CRISIL assigns average IPO grade to Man Infraconstruction

Crisil has assigned a CRISIL IPO Grade `3/5` to the proposed initial public offer (IPO) of Man Infraconstruction (Man Infra). This grade indicates that the IPO`s fundamentals are average, relative to the other listed equity securities in India.
The IPO grade assigned to Man Infra reflects that the company is well positioned in contracting services in the ports sector and in the real estate contracting business in Mumbai. The grading takes into account the expected buoyant supply in the Mumbai residential market (driven by pickup in demand) and significant investments likely in the ports sector, given the current high utilisation rates, expected increase in traffic and the need to improve efficiency. The grading also takes into consideration the company’s strong order book position of about Rs 14.2 billion, which provides it with sufficient revenue visibility.

The grading also factors in high operating margins, low gearing and the company’s strong balance sheet. Man Infra`s promoter, Parag Shah also has a strong background and experience in the construction sector. The company also has a fairly experienced management.