IPO Update: Karda Constructions fixes price band at Rs. 175-180 per share

Nashik-based real estate company Karda Constructions (KCL) is entering the capital market with the Initial Public Offering (IPO) of 43 lakh equity shares out of which the fresh issue will be of 23 lakhs of equity shares and offer for sale for 20 lakh shares. The issue will open in the bourses on March 16. The IPO will close on March 21 and the price band has been kept at Rs. 175 to 180 per equity share.

The main objectives of the company is to come up with an IPO is to fund company’s existing activities part repayment of overdraft facilities, part repayment of term loans, general corporate purposes and to support issue related expenses.

THe company has availed overdraft facilities from different banks and has currently an outstanding amount of approximately Rs. 25 crores. According to management Rs. 23 crores will be used for part repayment of company’s current overdraft facilities and Rs. 7 crores for part repayment of a term loan. This will help the company to improve its debt-equity ratio.

Karda Construction has exhibited good financial performance in last few years. Its topline has increased at a CAGR of 36 per cent between FY14-17 and total income for FY17 was at Rs 110 crore. Profit after tax in the same time recorded a CAGR of 30.6 per cent. KCL during the year 2017 recorded EPS of Rs 8.03. Based on the upper price band of Rs. 180 and post equity issue, the issue is available at PE of 25.3. It is in line with other listed players.