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Ongoing ‪IPO: Dilip Buildcon Limited

Ongoing ‪IPO: Dilip Buildcon Limited

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IPO Dilip Buildcon

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Company & Business Profile

Dilip Buildcon Ltd. is one of the leading private sector road-focused EPC contractors in India. The business comprises of (i) construction business, under which company undertakes roads, irrigation and urban development projects on an EPC basis; and (ii) infrastructure development business, under which company undertakes building, operation and development of road projects on a BOT basis with a focus on annuity projects.

In road construction business, company mainly designs, constructs and maintains roads and highways on an EPC basis with third party and EPC Contracts are awarded to the company through subsidiary companies and joint ventures.

In irrigation business, company undertakes to build canals and dams. Company entered into this business in FY14 to take advantage of the increasing opportunities in this area.

In urban development business, company undertakes redevelopment and re-densification of government housing and builds residential units under affordable housing schemes and other structures in group water supply schemes relating to irrigation or water supply for agricultural purposes. Company entered into this business in FY13.

In infrastructure development business, company develops and maintains roads and highways on a BOT basis. Presently company undertakes BOT projects opportunistically, considering factors such as their proximity to clusters where company is executing other projects to maximize efficiency of execution and profitability, and the potential cash flow from such projects after they become operational.

Objects of the Issue

The public issue comprises a fresh Issue and an offer for sale by the selling shareholders. Company will not receive any proceeds from the Offer for Sale. The proceeds from the fresh issue will be utilized towards the following:

  • Prepayment or scheduled repayment of a portion of term loans availed by the company;
  • To meet working capital requirements; and
  • General corporate purposes.

Investment Positives

  • Company operates through ownership model vs. rental model for executing its projects which has led to higher margins for the company.
  • Company has tried to keep its time to execute projects well ahead of the scheduled, winning them bonuses and lower completion costs.
  • Company owns one of the largest equipment banks in the country totalling 7,345 vehicles.
  • With best in the class equipment, the average life of their assets is 8-10 years as against 3-4 years of the other players.
  • There has been strong revenue visibility. Revenue for the company grew at a CAGR of 38% on consolidated basis.

For IPO note, read http://bit.ly/2astQHH, to apply call us at 0731-4217261.

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