Dhruv Consultancy Services IPO comprises 42,96,000 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 54 per equity share. The company conducts traffic surveys, engineering surveys, undertakes Project Management Consultancy, Consultancy works of PPP Projects and Tolls. The Shares shall be listed on BSE SME Platform.
Dhruv Consultancy Services: IPO Details
|Issue Period||27 April – 2 May 2018|
|Issue Size||42,96,200 shares (INR 23.2 crore)|
|Issue Type||Fresh Issue of Equity|
|Issue Price||INR 54 per share|
|Face Value||Rs. 10 per Share|
|Minimum Lot||2,000 shares|
|Book Running Lead Managers||HEM SECURITIES LTD|
|Listing||BSE SME platform|
|Name of the Registrar||LINK INTIME|
About Dhruv Consultancy Services
- Dhruv Consultancy Services an infrastructure consultancy company providing design, engineering, procurement, construction and integrated project management services for Highways, Bridges, Tunnels, Architectural, Environmental Engineering and Ports. Our services includes Preparation of DPR and feasibility studies for infrastructure projects, Operations & Maintenance Works, Project Management Consultancy Services, Independent Consultancy, Project Planning, Designing, Estimation, Traffic and Transportation Engineering, Financial Analysis, Technical audits, Structural Audit, Inspection of bridges and Techno Legal Services.
- Dhruv Consultancy Services clientele include Ministry of Road Transport and Highways, National Highways Authority of India, The City and Industrial Development Corporation of Maharashtra Ltd., Jawaharlal Nehru Port Trust, Maharashtra State Road Development Corporation, Mumbai Metropolitan Region Development Authority, Public Works Department, Maharashtra Tourism etc.
- Dhruv Consultancy Services was incorporated in 2003 and have over the years developed a track record of working for majority of projects with government bodies and public sector undertakings. As of December 31, 2017, its has provided a range of consultancy services on 41 projects in the area of Highways, Bridges, Tunnels, Architectural, Environmental Engineering and Ports.
- The company has a qualified and professional employee base of over 313 employees, including 240 Engineers as on December 31, 2017.
- Companies Order Book as of December 31, 2017 stood at 131 Crores.
- The breakup of company’s consultancy income is provided below:
(Rs. in Lakhs) Division FY14 FY15 FY16 FY17 Highways 902.61 938.5 1063.99 2379.47 Bridges – – 443.26 598.25 Tunnels – – – 5.1 Architectural – 4.38 1.72 2.13 Environmental Engg – 2.63 2.58 1.7 Ports – – – 57.43 Total 902.61 945.51 1511.54 3044.08
Dhruv Consultancy Services: Financials
|(Rs. In Lakhs)|
|Revenue From Operations||3,348.26||3,044.08||1,511.54||945.51||902.61|
|Depreciation and amortization||72.82||85.68||34.88||29.77||6.69|
|Profit before tax||740.9||494.6||228.29||134.56||170.61|
|Profit before tax||740.9||494.6||228.29||134.56||170.61|
|Profit After Tax||540.11||308.16||132.21||78.97||112.67|
|Net Profit Margin %||16.13%||10.12%||8.75%||8.35%||12.48%|
|Reserves & Surplus||1,308.57||830.46||522.3||390.09||311.12|
|Post Issue Equity||1430|
|EPS Post Issue ( annulized)||5.04|
|PE – (annuallized)||10.72|
|CAGR Sales 3 Yrs||49.96%|
|CAGR Net Profit 3 Yrs||39.85%|
|Market cap / Sales||2.54|
Dhruv Consultancy Services IPO: Issue Objectives
- Repayment/ prepayment of certain indebtedness.
- To Meet Working Capital requirements.
- General Corporate Expenses.
- Issue Expenses.
Dhruv Consultancy Services IPO: Pros
- Dhruv Consultancy Services total revenue and net profit have shown healthy CAGR in last five Financial Years. Its total revenue has increased from Rs. 510.85 lakhs for Fiscal 2013 to Rs. 3046.24 lakhs for Fiscal 2017, at a CAGR of 56.27%. Its net profit has increased from Rs. 34.52 lakhs for Fiscal 2013 to Rs. 308.16 lakhs for Fiscal 2017, at a CAGR of 72.85%.
- Company has good orders on hand.
- Dhruv Consultancy Services is a pan India company having its presence in 10 states in India namely Maharashtra, Gujarat, Himachal Pradesh, Chattisgarh, Karnataka, Delhi, Goa, Rajasthan, Haryana and Tamil Nadu.
- To enhance its competitive edge , the company has entered into MOU with various companies
- MoU with HSS Engineering Sdn Bhd
- MoU with Consistent Engineering Consultants, Dubai.
- MoU with IRClass Systems & Services Pvt. Ltd.
- The company has its presence in following areas:
- Pre Tendering Services (Survey and Investigations, Estimating and Costing, Traffic Study and Analysis, Feasibility Study, Detailed Project Report)
- Post Tendering Activities (Project Management Consultancy in areas of Supervision of works, Billing and Quality Control, Contract Management, Monitoring Operation & Maintenance works
- Advisory Services: Financial Engineering, Techno Legal Services, Lenders Engineering Services, Technical Audits, Structural Audits, Bridge Inspection.
- Design: Preliminary Design of Highways & Bridges, Detailed Design of Highways. Proof Checking of Designs of Highways, Detailed Design of Bridges
Dhruv Consultancy Services IPO: Cons
- Dhruv Consultancy Services has high Trade receivables. For the financial years 2017 and 2016, its trade receivables were Rs. 1481.88 lakhs and Rs. 913.23 lakhs, respectively, which constituted 48.65% and 60.12% respectively of its total revenue from operations for the same periods.
- Company has not paid any dividends in the past.
- Dhruv Consultancy Services used most of its reserves to issue bonus shares.
Softtech Engineers IPO: Assessment
- Consultancy services are emerging as one of the fastest growing service segments in India A large number of consultancy firms and individual consultants are operating in India at various levels across the sectors.
- Demand for company’s services is largely dependent on the level of investments and the Government’s spending on infrastructure projects in India. Current emphasis of the Government on this sector bodes well for the Government
- After the IPO, Promoters stake in the company shall stand at 69.94 %.
- The stock is being offered at a PE of around 10 based on annualized 9 month FY 17-182 earnings and on a fully diluted equity after the IPO. This looks reasonable.
- I intend to apply in Dhruv Consultancy Services IPO ( see next para) as the issue is reasonably priced , company has good profitability metrics and has shown good compounded growth rate in Revenues and Profits.
- Cancelled my application in Dhruv Consultancy Services (BSE SME IPO) as subscription not picked up yet. Also No grey market activity reported.
- This is an SME issue that shall be listed on BSE SME platform and compared to issues that list on BSE/NSE, such issues carry more risk.