MAN INFRACONSTRUCTION LTD

MAN INFRACONSTRUCTION LTD

[2010]

MAN INFRACONSTRUCTION LTD – IPO Note

]

Issue Details Sector Infrastructure

Issue Details

Issue Size 56,25,150

ERO 2,25,150

Net Issue 54,00,000

Face

Value

Rs.10

Book Running Lead Managers

IDFC SSKI

Edelweiss Cap

Registrar to the Issue

LINK INTIME

Promoters

Mr. Parag Shah

Mrs. Mansi Shah

Company Address

12th

Floor, Krushal Commercial

Complex, G.M.Road,

Chembur (W), MUMBAI

Web add www.maninfra.com

Man Infraconstruction Limited – is an infrastructure construction

company headquartered in Mumbai. Man Infra has undertaken

projects in six States viz. Maharashtra, Kerala, Gujarat, West Bengal,

Goa and Tamil Nadu. Man Infra provides construction services for port

infrastructure, residential, industrial and commercial and road

infrastructure projects.

Man has been awarded an ISO 9001:2008 certification in July 2009 by

SGS United Kingdom Limited Systems and Services certification. Man

Infra currently has two PE investors SA (I) Holdings Infrastructure

Company Private Limited (Formerly -Sabre Abraaj Capital Private

Limited) and Standard Chartered Private Equity (Mauritius) Limited

having stakes of 9.2% & 6.9% respectively.

ABOUT THE ISSUE: SIZE & PURPOSE

The Company proposing an Initial Public Offering of 5,625,150 Equity

Shares of Face Value Rs. 10/- each in a price band which is still to be

announced. The Authorized Share Capital and Issued Share Capital of

the company is Rs. 63, 00, 00,000 and Rs. 43, 87, 48,500 respectively.

From the said issue Man Infra has reserved 225,150 Equity Shares of

Rs. 10/- each for subscription by employees at the issue price.

Man Infra is planning to raise about Rs 150-160 Crores from the IPO, of

which, Rs 122, 53, 00,000 is expected to be used to purchase capital

equipments, while the balance would be used for general corporate

purposes. CRISIL (RATING AGENCY) has given an IPO rating of 3/5 to

the issue suggesting average fundamentals for the company.

“ARHAM” Financial Centre

Harihar Chowk, RAJKOT (Guj)

Speak to: 0281 – 6699401

Drop a line to: research@anspl.net

ANS IPO Desk 09th February, 2010

MAN INFRACONSTRUCTION LTD IPO Note

BUSINESS COMMUNITY

The Company is having excellent and well experienced people on

its Board of Directors. A brief description about the entire team

is given below;

Personal Designation Remarks

1 Mr. Parag Shah Managing

Director

Has a Bachelor’s Degree in Commerce.

Has 19 Years of Experience in

Construction Industry

2 Mr. Suketu Shah Executive

Director

Has a licentiate in Civil & Sanitary

Engineering. Has 18 Years of

experience on working in Port

Infrastructure projects, residential,

industrial & commercial projects

3 Mr.Pramod

Chaudhari

Non Executive

Chairman &

Independent

Director

Has a Bachelor’s Degree in Mechanical

Engineering from IIT Mumbai.

Established Praj Industries Ltd.

Currently he is the Executive Chairman

of Praj Industries. Has over 37 Years of

experience.

4 Kamlesh S.

Vikamsey

Independent

Director

Has a Bachelor’s Degree in Commerce.

Is a qualified Chartered Accountant

since 1982. Has over 27 years of

experience in accounting & finance,

taxation, corporate & advisory service.

Is a senior partner at M/s Khimji

Kunverji & Co. since 1982.

5 Rajiv Maliwal Investor

Director

(Nominee of

SA (I) Holdings

Infrastructure

Company Pvt.

Ltd.(Formerly -

Sabre Abraaj

Capital Private

Ltd.)

Has a B.E. degree from BITS Pilani and

a P.G. diploma in Business

Administration from IIM Bangalore. He

is the co-founder and M.D. of Sabre

Capital. Has 24 years of experience in

managing large businesses in financial

services industry.

6 Rahul Raisurana Investor

Director

(Nominee of

Standard

Chartered

Private Equity

(Mauritius)

Limited

Has a Masters degree in International

Management from Thunderbird

School of Global Management, U.S.A.

and a Masters degree in Business

Administration. Has 18 years of

experience in various fields. Has also

worked at IDFC Project Equity

Company Ltd., Deutsche Bank,

Moody’s Investor Services & Citibank.

7 Sivaramakrishnan

S. Iyer

Independent

Director

Has a Bachelor’s Degree in Commerce

and is a qualified Chartered

Accountant from ICAI since 1987. He is

a partner of Patel, Rajeev, Siva &

Associates since 1988.

8 Dharmesh Shah Independent

Director

Has B.E. (Mechanical) Degree. Is a

member of Institution of Mechanical

Engineers since 1991 & a Fellow of

Institution of Values since 1997. Has

over 24 Years of experience as an

Insurance Surveyor & Loss Assessor.

BUSINESS SUMMARY

MAN INFRACONSTRUCTION LTD is currently engaged in Construction 1) of Port, Container Freight Stations

(CFS) 2) Township & Residential Buildings 3) Commercial & Industrial Buildings and 4) Project Management

Consultancy. These core competencies of the company get fully reflected in the projects carried out by it

(both in the Past and at Present), a list of which we have given below:

1. PORTS, INFRASTRUCTURE & CONTAINER FREIGHT STATIONS (CFS)

Man undertakes turnkey projects for multinational conglomerates. Reclaiming land from the sea to facilitate

construction of berths for ships to dock, building Container Freight Stations, rail network, concrete paving

works, electrical works, sewerage & drainage services, etc are some of the works carried out by it.

Completed Projects

� Nhava Sheva International Container Terminal Ltd (NSICT) (Now

a DP World Group Company) at JNPT, Navi Mumbai

� Chennai Container Terminal (CCT) (Now a DP World Group

Company) at Chennai

� Mundra International Container Terminal (MICT) (Now a DP

World Group Company) at Mundra, Gujarat

� Maersk India Pvt. Ltd. at Dronagiri, Navi Mumbai

Projects in the Pipeline

� International Container Transshipment Terminal at

Vallarpadam, Kerala, Development of Port

� Gujarat Pipavav Ports Ltd. at Pipavav, Gujarat, Customs

Office & Residential complex

� Gateway Terminal India Pvt. Ltd. (GTI) (A.P. Moller –

Terminal and Container Corporation of India Ltd., JV) at

JNPT, Navi Mumbai, Expansion of Terminal yards.

2. TOWNSHIP & RESIDENTIAL

Man Infraconstruction has mastered the art of constructing good quality multi storeyed towers with the help

of imported Aluminium shuttering materials (MIVAN Technology of Malaysia)

Completed Projects

� Mundra Township & Club House – Mundra Projects in the

Pipeline

� Neelkanth Greens, 8 Towers of 28 Storey with podium –

Thane

� Kohinoor City Phase–III, 8 Towers consisting of stilt + 7

Upper floors –Vidhyavihar.

� Orchid wood, 3 Towers – aggregate area of 1.95 million

square feet at Goregaon.

3. COMMERCIAL AND INDUSTRIAL

Man Infra construction is into construction of hotels, clubs, shopping malls, hospitals and schools and IT parks.

From core sector monoliths to heavyweights from the engineering and the service industries, Man

Infraconstruction has carried out all works with singular distinction.

Completed Projects

� Jindal Stainless Steelway Ltd – Patalganga, Navi Mumbai

� Praj Industries Ltd. – Kandla (SEZ)

� Phunde School – NSICT

� G.R. Engineering Private Limited – Mumbai

Projects in the Pipeline

� Gigaplex IT Park, 3 I.T. Parks Buildings with Basement + 8

Storeys – Airoli, Navi Mumbai

� Kohinoor Commercial Complex, Phase II, Tower 3 and 4 –

Mumbai

� Bharti Airtel, Mobile Switching & Data Centre – Nerul, Navi

Mumbai

� Adani Commercial Building, Commercial Building – Bandra

Kurla, Mumbai

4. PROJECT MANAGEMENT CONSULTANCY

Man Infraconstruction is also involved in Project Management Consultancy business. They have executed a landmark project for Praj Industries and are currently involved with the Goan Real Estate and Construction Private Limited Project in Goa for constructing bungalows and Century PlyBoards (I) Limited in Kolkata for constructing Container Freight Stations (CFS).

CLIENTELE

Since inception the company is having a good track record of dealing

with Strong Clientele. Following are some well-known Groups;

(1). Adani Group

(2). Bharti Airtel

(3). DP World (formerly known as P & O Ports)

(4). D.B. Realty Ltd.

(5). Gateway Terminal India Pvt. Ltd. (A.P. Moller Group Company)

(6). Gujarat Pipavav Port Ltd.

(7). Maersk India Private Limited (A.P. Moller Group company)

(8). Praj Industries Ltd.

(9). Simplex Infrastructure Ltd.

(10). Neelkanth Mansions and Infrastructure Limited

(11). Jindal Stainless Steel Limited

(12). Kohinoor Group

UPBEATS-DOWNBEATS ABOUT THE COMPANY

Upbeats

� It is a zero debt company.

� Man Infra’s revenues grew strongly from Rs. 88 Crores

to Rs.236 Crores and then to Rs. 594 Crores from FY

March 07 to March 09 at a CAGR of 159.66%.

� The Board comprises of eight directors, 4 of whom are

independent and 2 are investor directors.

� Man Infra is planning to raise Rs 1,500-1,600 million

from the IPO, of which, Rs 1,225 million is expected to

be used to purchase capital equipments (so the

company is going to add value), while the balance would

be used for general corporate purposes.

� SA (I) Holdings Infrastructure Company Private Limited

(Formerly Sabre Abraaj Capital Private Limited) is the

biggest PE firm in Middle East, North Africa & South

Asia. It has taken PE stakes in Ramky Infrastructure,

Hyderabad and ECI Engineering & Construction (also in

Infrastructure development).

� Man Infra had a consolidated order book of Rs.

20,209.25 million as of December 31, 2009.

� The company has a good track record of execution,

especially in the port business, leading to repeat

business from clients.

Downbeats

� Man Infra has been dependent on few clients only like

DP World Group, D.B. Realty and A.P. Moller Terminal &

Container Corp. India Ltd. However it has recently

acquired new orders from varied set of clients thereby

de-risking itself.

� Highly depends on real estate market with 60% of the

revenue coming from this sector alone.

FINANCIAL PROFILE

Balance Sheet

� The company is a Zero debt company.

� Total Reserves for the company have consistently

increased at an average of 141% in last 4 years.

SOURCE: COMPANY RHP

� The company has comfortable Cash positions.

� Total Assets for the company have increased by an

average of 131% in last 4 years.

� Contingent liabilities have increased mainly because of

‘Liabilities under Bank Guarantees.’

Profit & Loss Statement

� Net Sales for the company have grown at a CAGR of 71%

between FY05 to FY 09.

� Expenditures for the company have historically been at

an average of 77% of Net Sales.

*: THE COMPANY DECLARED BONUS SHARES OF 14,624,950 NUMBERS ON OCT 7, 2009. SO THE EPS

HAS BEEN ADJUSTED FOR THE SAME.

SOURCE: COMPANY RHP

� PAT has increased from 14 Crores in 07 to 83 Crores in

09 showing an increase of 143% in 2 years.

� EPS has also shown substantial increase which indicates

solid performance of the company.

Balance Sheet (Consolidated Results)

(Rs. In Crores) Particulars 2009 2008 2007

Total Funds 270 129 67.5

Total Debts 0 0 0

Cash & Bank Bal 104.89 24.22 24.57

Net Current Assets 186 26 41

Total Assets 270 129 67.5

Contingent Liability 128.81 55.66 28.68

Book Value 62 31 17

Profit & Loss (Consolidated Results) (in Crores)

PARTICULARS 2009 2008 2007

Contract Revenues 585.69 229.75 83.76

Total Other Income 8.59 6.25 4.378

Total Income 594.28 236 88.14

Operating Expenses 409.02 162.66 60.44

Administrative Expenses 32.66 17.39 5.66

Depreciation 15.55 5.63 0.764

Interest 1.88 0.69 0.23

Tax 47.86 15.91 6.60

Diminution In Investment Val. N.A. 1.353 N.A.

Preliminary exp. written off 0.01 0.01 0.005

Share issue exp. written off 0.36 0.319 0.281

PAT after Minority Interest 82.55 31.87 14.15

EPS* 19.43 7.88 4.60

Cash Flow Statement

SOURCE: COMPANY RHP

� As can be seen the company is having a positive cash

flow from its operating activities for last 3 years which

indicates that the company has been successfully

carrying out its operations.

� Company is regularly investing in New Assets. In 2009

Cash flow from investments was positive only because

the company sold investments of Rs. 154 Crores which

was partly negated by the creation of New Assets of Rs.

51 Crores.

� Cash from Financing Activities has increased mainly

because the company has gone for equity dilution for

last 3 years mainly from Private Equity investors.

Peer Comparison

PARTICULARS YEAR Gammon IVRCL Nagar

Const

Simplex Man Infra

Net Sales 2009 3682 4983 4151 4662 585.69

2008 2344 3698 3472 2812 229.75

Expenditure 2009 3344 4568 3777 4319 459.47

2008 2131 3343 3113 2571 188.05

PAT 2009 139 225 153 120 82.55

2008 86 210 161 90 31.87

EPS 2009 15.3 16.93 6.72 24 19.43

2008 9.93 15.77 7.08 18 7.88

Book Value 2009 141 135 73 178 62

2008 112 120 68 147 31

P/E 2009 3.79 7.18 9.21 6.39 N.A.

2008 39.13 25.44 30.10 33.39 N.A.

RoNW (%) 2009 9.7 13.3 9.5 14.6 30.53

SOURCE: COMPANY RHP

Cash Flow (Consolidated Results)

(Rs. In Crores)

PARTICULARS 2009 2008 2007

Cash From Operating Activities 17.80 47.99 6.997

Cash From Investing Activities 8.04 -80.17 -13.23

Cash From Financing Activities 54.82 31.10 20.90

Net Cash Inflow/Outflow 80.67 -1.08 14.67

Opening Cash and Cash Equi. 24.23 24.58 1.34

Closing Cash and Cash Equi. 104.89 24.23 24.58

FINANCIAL PERFORMANCE (DEC 08 vs. DEC 09)

Balance Sheet

SOURCE: COMPANY RHP

Profit & Loss Statement

SOURCE: COMPANY RHP

Cash Flow Statement

SOURCE: COMPANY RHP

Balance Sheet (as on 31 December)

(Rs. In Crores)

Particulars 2009 2008

Fixed Assets 87.97 89.39

Investments 12.10 8.88

C.A., Loans & Advances 407.42 314.02

Liabilities & Provisions 190.32 172.11

Deferred Tax liability/(Asset) -1.95 1.11

Net Worth 319.12 239.08

Profit & Loss (as on 31 December)

(Rs. In Crores)

PARTICULARS 2009 2008

Contract Revenues 370.37 434.85

Total Other Income 11.06 4.95

Total Income 381.43 439.80

Operating Expenses 232.60 305.25

Administrative Expenses 26.48 24.27

Depreciation 13.47 10.85

Interest 2.30 1.21

Tax 35.43 35.40

Diminution In Investment Val. N.A. N.A.

Preliminary exp. written off 0.05 N.A.

Share issue exp. written off 0.290 0.260

PAT 66.44 60.29

Cash Flow (as on 31 December)

(Rs. In Crores)

PARTICULARS 2009 2008

Cash From Operating Activities 40.85 29.20

Cash From Investing Activities -15.18 1.69

Cash From Financing Activities -17.71 46.85

Net Cash Inflow/Outflow 7.95 77.74

Opening Cash and Cash Equivalents 104.89 24.23

Closing Cash and Cash Equivalents 112.84 101.96

PE INVESTMENT BEFORE IPO

Standard Chartered Private Equity (Mauritius) Limited and SA (I)

Holdings Infrastructure Company Private Limited (Formerly Sabre

Abraaj Capital Private Limited) possess 3,030,000 and 4,050,000 shares

respectively of the Company.

A) Standard Chartered Private Equity (Mauritius) Limited (BOUGHT A STAKE IN MARCH - APRIL, 2009)

Standard Chartered Private Equity, the private equity arm of

the bank, typically invests between $10 million and $50 million

per deal. The firm invests across a range of industries, focusing

on mid- to late-stage companies and management buyouts

across a range of industries. It targets businesses based and

operating in Greater China, Korea, Southeast Asia and India.

B) SA (I) Holdings Infrastructure Company Private Limited

(Formerly Sabre Abraaj Capital Private Limited)

Formed between 2002 and 2003, Sabre Abraaj is an equal joint

venture between Mumbai-based Sabre Capital and Middle

Eastern investment firm Abraaj Capital. The firm makes growth

investments in India and its previous deals in the Indian

infrastructure sector include ECI Engineering and Construction

Company, an infrastructure development and construction

company, and Ramky Infrastructure, another integrated

infrastructure development and management company.

RECOMMENDATIONS

We believe that investors should Subscribe the IPO for the long term if

the price band is such that it gives a P/E ratio (for FY 09) of anywhere

between 12 and 15. We believe that the company is in a good position

to capitalize on the opportunity existing in Real Estate as well as

Infrastructure Sector wherein huge spending will be required in coming

years in order to make India an Economic Powerhouse. So keeping this

in mind we recommend “Subscribe” for this IPO with a medium to long

term horizon.

LIKELY IPO PRICES (at March (09) EPS)

P/E PRICE (Rs.)

12 233

15 291

17 330

20 388.6

SOURCE: COMPANY RHP

ANS Research Desk

Research by,

Bhaskar Pranav Mehta

Speak to us: 0281 – 6699401 0281 - 6699401

Drop a Line at: research@anspl.net pranavmehta85@gmail.com

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