Motilal Oswal Investment Advisors Pvt ltd.

• Bid/Issue opens      24-Sep-2010      • Bid/Issue closes      28-Sep-2010

* Assuming dilution happens at higher band
Issue structure      ________________________________________
      
      Qualified Institutional Bidders (QIBs)      Non-institutional Investors       Retail Investors
Percentage of issue size      60%      10%      30%
Minimum Bid/Application size      Such number of equity shares so that the bid amount exceeds Rs 100,000       Such number of equity shares so that the bid amount exceeds Rs 100,000       21 Equity Shares
Minimum Bid/Application size      Not exceeding issue size      Not exceeding issue size      Such Number of equity shares so that the bid amount does not exceed Rs 100,000

Objects of the issue      ________________________________________
The company proposes to utilize the funds raised via IPO in the following manner:-
Particulars      Amt (Rs m)
Capital Expenditure       250
Working capital requirements       450
Repyament of loans       550
Repyament of subsidiary loans       600
The balance amount remaining after meeting the above requirements will be used for general & corporate purpose.
Company background      ________________________________________

•       Business
Incorporated in 1976, Ashoka Buildcon (Ashoka) is an integrated construction and infrastructure development company. Ashoka’s business is organized across 4 divisions, namely BOT Assets division (20.8% of sales), EPC division (69.5%), RMC & bitumen division (9.7%) and toll collection division. Prior to 1997, the company was solely engaged in construction of residential and commercial buildings. However, post acquiring EPC skills, the company ventured into bidding for contracts on a BOT basis. Currently, Ashoka has interest in 23 road BOT projects totaling approximately 3,500 kms in Maharashtra, Madhya Pradesh, Chhattisgarh, Karnataka and Orissa. Out of the 23 projects, 17 are operational while 6 are under construction.
In the EPC division, the company primarily procures raw material & equipment to construct roads for third parties. Ashoka is also involved in building power substations and various commercial and industrial buildings. As of now, the order book stands at Rs 32.5 bn. The company also sells RMC and bitumen. It has 14 RMC plants and one bitumen plant with total production capacity of 650 cubic mtrs per hour and 60 metric tonnes per day, respectively. Ashoka is also involved in collecting tolls on behalf of third parties. Till now, the company has entered into 4 agreements to collect tolls on bridges owned by third parties with the last contract having expired in February 2007.
•       Key management personnel
      Mr. Ashok Katariya, 61 years, is the executive chairman of the company. He is a gold medalist in BE from Pune University, India. He has previously worked with public health department in Maharashtra. In 1975, he started working as a contractor and subsequently ventured into civil construction and infrastructure development.
Mr. Satsih Parakh, 50 years, is the Managing Director of the company. He has a bachelor’s degree in civil engineering and has been associated with the Ashoka Group since 1982. He is a Member of Maharashtra Economic Development Council. He was also the chairman of the Institute of Engineers, Nashik in 2007.
•       Sector
      India is on the verge of witnessing a sustained growth in infrastructure buildup. The construction industry has clocked double digit growth over the past five years. As infrastructure plays a vital role in the Indian economy, many experts believe that in order to attain double digit growth, investment in infrastructure sector must be doubled in the 12th five year plan to US$1 trillion. In the 11th five year plan, roads have the second highest investment allocation (after power) across various infrastructure verticals. Although India has a dense road network, it mainly comprises of rural roads. As a result government plans to expand the existing road network by targeting to build 20 kms of highway each day. This might sound a bit aggressive as currently the government is able to execute only 5-6 kms per day. However, it has taken various steps to encourage private sector participation viz; - awarding projects on BOT basis, providing tax exemption for certain years and allowing 100% FDI through automatic route. Overall these plans should boost private sector participation in roads sector.
Reasons to apply      ________________________________________
•       Long history of timely execution: It should be noted that most of the company’s projects have been executed on time or prior to the scheduled completion date. One of the bridges on Mahad-Pandharpur state highway scheduled to be completed in 12 months was finished off in 38 days. Another bridge scheduled for completion within 18 months was wrapped away in 65 days! EPC projects generally provide early completion bonus while BOT projects generally get the benefit of collecting tolls earlier than expected thereby increasing the tolling period and revenues. In an industry where majority of the companies are plagued with execution issues, Ashoka’s performance certainly reflects its execution skills.

•       Well established player in BOT projects: Ashoka was an early mover into the BOT asset development space. The company got its first BOT project in 1997 in Maharashtra when operating roads on a BOT basis was a new concept. After 13 years of bagging the first BOT project, Ashoka, right now has one of the highest number of road BOT projects in India. Currently, the company has interest in 23 road BOT projects with approximately 1,100 operational lane kms. Although this is small in size when compared to IL&FS transportation and IRB Infrastructure the company has already started work on additional 2,400 lane kms and would start tolling on 600-700 kms in the next 3-4 months itself.

•       Integrated business model with in house traffic study expertise: The company has expertise to undertake all activities related to BOT projects in house - right from tendering to the collection of tolls. This ensures timely completion of projects and reduces reliance on sub-contractors. The company also undertakes entire construction on almost all of its BOT projects and also manufactures RMC and bitumen thereby reducing cost. Ability to undertake all the construction related work in house enables the company to capture the entire value in the BOT development business including EPC margins and developer returns.
Reasons not to apply      ________________________________________
•       Inability to refinance BOT projects may impact working capital: In order to generate additional working capital, the company has refinanced its debt taken on the BOT projects thereby increasing the total debt outstanding to about 150% of the project cost. It should be noted that once the project is completed there is no execution risk attached to it and thus lenders are willing to lend more money. However, if the company is unable to obtain refinancing or if the interest rates increase, it might face problems to obtain additional working capital thereby stretching the balance sheet.

•       Inability to increase toll rates: The toll rates that the company charges with respect to the BOT projects are established in the project contract and are subject to escalation based on the CPI. This limits the ability of the company to increase toll rates in sync with increase in raw material prices. If the increases in toll rates do not keep pace with the increase in raw material cost it could have a material effect on the operations and financial condition of the company.

•       Withdrawal of 80IA benefits: Presently, infrastructure development projects enjoy certain tax benefits under section 80 IA of income tax act. The income tax exemption of various BOT projects expire at various points in time. There is no assurance that the BOT projects will continue to enjoy the tax benefits in future. Further the advent of DTC could significantly alter the taxation regime applicable to various infrastructure development activities.
Financials Analysis      ________________________________________
      Consolidated financials

Profit & Loss (Rs m)      FY06      FY07      FY08      FY09      FY10
Operating revenue       1,791       4,031       3,228       5,184       7,956

Expenditure       1,339       2,976       1,994       3,543       5,813

EBITDA       452       1,055       1,233       1,640       2,143

EBITDA Margin       25.2%       26.2%       38.2%       31.6%       26.9%

Interest Expense       212       452       474       646       490

Depreciation a Amortization       243       500       532       645       661

Other income       67       159       176       150       186

Profit before tax       64       262       403       499       1,177

Minority Interest       -12       2       34       35       55

Tax       33       18       38       116       319

Net Profit/Loss       43       242       331       348       804

Net Margin       2.4%       6.0%       10.3%       6.7%       10.1%

Weighted Average no. of shares(m)       30.3       38.8       45.4       46.4       46.3

Diluted EPS (as reported by the company) (Rs)       1.4       6.2       7.3       7.5       17.4

Balance Sheet (Rs m)

Net Block       468       1,301       2,084       4,636       9,283

Net Worth       1,472       2,874       3,113       3,473       4,623

Debt       2,458       4,376       5,121       7,226       11,221

D/E       1.7       1.5       1.6       2.1       2.4

RoNW       2.9%       8.4%       10.6%       10.0%       17.4%

Concluding remarks      ________________________________________
Ashoka Buildcon boasts of one of the highest number of BOT projects in the country. But when compared with established players like IL&FS Transportation (ITNL) and IRB Infrastructure (IRB Infra) on operational lane kms basis, the company lags far behind. Following table gives us an idea as to where Ashoka is placed when compared to the other leading BOT developers.
Ashoka Buildcon Ltd. comparative analysis
Particulars      IRB Infra      ITNL      Ashoka Buildcon
No of Projects      16      23      23
Operational Lane Kms      3,406       4,081       1,099
EV/ Operational lane km      34.9       22.7       25.1*
TTM P/E      29.7      19.2      18.7
* At the higher band
On EV/operational lane km basis ITNL appears to be the cheapest of the lot. Thus if one wants to play on the road BOT story in India there are better option available in the market. Again the core construction business of the company is limited to construction of buildings and power substations and thus lacks diversification. The issue is priced at 17.1x and 18.7x FY10 earnings at the lower and higher band of Rs 297 and 324, respectively. We believe the issue is aggressively priced considering the concentrated order book and operational lane history of the company. Hence, we recommend you to "AVOID" the IPO

today it was last day for QIB in tecpro , that's y we r seeing good subscription in it.....

otherwise if u compare other category , HNI , RII , EMPLOYEE usme ashoka already has better subscription than tecpro..... so , don't go by QIB subscription..... ashoka will also hve 30+ QIB subscription tomorrow.....

i personally going to apply in which there will be less subscription & better chances of allotment.....

AND IF IT IS AT PREMIUM I DO NOT MIND PAYING FOR BETTER RATING 4

Boarders, was today last day of QIB ??

Company has got itself good anchor investors like top ranking funds like DSP BlackRock Micro Cap Fund, DSP BlackRock Small & Midcap Fund, AIG, Axis Mutual Fund, JM Financial MF etc.