Started in 2006, Bharat Road Network Limited is a Kolkata-based road build-operate-transfer (BOT) company in India, focused on development, implementation, operation and maintenance of roads/highways projects. It was incorporated in 2006 as a developer and operator for highways, road and related projects on a BOT basis. As per the letter arrangement dated February 16, 2017, it will manage all the road/ highway assets of its corporate promoter SREI Infrastructure Finance Limited (SREI). At present, all of its projects are implemented and held through special purpose vehicles, either through its Subsidiaries or in partnership with other infrastructure players. The company is involved in operating toll based BOT Projects wherein it has the right to collect toll or user fees. It also performs a range of project management functions, including design, engineering, EPC management and quality control. It also provides project advisory activities including, project management consultancy, project conceptualisation, commissioning, operation and management of the projects during the entire life cycle of its projects. It also undertakes debt syndication, refinancing and financial restructuring of its projects. The company has a project portfolio consisting of 6 BOT projects, of which 2 are projects operational under Final COD, 3 are projects operational under Provisional COD and 1 is a project under Construction. Projects operational under Final COD and projects operational under Provisional COD are located in the states of Kerala, Madhya Pradesh, and Haryana, Uttar Pradesh and Odisha, respectively. Project under Construction is located in the state of Maharashtra. Projects operational under Final COD and projects operational under Provisional COD cover approximately 1,622.44 lane kms, including major and minor bridges and its project under Construction involves development of 400.24 lane kms, including major and minor bridges. Further, as of November 30, 2016 the average residual Concession Period of its BOT projects was approximately 18 years and 10 months in comparison with its average debt maturity profile of 9 years and 9 months. On performance front, BRNL has (on a consolidated basis) reported turnover and losses of Rs. 41.49 cr. / Rs. - (8.38 ) cr. (FY15), Rs. 4.25 cr. / Rs. - (49.84) cr. (FY16) and Rs. 14.93 cr. / Rs. - (36.74) cr. (FY17). It has posted inconsistency in top and bottom lines for all these years. Company has been incurring losses and has carried forward losses too. However, premium collected in preferential issue to promoters in November 2016 has helped company to show positive net worth as on 31.03.17. It has posted average negative EPS of (Rs. 22.13) and (Rs. 48.51) on standalone and consolidated basis for last three fiscals. Average RoNW for last three financial years stands at - (7.29%) and - (159.46%) on standalone and consolidated basis. With the help of premium on preferential issue made in November 2016, it's NAV as on 31.03.17 stood at Rs. 77.17 (standalone) and Rs. 78.64 (consolidated). Thus asking price has a negative P/E which is not measurable. As per financials, company has carried forward losses that will take time for wiping off. It operates in road construction sector and Government is focused to spend on this area, So we give NEUTRAL rating to this IPO.
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