Ircon International settles 13% below its issue price on debut

The stock settled at Rs 412.95, 13% below its issue price of Rs 475 per share on the NSE.

Shares of engineering and construction firm Ircon International settled weak on its debut on Friday.

The stock got listed at Rs 412,  13 per cent below its issue price of Rs 475 per share on the National Stock Exchange (NSE). It settled at Rs 412.95.

The stock hit a high of Rs 465 and a low of Rs 409 on the NSE in intra-day trade today.

The company offered a discount of Rs 10 per equity share on the offer price to retail individual bidders and eligible employees bidding.

Ircon International had raised Rs 4.7 billion through initial public offer (IPO). The issue ran between September 17 and 19 and was subscribed nearly 10 times.

The support to the issue has been largely from qualified institutional buyers (QIBs) and retail investors, whose reserved portion subscribed by 12.29 times and 10.07 times followed by non-institutional investors (4.92 times).

Ircon is the second railway PSU to be listed on the stock markets after RITES in June this year. Ircon International is a state-owned engineering and construction company, specialising in major infrastructure projects, including, railways, highways, bridges, flyovers, tunnels, aircraft maintenance hangars, runways, EHV sub-stations, electrical and mechanical works, commercial and residential properties, development of industrial areas, and other infrastructure activities.

“On valuation front, at higher price band, the company is demanding a P/E valuation of 10.9x (to its restated FY18 EPS of Rs. 43.8). Moreover, based on FY19 and FY20 earnings, the forward P/E comes out to 9.9x and 8.4x, respectively. Thus issue seems to be attractively priced considering its strategic importance in the Indian Railway, future growth outlook, limited competition, virtually debt free operations and healthy financial performance,” Choice Broking had said in an IPO note.