India: Dilip Buildcon to launch IPO by July-end, PE fund BanyanTree to part-exit

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Mid-sized construction firm -Dilip Buildcon Ltd will launch its initial public offering (IPO) before the end of July, according to two people involved in the process. Capital markets regulator Securities and Exchange Board of India (Sebi) had approved the IPO plan in March.

The company this week asked its book-running lead managers Axis Capital Ltd, IIFL Holdings, JM Financial Institutional Securities and PNB Investment Services to target the launch of the IPO in the second half of July, these people said, asking not to be named.

Fresh shares of up to Rs.430 crore will be issued, and the IPO will also include an offer for sale of 1.136 million shares held by promoters Dilip Suryavanshi and Devendra Jain and private equity fund BanyanTree Growth Capital. BanyanTree, which currently holds about 9.75% in Dilip Buildcon, will sell a 6% stake through the IPO, said the people cited earlier.

The Bhopal-based company, which builds roads, dams, canals and residential projects, had filed its draft red herring prospectus with Sebi in February with a target of raising at least Rs.430 crore through the IPO.

This is Dilip Buildcon’s second attempt at launching an IPO. Last year, the company had proposed to raise to about Rs.650 crore through a public issue of fresh equity shares, but had backed off, citing the cautious sentiment of foreign institutional investors (FIIs) towards the sector. Several of its peers, including Sadbhav Infrastructure Projects Ltd, Ashoka Buildcon Ltd and IRB Infrastructure Developers Ltd, are already listed on the bourses.

The engineering, procurement and construction (EPC) firm, which has built about 50 road projects across India, had a turnover of about Rs.4,000 crore in 2015-16. It also operates 12 build-operate-transfer (BOT) road projects.

Recent policy changes have resulted in greater investor confidence in the highways sector. A steady rise in traffic and toll collections recorded by many highway operators in recent quarters has also improved the investment sentiment in the sector, where many companies are looking to monetize operational assets.

At least 10 other companies, including Mahanagar Gas Ltd, have tapped the capital markets to raise a total of Rs.6,743 crore in 2016. Several others are in the process of launching an IPO. Last year, 21 companies raised Rs.13,614 crore through IPOs, according to data from primary market tracker Prime Database.

The government is planning to award 25,000km of road projects in 2016-17, compared with 10,000km in 2015-16. This has raised the growth potential for road developers looking to win new orders.

This article was first published on Livemint.com

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.