Friday, November 30, 2007

Subscribe to BGR Energy IPO: P-sec

Pranav Securities (P-sec) has come out with report on BGR Energy Systems IPO. The firm has recommended to subscribe the issue.

BGR Energy Systems, a supplier of systems and equipment for the power, oil & gas, refinery, petrochemical and process industries, proposes to enter the capital markets on December 5, 2007 with a public issue of 9,136,000 equity shares of Rs 10 each through 100% book building process.

Pranav Securities report on BGR Energy Systems IPO

* BGR Energy Systems offers products and solutions for the supply of systems & equipment as well as turnkey engineering project contracting catering to the power, oil & gas, refinery and petrochemical industries.
* The company clocked a CAGR of 50.5% for the topline and 50.6% for the bottomline over FY02-07. The company’s margins have been improving from 9.2% in FY03 to 11.06% in FY07 (18 mths).
* The company’s current order backlog stands at Rs 33.2 billion with 76% coming in from the power project business.
* BGR intends to raise money in order to expand its production facilities in India, China and Middle East as well as fund its working capital and general corporate r equirements.
* The issue is priced at 104.42x FY07 and 117.91x FY07 on lower and upper price band respectively. Though a bit expensive we are robust on the industry and believe the company will sustain its growth trend. We recommend Subscribe.

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