IRCON International Limited IPO Details, Analysis, Subscription & Discussion

IRCON International IPO Issue Details

IPO date:                  17 Sep – 19 Sep 2019
Issue Size:                470 Cr
Offer Price:              Rs 470 – Rs 475 Per Equity Share
Market Lot:              30 Shares & multiples
Exchange Listing:   BSE, NSE

Note: A discount of Rs 10 per equity share is offered to applications in retail and employee quota.

IPO Timelines (tentative dates):

Allotment & refund:    26 Sep
Credit to Demat:           26 Sep
Listing on Exchange:   28 Sep

Company Promoters:  The president of India acting through the Ministry of Railways.

Objective of the Issue: To carry out the disinvestment of 10% selling shares of shareholders

IPO Registrar: Karvy computershare Pvt Ltd

IRCON International IPO subscription status


Company Overview

Delhi based IRCON International Limited, incorporated in 1976, is an  integrated Indian engineering and construction company (government subsidiary company under Ministry of Railways), specializing in major infrastructure projects, including, railways, highways, bridges, flyovers, tunnels, aircraft maintenance hangars, runways, EHV sub-stations, electrical and mechanical works, commercial and residential properties, development of industrial areas, and other infrastructure activities.

Railway sector projects contribute approximately 86.70% of total Order Book.

IRCON international provides Engineering Procurement and Construction (EPC) services on a fixed-sum turnkey basis as well as on an item-rate basis for various infrastructure projects. The company also executes on Build, Operate and Transfer (BOT) as well as Hybrid Annuity Model (HAM).

company website:

IRCON International Limited IPO Analysis

Financial Performance:


Company category: Slow grower


  • CRISIL Research expects the investments in the railway sector to increase by about 77% from Rs 3.9 trillion in fiscals 2015-2018 to Rs 6.8 trillion in fiscals 2019-2022.
  • Track record of on-time, high-quality project completion, robust order book, high profitability margins from foreign market and a comfortable liquidity position
  • According to CARE, the credit rating of the company for long and short-term borrowing has been maintained at AAA/A+ since 2011.
  • The company had buy-back at a price 386.72 per Equity Share in 2017


  • The order book comprises 93% domestic and 85% from the railway sector. In the last few years, the decline in overseas projects reduced profit margin and so the profit though revenue has grown year on year.
  • Railway sector projects contribute approximately 84.99% of Order Book. Any change in the sector causing a decline in the numbers of project available may adversely affect revenues and profitability.
  • Competitive environment and compete against various domestic and foreign engineering, construction and infrastructure companies.
  • Labor-intensive industry and hire contract employees in certain projects.

Peer Comparison:

There is no direct listed peer in such railway construction sector. But indirect listed peers could be infrastructure companies such as IRB infra, J Kumar etc.

Analysis Conclusion

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The company has a robust order book, good track record, diversified business but the decline of overseas projects which reduced profitability margin and so the profit in financial performance in recent years.

Considering current volatility in the market, at an upper price band of Rs 475, the IRCON international IPO is asking Price to Earning (P/E) ratio of 12 which seems more for slow-grower and higher in comparison to its infrastructure sector peers.

I can see the intrinsic value of the company at around 430 Rs. So my say is AVOID the IPO as listing may be neutral (-5% to +5%) and less room for risk to reward.

EPS – Earning per share
P/E – Price to Earning
RoE – Return on Equity
QIB – Qualified Institutional Buyer
NII – Non-Institutional Investors
RII – Retail Individual Investor
EPC – Engineering Procurement and Construction
HAM – Hybrid Annuity Model
BOT – Build, Operate and Transfer



  1. Weak Listing: IRCON International share price falls 11% on debut, opens at Rs 422 from IPO Price Rs. 475 as expected from the BullRun IPO analysis.


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