This post on Rail Vikas Nigam tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , subscription, Grey Market Premium (GMP). The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Rail Vikas Nigam IPO or not.
Related Post: Rail Vikas Nigam IPO
Rail Vikas Nigam IPO: Grey Market Premium etc.
02/04/19 Grey Market Premium : Rs 1-1.50 (minimum activity)
Kostak Rs. 250 in scattered deals.
Subscription: Rail Vikas Nigam IPO ( x times)
Consolidated Brokerages Views on Rail Vikas Nigam IPO
Angel Broking: ” In terms of valuations, PE works out to 7x FY18 EPS of `2.77 (at the upper end of the issue price band), which is reasonably priced considering (a) healthy order book with near and long term execution visibility, (b) highly capable and experienced management coupled with asset light business model, (c) healthy dividend payout ratio around 30% in last three years, (d) diversified revenue segment, and (e) increasing revenue opportunity from railways due to new investment in electrification and infrastructure. Given that RVNL is an executing agency of MoR, we believe it is in a sweet spot to tap the upcoming opportunities in Indian Railways. On the basis of the above arguments, we recommend SUBSCRIBE to issue. “
BP Wealth: ” It has long operating history with strong record of timely execution of projects and that has helped company to gain revenue growth of around 25% CAGR for FY15-18. On the valuation front, at a upper price band the company’s P/E multiple stood at 7.8X to annualized H1FY19 EPS which we believe is reasonably priced. Thus owing to above reasons, we recommend a ‘SUBSCRIBE’ rating for the IPO. “
Capital Market: ” Score 45/100, RVN is more of a project execution agency of MoR whose job is to monitor and ensure the execution. With 96.1% of orders from MoR on a nomination basis, the company acts as a nodal agency with fixed margins. It subcontracts and outsources the orders from MoR to various companies including Rites and Ircon. Considering the comparative business models of Rites, Ircon and RVN, RVN should get lower P/E and the offer price factors in that.
Choice Broking: ” Based on the higher price band, RVNL is demanding a P/E multiple of 7x (to its restated FY18 EPS of Rs 2.7), a discount to peer average of 11.9x. With respect to the projected FY19E and FY20E earnings, it is demanding a P/E valuation of 6x and 4.4x, respectively. Valuation seems attractive and investors can look for long-term investment in this PSU “
Centrum: ” Company could be a key beneficiary of the upcoming opportunities in the railway infrastructure segment. The brokerage suggests investors ‘subscribe’ to the issue from a long-term perspective. “
ICICI Direct: At the IPO price band of Rs 17-19, the stock is available at a price to earnings multiple of 7x while comparable peers are trading at an average multiple of 6.6-12.7x. The company has a robust balance sheet and is available at an attractive dividend yield of around 4 percent. Backed by a solid order backlog and strong execution capabilities, we recommend subscribe to the issue at the offer price.”
SMC : “ Rating 2.5/5. The revenue of the company has shown good improvement in the last 4 years. This is a direct function of improved investments in the railway segment. The railway segment is poised to see growth due to ongoing and the expansion plan. On the pricing front, it is reasonably priced. Long term investors may opt the issue. “
SP Tulsiyan website: ” Since negatives out-number positives, the IPO can be given a miss. “
Ventura Securities: ” The valuation on a trailing basis works out to 7.0x P/E FY18 . Subscribe”