A2Z Maintenance & Engineering Services Limited, a diversified infrastructure player, will open its IPO on December 8 with the price band of Rs 400-410 per share. A2Z is backed by ace stock market investor Rakesh Jhunjhunwala and private equity firms Beacon India Private Equity Fund and India Equity Partners. As it looks to beef up its revenues before the issue, A2Z has also acquired IL&FS Property Management & Services Ltd in a cash and stock deal.
The deal to acquire IL&FS Property Management was done through its subsidiary A2Z Infraservices Ltd for a consideration of Rs 25 crore. While Rs 7 crore cash payment was made to IL&FS Infrastructure Equity Fund and IL&FS Employees Welfare Trust, the infrastructure major has also taken a 20% stake in A2Z Infraservices by way of stock swap. IL&FS Property Management had total revenues of Rs 90 crore in FY10.
A2Z has grown its facility management business through a number of small acqusitions. Earlier this year it acquired a controlling stake in CNCS Facility Solutions Pvt. Ltd, a Mumbai-based facilities management services company.
The A2Z will look to raise Rs 675 crore through a fresh issue and another Rs 187 crore for selling shareholders, which would take the total issue size to Rs 862 crore. Selling shareholders include the promoters, Jhunjhunwala and Beacon. While the pre-money valuation at Rs 410 per share will be at Rs 2,350 crore, the post money valuation could be as high as Rs 3,024 crore.
Beacon is selling a 4.55% stake in the issue, which could help it raise Rs 107 crore at the upper end of the price band. Jhunjhunwala, who has sold some his shares to promoter group over the years, is selling a stake just shy of 1% which will fetch Rs 20.5 crore. Jhunjhunwala had invested Rs 21 crore in May 2006 for a 30% stake, valuing the firm at Rs 70 crore. Jhunjhunwala's stake is now valued at nearly Rs 500 crore as per the price band.
A2Z had revenues of Rs 1,225 crore with net profit of Rs 98 crore for the year ended March'10. For the four-month period ending July 2010, the company had revenues of Rs 418 crore with a net profit of Rs 26.1 crore. The firm plans to use the money raised through the issue for investment in three biomass (bagasse)-based power cogeneration projects of 15 MW each in Punjab besides investment in five biomass-based power generation projects of 15 MW each in the Rajasthan, repayment of a loan granted by L&T Infrastructure Finance besides working capital requirements.
The company is into EPC services for the power transmission and distribution sector with a focus primarily on the distribution segment. It is diversifying the business to provide EPC services to
power generation companies and companies in other sectors, including road and telecommunications.
The issue is being managed by as many as five BRLMs including IDFC Capital, BofA Merrill Lynch, Enam, ICICI Sec and SBI Caps. Yes Bank is the Co-BRLM to the issue.
-- Copyright 2010 VCCircle.com. All rights reserved.
This content/article is provided by Mosaic Media Ventures Private Limited and not by Reuters. All rights, including copyright, in this content/article provided by VCCircle.com are owned or controlled by Mosaic Media Ventures Private Limited. The content may not be copied, broadcast, downloaded and stored (in any medium), transmitted, adapted or changed in any way whatsoever without the prior written permission of Mosaic Media Ventures Private Limited.