Sunday, January 31, 2010

Good news! Vascon Engineers' IPO subscribed 1.12 times on final day!!

As per the news in Business Standard, the Initial Public Offer (IPO) of Vascon Engineering, opened on January 27, was subscribed 1.12 times on the final day of the offer, on January 29, 2010.

Vascon Engineers, an engineering, procurement and construction (EPC) services and real estate development company in Pune, received mild response from investors. Considering that in a week when the stock markets were falling, all primary market investors were preserving their money for mega public sector company issues coming in the next few weeks, and all other 3 smaller issues opened along with the Rs 200 crore Vascon IPO were facing rough times and finding it difficult to get investors, Vascon, indeed, did considerably well!

Non-institutional investors and qualified institutional investors supported the issue; their reserved portion subscribed 3.65 times and 1.12 times, respectively. However, retail investors' portion got subscribed just 0.62 times.

Invest in Vascon with long term view:

Moral of the story is, for various reasons even if you haven't subscribed to IPO, down the line, you should invest in Vascon Engineers with long term view at a right price point. Because, unanimously all have appreciated Vascon as an engineering, procurement and construction (EPC) services providing company.

For example, Indiabulls Securities Research report says that Vascon has strong execution capabilities, a robust order book, and with recovery in real estate sector Vascon's margins will improve.

In his review of Vascon IPO, Jitendra Kumar Gupta, complained in Business Standard that the offer price of Rs 165-185 per share was leaving limited room for appreciation. But at the same time, Mr. Gupta recommended that investors may apply at the lower price-band. Now, it means, should invest in Vascon at a lower price!

Calling Vascon IPO as Pricey Issue, Supriya Verma Mishra in The Economic Times said that long term investors are advised to invest post listing!

Vidya Bala of The Hindu Business Line also found offer price of Vascon IPO very steep. However, though Vidya recommended that investors should avoid the initial public offer of Vascon Engineers, Vidya Bala said:
Scaling up of real-estate revenues, winning of significant contracts from external clients or a steep correction in the stock price linked to broader markets can be reasons to take a re-look at this recommendation.

Vascon Engineers' engineering, procurement and construction (EPC) projects:

Vascon has 24 years of experience in providing EPC services, which includes, constructing factories, hospitals, hospitality properties, office and residential complexes, shopping malls, multiplexes, IT parks and other buildings.

Vascon provides EPC services for its own projects as well as to third parties. Its third party EPC clients include well-known Indian and multinational companies.

As of December 31, 2009, Vascon had completed an aggregate of 181 EPC contracts, with a total contract value of Rs. 8,888.70 million.

As of December 31, 2009, Vascon was engaged in 70 ongoing and forthcoming EPC contracts, with an estimated total contract value of Rs. 40,141.11 million.

Vascon Nucleus Mall, Camp, Pune:
I am sure, you must have seen some of Vascon's well known EPC projects in Pune, which have already become landmarks. Like Nucleus Mall in Camp and Suzlon Corporate Campus at Hadapsar.

Suzlon Corporate Campus, Hadapsar Pune:
(Click to Enlarge)

HDIL’s Rs. 2000 million contract to design and construct it's upcoming commercial complex in Kurla, Rs. 2485 million contract of constructing Multilevel Car Park for Delhi International Airport, construction of high-rise Ruby Mills, at Dadar in Mumbai, are some of Vascon's ongoing EPC projects.

Point is, though IPO is over, you can invest in Vascon's shares and / or Vascon's properties at Baner Balewadi and Kharadi!

Ruby Mills, Dadar Mumbai:
(Click to Enrage)

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