IVR Prime IPO opens, price band expensive

New Delhi, July 23 (UNI) IVR Prime Urban Developers Limited's Initial Public Offer (IPO) of 14.15 million shares of Rs 10 each in a price band of Rs 510 to Rs 600 opened today amidsts peculations of a high price band keeping retail investors away.

IVR has a skewed nature of operation in Chennai and the Earning Per Share (EPS) based on post issue capital for FY07 is at around Rs 3.20 making the price band extremely expensive on the price-earnings (P/E) multiple criteria.

The company has a relatively limited experience as a real estate developer having completed only one major real estate development project in the Gachibowli Village Project.

Hyderabad-based IVR Prime Urban Developers, a subsidiary of IVRCL Infrastructures and Projects Ltd, has a business centred on affordable housing and the buying power of the vast middle-income group.

''We target individuals with a monthly income of Rs 25,000- Rs 40,000 so that they can get a loan of Rs 14 lakhs easily,'' said IVR Prime Managing Director E Sunil Reddy.

The issue aimis to mop up Rs 722-849 crore and the proceeds will be used to repay loans from IVRCL (Rs 147 crore) and Karnataka Bank (Rs 42 crore).

The remaining amount will go towards construction and development of IVR Prime's Jigani project and construction of an IT park and a mall at Gachibowli, Hyderabad.

UNI