ARSS Infrastructure IPO by month-end

ARSS Infrastructure Projects Ltd, a Orissa based infrastructure company, plans to go to the capital market with an Initial Public Offer (IPO) to raise about Rs 120 crore by this month end.

The money to be raised from the issue will be used for purchase of machineries and meeting the working capital requirement of the company, which is currently engaged in implementing road and rail projects worth Rs 3,000 crore across 14 states of the country.

The company filed the Red Herring Prospectus (RHP) with the Securities and Exchange Board of India (SEBI) on 31 July 2009 and the issue is expected to hit the market in the last week of this month.

Sources said, the shares with the face value of Rs 10 each will be issued to the public in a price band of Rs 380 to 400, which is based on the book value of the shares.

The company plans to off load about 18 to 20 percent equity through this public offer. Post-issue the promoters’ stake in the company will be diluted to about 60 per cent.

It may be noted the State Bank of India (SBI) had earlier picked up 7.79 percent equity in the company through a private equity (PE) deal and another 10 per cent shares are held by the public. Besides, private corporate bodies currently hold 16.6 per cent stake in the company.

While the total paid-up capital of the company is about Rs 12 crore at present, this will increase to Rs 15 crore post-offer. SBI Capital and IDBI capital have been appointed as the lead managers for the public issueARSS Infrastructure Projects, executing road and rail projects in states like Tamil Nadu, Rajasthan, Haryana, Andhra Pradesh, Chhatishgarh, West Bengal, Jharkhand, Orissa and Maharastra, made a net profit of Rs 50.08 crore on a turnover of Rs 650 crore in the last fiscal.

It is executing the Rs 300 crore Bus Rapid Transport System (BRTS) project of Rajasthan government and Rs 200 crore irrigation project of Haryana government on river Kausalya among others.

The company along with its Indonesian firm PT Adhikarya, is implementing 3 major rail projects in Orissa which include Cuttack -Barang (second line), Barang-Khurdha (third line) and Barang-RajaAthagarh (second line) at an estimated cost of about Rs.420 crore. These projects are targeted to be completed by March 2010. It has also bagged the contract for some World Bank assisted road projects in the state. These include Chandbali-Anandapur via Bhadrakh, Berhampur-Taptapani and Bhawanipatna-Khariar road.