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CRISIL has assigned a CRISIL IPO Grade '2/5' to the proposed 62,26,600 equity share initial public offer of Prince Foundations Ltd, which indicates that the fundamentals of the issue are 'below average'.
The issue includes a greenshoe option, and aims to raise Rs 2.5 billion to Rs 2.75 billion.
Prince Foundations has an established presence in the fast-growing Chennai realty market which has seen strong demand growth driven by the diverse industrial base in the city led by the IT/ITeS sector.
Though the company was incorporated as recently as 2004, its promoters have sound experience of more than 20 years in the construction segment in Chennai, and enjoy good relationships with local authorities and customers.
The company has shown healthy growth in turnover and profits in the last three years, thanks to the buoyancy in the sector.
However, Prince Foundations' operations are restricted largely to Chennai which makes it vulnerable to any downturn in the real estate market in the city.
Prince Foundations' earnings prospects in the next few years will be critically dependent on its ability to scale up human resources and systems for the timely execution of projects.
Moreover, the recent sharp increase in property prices in Chennai has adversely affected affordability.
Also, Prince Foundations faces stiff competition, with the entry of larger players in Chennai. Source : economictimes.indiatimes.com |
