Parsvnath Developers phenomenal debut

Parsvnath Developers was trading at Rs 550.10 on BSE in early trade, an 83.3% premium over the IPO price of Rs 300.

The scrip hit a low of Rs 481.50 and a high of Rs 579. As many as 40,400 shares changed hands in the counter on BSE.

NSE has also admitted the scrip for derivatives trading, at a market lot of 700 shares.

The company’s paid-up equity capital is Rs 181.60 crore, the face value per share being Rs 10.

The company had priced its IPO at the higher end of the Rs 250 - Rs 300 price band. The IPO had strong investors response. It was subscribed over 60 times, FIIs making a beeline for the public offer.

Parsvnath Developers derives most of its revenue from residential and integrated township projects in Harayana and Uttar Pradesh (UP). The company plans to diversify its revenue in terms of locations as well as projects.

Parsvnath Developers has acquired land/ development rights to develop 20 integrated townships, 27 commercial complexes including shopping malls, multiplexes, office space and a complete metro station and 25 residential projects. The company intends to construct 14 hotels and four information technology parks on commercial land acquired by it.

The track record of Parsvnath Developers includes 17 projects comprising nine housing projects and eight commercial complexes. The company had floated the IPO early this month, to finance 11 of the 90 projects on hand.

As of 15 October 2006, Parsvanth Developers directly owned or held development rights for an estimated 108.64 million square feet of sale worthy area.

In last five fiscals, Parsvnath Developers’s revenue has grown at a CAGR of 121% and net profit at a CAGR of 139%. On the flip side, Parsvanath Developers had a negative operating cash flow in the last two financial years. In the quarter ended June 2006, too, the operating cash flow was negative.

The company has obtained in principle approvals from the government for nine SEZs. As per provisions of sec 80-IAB of the Income-Tax Act, 1961, the company is eligible for 100% deduction of profit derived from developing an SEZ notified on or after 1 April 2005 under the Special Economic Zones Act, 2005, for 10 consecutive assessment years.