Bharat Road Network Limited is a road BOT company in India, who focus on development, implementation, operation and maintenance of roads/highways projects. Bharat Road Network Limited is a subsidiary of SREI Infrastructure Finance Ltd. Bharat Road Network Limited is coming up with an IPO. They are going to introduce their initial public offer which will hit the primary market on 6th September, 2017 and closes on 8th September, 2017. The company aims to raise around Rs.600 crore by offering shares at Rs 195-Rs 205 Per Equity Share.
Bharat Road Network Limited was incorporated as ‘Bharat Road Network Limited’ on December 22, 2006, at Kolkata. They are a road BOT (Build–operate–transfer) company. They mainly focused on development, implementation, operation and maintenance of roads/highways projects. Basically, they are involved in the development, operation and maintenance of national and state highways in several states in India.
They have running projects in states of Uttar Pradesh, Kerala, Haryana, Madhya Pradesh, Maharashtra and Odisha through partnerships with experienced EPC players in the local space where the project is located.
The firm performs different project management function which includes design, engineering, EPC management and quality control. They also provide project advisory activities which includes project management consultancy, project conceptualization, commissioning, operation and management of the projects during the entire life cycle of their projects. They also undertake debt syndication, refinancing and financial restructuring of our projects.
They have a project portfolio which consists of six (6) BOT Projects, out of which-
- Two are Projects operational under Final COD,
- Three are Projects operational under Provisional COD and
- One is a Project under Construction.
Their Projects operational under Final COD and Provisional COD are located in the states of Kerala, Madhya Pradesh, and Haryana, Uttar Pradesh and Odisha, respectively. Their under construction project is located in the state of Maharashtra. Their operational projects under Final COD and Provisional COD cover approximately 1,622.44 lane kms, including major and minor bridges and approximately 12 lane kms and 60.72 lane kms are under construction at the GAEPL Project and SJEPL.
They are also involved in operating toll based BOT Projects in which they have the right to collect toll or user fees. Their Company generates revenue from toll operations & maintenance and project management consultancy fees including from their Project SPVs. Details of their Company’s equity shareholdings in various Project SPVs are as follows:
They believe the following are their strengths:
- Diverse portfolio of projects in several states in India and long residual concession period of the projects
- Ability to partner with domestic and international experienced EPC players
- Ability to effectively finance and manage their projects
- Strong and experienced Corporate Promoter
- Experienced and professional management team with strong asset management, execution capabilities and extensive industry experience
- Increased focus on mid to large BOT Projects
- Strengthen internal systems and continue to focus on technology and operational efficiency
- Leverage our core competencies through increased activities in the secondary market
- Increasing financial efficiencies
- Enhancing in-house integration with an aim to improve performance and enhance returns
Business and Operations
Their main business operations can be divided into three categories, i.e.
- Project development and implementation
- Operation and maintenance of tolling operations
- Providing advisory and project management services to their projects.
Objects of the Issue:
The object of the issue is:
- Advancing of subordinate debt in form of interest free unsecured loan to their Subsidiary, STPL, for part financing of the STPL Project (“STPL Sponsor Investment”);
2. Acquisition of the subordinated debt in the form of unsecured loan s/OCPIDs/warrants/OCDs, advanced/held by SREI to STPL, KEPL and MTPL (“Identified SPVs”);
3. Benefits of listing of its Equity Shares on the Stock Exchanges; and
4. General corporate purposes.
The revenue of BRNL has increased from 68 lakh in 2013 to 10.2 Cr in 2017. They are still not profitable
As Rs 205, the shares would be valued at 32 times their 2016-17 enterprise value. This is high when compared to pears in the same business.
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