MBL Infra Projects

Successful Projects executed by the MBL Infrastructures Limited team

MBL Infrastructures Limited has successfully executed small to medium size construction projects mainly in the road segment. Over the years, the company has moved from doing smaller projects involving short-term improvement and maintenance works to larger projects involving widening and strengthening of existing State and National highways.

In FY 2007-08, the company successfully completed the construction of the 114 Kms Seoni-Balaghat-Rajegaon BOT project. The company has over the years, demonstrated its abilityto execute projects without any significant time and cost overruns, which has resulted in the company building a favourable reputation among its clients. The company has executed projects for Government agencies and bodies like Madhya Pradesh Road Development Corporation (MPRDC), Mumbai Metropolitan Region Development Authority (MMRDA), National Highways Authority of India (NHAI) andUttar Pradesh Public Works Department.

BOT Project completed in FY 2007-08

In 2002, MBL was awarded the project for reconstruction, strengthening, widening and rehabilitation of 114Kms section of the Seoni-Balaghat road by MPRDC on a BOT basis. In accordance with the terms of theconcession agreement, a special purpose vehicle (AAP Infrastructures Limited – 100% subsidiary of MBL) was formed for the execution of the project. As per the concession agreement, the company would receive a grant from MPRDC for funding part of the project cost and be allowed to collect toll from users of the road for a period of 15 years (the toll rated would be escalated by 7% every year). The company completed the construction of the toll road in February 2008 at a total cost of Rs. 1.08 billion which was funded by equity of Rs. 0.12 billion, grant from MPRDC of Rs. 0.35 billion, term loans of Rs. 0.22 billion and balance from MBL in the form of unsecured loans and creditors for project development.

For FY 2008-09, AAP Infrastructures Limited (AAP) reported revenues of Rs. 78.02 million from toll collections and Profit AfterTax of Rs. 0.19 million. Going forward, ICRA expects the revenues and profits of the company to increase on the back of the expected growth in traffic and escalation in toll rates.

Healthy growth in order book buoyed by growth in infrastructure sector

The order book of the company has witnessed healthy growth over the past two years buoyed by th eoverall growth in the infrastructure sector. The company’s current order book stands at Rs. 7.62 billion which is around 2.14 times the turnover of the company from its construction business in FY 2009. Given the opportunities in the road segment and the buoyancy in the construction industry, ICRA expects MBL’s order book to remain healthy in the medium term, which is expected to provide for growth in the company’srevenues and profits.

MBL Infrastructures IPO Details

MBL Infrastructures Limited proposes to come out with an Initial Public Offer (IPO) of 5.70 million equity shares of face value of Rs. 10 each through the book building route. Subsequent to employee reservation of 0.10 million equity shares, the net issue to public will be 5.60 million equity shares. Of the net issue, atleast 50% would be reserved for Qualified Institutional Buyers (QIBs), not less than 15% of the net issue shall be reserved for non-institutional investors and not less than 35% of the net issue shall be reserved for retail investors. Post-IPO, the shares will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)

The IPO proceeds are proposed to be used primarily for -
* Investment in Capital equipments
* Fund working capital requirements
* Fund general corporate expenditure

Entity Profile

Incorporated as Maheshwari Brother Limited in 1995, the name of the company was changed to the current MBL Infrastructures Limited in July 2006. Initially, MBL was engaged in the business of recycling ferrous scrap and slag at steel plants and in steel trading, but subsequently diversified into infrastructure development (primarily road projects), serving Government clients like the Public Works Department and the National Highways Authority of India. In 2007-08, MBL successfully completed the execution of the 114km Seoni-Balaghat-Rajegaon BOT project (for its 100% subsidiary AAP Infrastructures Limited). On a consolidated basis, MBL reported revenues of Rs. 5.14 billion and a Profit after Tax of Rs. 274.03 million in2008-09. The company’s current order book stands at Rs. 7.62 billion

Promoters and Management

The company was promoted by Mr. R.G. Maheshwari and his brother Mr. A.K. Lakhotia and their families who along with other promoter group companies have 100% shareholding in the company. Post the IPO, the shareholding of the promoters and promoter group will come down to 67.55%

ICRA Grading of MBL Infra IPO

ICRA has assigned an IPO Grade 2 to the proposed IPO of MBL Infrastructures Limited (MBL), indicating below average fundamentals. ICRA assigns IPO gradings on a scale of IPO Grade 5 to IPO Grade 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.

An ICRA IPO Grade is a symbolic representation of ICRA’s currentassessment of the fundamentals of the issuer concerned. The fundamental factors assessed include inter alia, business and competitive position, financial position and prospects, management quality, corporate governance, and history of compliance and litigation.

MBL Infrastructures Ltd IPO – ICRA Ratings

The proposed IPO of MBL Infrastructures Limited has been assigned an IPO Grade 2 by ICRA. MBL Infrastructures Ltd, the Kolkata-based comapny has proposed a public issue of 57 lakh shares of face value Rs. 10 each through the Book Building Route. Motilal Oswal is the lead manager to the issue and has filed the offer document with respect to the issue with SEBI.

The basis for the same has been MBL Infrastructure Limited’s performance, strength and weaknesses when compared with leading companies in the sector. We will provide more information about this upcoming IPO very soon. Keep watching this space!

MBL Infra IPO

MBL Infrastructure is soon launching their IPO in the pipeline.

Please lookup their website  MBL Infrastructure for more info.

Keep watching this space for updates

The Company is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a public issue of its equity shares and the Company has filed a Draft Red Herring Prospectus with the Securities and Exchange Board of India (“SEBI”). The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and the website of the BRLM i.e. Motilal Oswal Investment Advisors Private Limited at www.motilaloswal.com. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled “Risk Factors” of the aforementioned offer document.