481.25
1.51%
HDFC Securities
Issue Open: August 01 - August 03 2016, Price Band: Rs. 214 - 219.


Dilip Buildcon ltd (DBL) is one of the leading private sector road-focused EPC contractors in India.
CAGR of 38.18% of revenue growth on a consolidated basis for the five Financial Years ended March 31, 2016.
As of March 31, 2016, DBL had an order book of Rs 107,787.31 million, consisting of 50 third party road EPC projects, six of its own road BOT projects, three irrigation projects, one mining project, one cable-stayed bridge project and three urban development projects.


Objects of Issue:

The Issue comprises a Fresh Issue by DBL and an Offer for Sale by the Selling Shareholders. DBL will not receive any proceeds from the Offer for Sale. The objects of the Net Proceeds of the Fresh Issue are:


Prepayment or scheduled repayment of a portion of term loans availed by DBL.
To meet working capital requirements, and 
General corporate purposes.


Competitive Strengths:


One of the Leading Road-focused EPC Contractor
Geographical clustering of projects:
Focus on equipment ownership
Backward integration or in-house production
Excellent execution track record through strong operating systems and controls
Strong financial performance and credit profile
Visible growth through a robust order book and excellent pre-qualification credentials
Experienced management and promoters


Key Concerns:


There are outstanding legal proceedings against the Company
Projects included in order book and future projects may be delayed, modified or cancelled for reasons beyond control
If DBL is not successful in managing growth, its business may be disrupted and profitability may be reduced
Lower than expected returns on investment in BOT projects may adversely affect the financial results
In the past, DBL has incurred additional costs in order to complete some of the projects
DBL’s projects are exposed to various implementation and other risks and uncertainties
DBL has substantial existing debt and may incur substantial additional debt, which could adversely affect financial health and its ability to obtain financing in the future
Business is capital intensive
Owns a large fleet of equipment and have a large number of employees, resulting in increased fixed costs to the Company
Delays in the acquisition of private land or rights of way, eviction of encroachments from government owned land by the Government or resolution of associated land issues may adversely affect the timely performance of the contracts and lead to disputes and losses
Dilip Buildcon Ltd. is trading below its 30 day SMA of 493.2
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