IL&FS Transportation lists at premium on debut

IL&FS Transportation lists at premium on debut

Mumbai: Transport infrastructure firm IL&FS Transportation Networks Ltd (ITNL) on Tuesday added to the recent run of largely positive market listings, notching up a 12.4% premium on its debut on the Bombay Stock Exchange.

“As of now the premium looks decent enough, we had expected it to list in the 10-15% (premium) range," said Shailesh Kanani, analyst at Angel Broking.

The stock opened at Rs290 on the BSE, compared to its issue price of Rs258, and touched a high of Rs295.

The company, a unit of infrastructure development and finance firm IL&FS, had raised Rs700 crore through its initial public offer.

Earlier this month, ARSS Infra had listed at a 44% premium, while Man Infraconstruction debuted 34.36% up, reflecting renewed bouyancy in infrastructure and allied sectors.

Kanani said IL&FS Transportation Networks (ITNL) was poised to benefit due to strong backing from IL&FS and a favourable outlook for the surface transportation sector, a focal area for the Indian government.

The National Highways Authority of India (NHAI) awarded 2,988 kilometres of projects to infrastructure firms in the year to March 2010, with IL&FS Transportation having a 10.1% share in the project awards, trailing only IRB Infra , a report by Motilal Oswal said.

The NHAI is set to award another 18,581 km of road projects by end FY11, the brokerage added.

“I think this is also the first time a pure construction player in road vertical is hitting the capital market. It is very good to have value realisation for a sector like this in the market," IL&FS chairman Ravi Parthasarathy told reporters after the listing ceremony.


ITNL has emerged as one of the lowest bidders for a $1.5-billion road project in Kazhakstan, managing director K Ramchand said.

This is a 300-km trans-European road project, he said. It has been pre-qualified for 500 billion rupees worth of NHAI projects, including a road project in Kashmir, for which it is the lowest bidder.

The company has an order book of Rs12,000 crore, Ramchand added.

IL&FS Transportation Networks would also diversify into railway projects, he said but did not elaborate.

Enam Securities Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd and JM Financial Consultants Pvt Ltd were the bookrunners of the issue.

At 1:10 p.m., shares were trading 9.69% higher at Rs283, in a firm Mumbai market.