Monday, February 18, 2008

KNR Constructions -(Update)

Our Analysis on KNR Constructions posted on 25th Jan:

IPO: KNR Constructions Limited
Issue Period: Jan 24 to Jan 29
Price Range: Rs.170 to Rs.180
Minimum Mkt Lot: 35 shares
Offer Size: Rs.63 crore

Recommendation: Avoid
Grade: Average
Rating: 3 out of 10
Expected Gains on Listing Day (in percentage terms) : N.A.**
Expected Range of Listing Price: N.A.**
Chances of winning Allotment: Strong (in Retail category)
Sector: Infrastructure Sector
Bid for: N.A.Recommendation:


Recommendation:


KNR Constructions Limited is a small sized infrastructure company & mainly competes with domestic players in the road construction & irrigation segments. While service quality, technical capability, past performance record, experience, safety records & availability of skilled personnel are key factors influencing client decisions, price often is deciding factor when it comes to awarding contract. There are a number of competitors having better financials & other resources who have achieved greater market penetration. This may induce the company to accept contracts with lower margins & values if they are unable to compete with other bigger players in the large & high margin contracts. Hence we recommend investors to Avoid subscribing to this IPO.


NSE DATA

Previous CLose - 170.00
CMP- 153
OPEN-210
HIGH-210
LOW-151.30

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