KNR Constructions Limited -IPO Prospects

IPO: KNR Constructions Limited -Avoid
Issue Period: Jan 24 to Jan 29
Price Range: Rs.170 to Rs.180
Minimum Mkt Lot: 35 shares
Offer Size: Rs.63 crore
Recommendation: Avoid
Grade: Average
Rating: 3 out of 10
Chances of winning Allotment: Strong (in Retail category)
Sector: Infrastructure Sector

Recommendation:

KNR Constructions Limited is a small sized infrastructure company & mainly competes with domestic players in the road construction & irrigation segments. While service quality, technical capability, past performance record, experience, safety records & availability of skilled personnel are key factors influencing client decisions, price often is deciding factor when it comes to awarding contract.

There are a number of competitors having better financials & other resources who have achieved greater market penetration. This may induce the company to accept contracts with lower margins & values if they are unable to compete with other bigger players in the large & high margin contracts.

Hence we recommend investors to Avoid subscribing to this IPO.** KNR Cons. IPO may give listing gains of 10-25%, but it is advisable to avoid this IPO seeing current market scenario. It would be safe to Avoid this IPO & stay in Cash for a few upcoming better Fundamental IPOs.