ARSS Infrastructure Projects Limited, a city-based infrastructure firm engaged in the construction of roads, bridges, highways, bridges and railway projects, expects to raise Rs 103 crore through its initial public offer (IPO).
The company's IPO opens on February 8 and closes on February 11. The price band has been fixed at Rs 410-450 per equity share.
The floor price is 41 times higher than the face value of the share (Rs 10) and the cap price is 45 times of the face value.
ARSS intends to use the proceeds of the issue for investments to float joint ventures and also to meet its working capital requirements.
The company proposes to use Rs five crore out of the proceeds of the IPO for investments into forming joint ventures. A part of the money raised through the IPO would also be used to fund future projects.
ARSS has assessed its working capital requirement at Rs 401.86 crore for 2009-10 and the company believes that to ensure timely execution and completion of the orders procured, it would be necessary to supplement its existing working capital requirement.
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Of Rs 103 crore raised through the IPO, ARSS would use Rs 86 crore to meet its working capital requirement.
Asked if ARSS was planning to foray into new verticals, Subhash Agarwal, chairman, ARSS Infrastructure Projects Ltd said, “Presently, we are focused mostly on building roads and highways and executing railway projects. We have no plan to enter into any new line of business. Our order book position stands at Rs 2800 crore (as on January 2010) and it will take us two year to execute these projects.”
Together, roads, highways and railways verticals account for 80 per cent of the company's revenue.
Post issue, the shareholding of the promoters in ARSS Infrastructure will come down to 55.24 per cent from the existing 65 per cent.
With a presence in 14 states, ARSS has executed 86 projects so far which includes around 300 km of highways and 200 km of railway network.
IDBI Capital Market Services Ltd and SBI Capital Markets Ltd are the book running lead managers to the public issue.