MUMBAI: Simplex Projects Ltd’s initial public offering of 30 lakh equity shares through 100% book building route opened on Tuesday. The company has priced the Rs 10 share in the Rs 170-185 range. The issue closes July 13.

The company is into construction business, providing integrated engineering, procurement and construction services for civil and structural construction and infrastructure projects.

The net issue will constitute 25% of the fully diluted post-issue paid-up capital. UTI Securities is the book running lead manager and Cameo Corporate Services the registrar.

The equity shares will be listed on BSE and NSE.

The IPO proceeds are mainly for long term working capital, to acquire plant and machinery, and invest in subsidiary Simpark Infrastructure Pvt Ltd.

Simplex Projects’ total income grew to Rs 82.57 crore in 2006-07 (Apr-Mar) from Rs 41.82 crore in 2002-03. Net profit for the period rose to Rs 3.81 crore from Rs 67.65 lakh.

Total income for the year ended Mar 31, 2007 stood at Rs 136.24 crore and net profit Rs 10.49 crore.

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Simplex Projects

Building on opportunities in Kolkata
Wholly owned subsidiary installs, develops, operates and maintains multi-level automated car parking systems

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Simplex Projects is under the control of Balkrishandas Mundhra, who has separated from his brother. (The brother runs the already listed Simplex Infrastructure.) Portfolio of completed and ongoing civil construction projects includes commercial and residential buildings, group housing projects and townships, industrial structures, hospitals, and universities and educational campuses. The infrastructure projects have been in the road, and irrigation and water supply segments.

Simpark Infrastructure, a wholly owned subsidiary of Simplex Projects, installs, develops, operates and maintains multi-level automated car parking systems in Kolkata. It has completed two multilevel, fully-automated car parking projects.

To fund the acquisition of plant and machinery, investment in subsidiary, and augment long-term working capital, Simplex Projects is coming out with an IPO.The price band has been fixed at Rs 170-185. The issue opens on 10 July and closes on 13 July 2007.

Strengths

• The order book of Rs 290 crore represents two times the reported financial year ending Mach 2007 (FY 2007) revenue. The schedule dates for completion of projects range from July 2007 to March 2009.

• Each of the verticals is witnessing significant investment.

Weaknesses

• Over-dependant on construction opportunities in and around Kolkata.

• Negative net operating cash flow in FY 2005, FY 2006 and FY 2007

• The pilling segment has the highest earning before interest, depreciation, tax and amortisation (EBIDTA) margin of about 22-23%. The execution period of pilling contracts, which are of small size, is low. Thus, the growing order book could make it difficult to maintain the proportion of pilling business, thereby impacting margin.

Valuation

Standalone FY 2007 EPS on post-issue equity works out to Rs 8.7. Simplex Projects has not given consolidated financials. If one simply adds the profit of the subsidiary to the standalone profit, the consolidated EPS works out to Rs 11.3. At the offer price band of Rs 170-Rs185, the P/E range on the basis of standalone EPS works out to 19.5 to RS 21.3 and on the basis of assumed consolidated earning it is 15.4-16. Unity Infraprojects, the nearest comparable company, is trading at P/E of around 21.

Kolkata, Apr 19 Simplex Projects Ltd is entering into the retail car parking space and wants to sell semi-automatic car parking solutions to society-managed apartments and multiplexes.

The Rs 130-crore construction company, which specialises in automated multi-level car parking system, will soon put up model car parking space in four metros to showcase the semi-automatic technology it is getting from a Korean company.

Said Pradeep K Mishra, senior vice-president (finance & accounts), “We believe there is a market for retail car parking technology specially in cities where parking costs are gradually increasing. The technology will enable, say, four cars to be stacked up on one another.”

According to Mishra, monthly car parking fees in apartments at Nariman Point in Mumbai could be as high as Rs 15,000.

Mishra said Simplex, to begin with, would bring four prototype models from the Korean firm. “Once the technology transfer is over, we will start manufacturing the entire system in Kolkata.”

Simplex on Thursday signed a technology transfer agreement with EWW, a Dutch company, for a fully automated car parking system. It will sign another agreement with the Korean company for the technology transfer of the semi-automated parking system.

The money to fund these technology collaborations comes from the private placement of 14 lakh shares at Rs 70 per share to Enam Securities. “We are spending part of the proceeds on technology acquisition.”

Simplex Projects has created a fully-automated multi-level car parking system for 280 cars on built-own-operate & transfer (BOOT) basis for a period of 20 years at New Market, Kolkata.

The company is working with the Delhi Municipality Corp as a consultant for development of 11 car-parking zones. Simplex will develop another three zones itself.

The company is also planning for an initital public offer of 30,00,000 equity shares and plans to raise around Rs 50 crore.

Today the equity shares of Kolkata-based integrated infrastructure player Simplex Projects were listed at Rs 323.75 or 75% premium to its issue price of Rs 185 on the BSE.

During the day, the scrip touched an intraday high of 323.75 and low of 266.70. Lastly, the company’s shares closed at Rs 272.05, an increase of 47%.

There were 6,719.672 shares for trading on the BSE counter.

SPL is a supplier of integrated engineering, procurement and building services. The IPO of the company was oversubscribed 84.74 times. The price band for the issue was Rs 170 to Rs 185 per share. The company’s shares were listed on both BSE and NSE.

Simplex Projects chiefly aims to deploy the issue proceeds to expand permanent working capital necessity, acquire plant and machineries and to invest in subsidiary.

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Kolkata April 19 The city-based Simplex Projects Ltd (SPL) has joined hands with EWW Verenigde Bedrijven B.V. of Holland for developing integrated total solutions for automated car parking, also labelled as “EcoSafe Parking”.

SPL on Thursday signed an agreement with the Dutch company for transfer of technology and technical information and specifications relating to design, construction, commissioning and installation of parking systems for projects in India and other South East and South Asian countries such as Singapore, Sri Lanka, Nepal, Bangladesh and Maldives. Under the agreement, SPL will have the exclusive right for such systems.

Briefing newspersons here after the pact signing ceremony, Mr R.D. Mundhra, Director, SPL, said EWW EcoSafe Parking, which has installed 32 underground systems in Holland itself, besides many more in other European countries, is a global player in this field.

The 20-million Dutch ToT partner, he said, has in-house technical expertise for technology upgradation on a continuing basis.

Mr B.K. Mundhra, CMD, said SPL’s agreement with the Delhi Municipal Corporation, involved setting up of automated car parking systems in as many as six locations in the first phase, on a consultancy basis (involving a fee) for most of the projects.

These are Mehrauli, Lajpat Nagar, Ramlila Ground, Kamala Nagar and Hamilton Road. Three other locations have been identified for construction in the second phase. Hand-over of land, however, is yet to be completed.

Pointing out that no single entity can on its own execute all the projects, Mr Mundhra said the work, involving civil engineering and related work, is estimated to cost around Rs 90-100 crore. The company expects to add at least Rs 3-4 crore to its bottom line on each of the projects at different sites.

He said SPL was also in talks with New Delhi Municipal Corporation and Delhi Tourism Corporation for installation of such hi-tech parking systems in the National Capital Region. Talks with other municipal bodies of Mumbai, Bangalore, Chennai, Hyderabad and Jaipur are also.The company is now working on various models of financing and execution of work at each of these locations, and the total cost outlay is estimated at around Rs 500 crore.

Mr Mundhra said the company is also expecting some 3 to 5 more projects to come up in Kolkata, after the Loudon Street and New Market underground parking systems, with a facility to park some 200 to 300 cars at each location. The number will, however, be much more in big cities such as Mumbai or Delhi, where the car-parking requirement at each location could be between 800 and 1,200.

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