Kridhan Infra - Capability building through acquisitions

Thanks for Information. I would like to know what is debt figure and profitability of VNC if you have any information about it?

Is QIP good or bad for existing shareholders?

QIP closed at rs 99/sh for allocation of 13007778 shares to each institutional investor.


couple of red flags
receivable more than 6 mths - 171 cr, increased from 24cr
mgmt salary is 0 - how their house runs ?


some points worth pondering

  1. goodwill increased from 22 cr to 143 cr…, can’t find any details on goodwill…, if had been acquiring loss making business should be a negative goodwill
  2. considerable difference between rebitda and cfo, fy17 rebitda=1046 m, fy17 cfo=660m, reconciliation missing
  3. initial track record does look impressive though with ±30%cagr equity growth, how much organic not clear
1 Like

Go long on Kridhan, having worked with them in past and having seen the development in business both in Indian and Singapore, I m sure they will deliver big in future

Could you please elaborate why you are optimistic?
My initial reading is that it has grown unorganically too much and we know most M&A destroys shareholder value. Also the budget was dissapointing on the infra/construction front. What is Kridhan’s moat for executing in India when the same work can be done by well-entrenched local players? Especially since they don’t have much execution under their belt except through acquired companies. Appreciate the views of an Industry person.

1 Like


Firstly, to clarify I m not from the industry in which Kridhan operates, I had worked as a watchdog for them in past. None of my views should be read as a recommendation of buy or sell.
Plus as I see to stay invested in Kridhan are -

  1. It is a holding company, the only way it will grow is inorganically. They have the benefit of obtaining loan from Singapore company at cheaper rate ( loan is cheaper as compared to India) and make further investments to grow big inorganically
  2. Swee Hong is the jewel in their box, it is a turnaround story and many Marquee players are taking big position in the said company in Singapore. More details can be obtained from official website of Singapore exchange.
  3. Recent acquisition in Vishakapatnam is their entry in EPC market and as a majority player post further acqusition on 12-feb,18, the said acquisition will be a tremendous contributor to top n bottom line both of the company.
  4. Many big players( govt of Singapore an other Indian fund house) have taken position in the Company with an expectation of riding the infra boom.
  5. Bukit brown project north corridor will be getting completed in Q4 of FY 18 and the balance will be done by Q2 of FY 19 ( read it is Q3 of FY18 and Q1 of FY19 as Sweet Hong financials, as Singapore follows financial year from July to June. It is one of the Marquee project in Singapore although delayed but will see good response in price moment. Swee Hong are eligible to bid for unlimited projects and decisions for few projects where the company had bid in past are expected, we may get positive surprise in same.

Only Minus -

As I see, may be a :bear: bear market which is unlikely.if Modi gets a 2nd term which is likely and with our current Nagpur minister for road and port, we will see some serious investments in infra.


Won 255 cr order from Singapore and should be executed within 1 yr.

1 Like

Good to see this pattern in Kridhan weekly chart.


The most recent rating by ICRA was D and rating was later withdrawn due to non Co-operation. Shouldn’t this be a red flag?

Hi , Can you share us the source document for same.

I just saw it in screener. You can try searching in ICRA website

In Screener , it continues to display D rating from ICRA. There is no announcement in BSE with regard to withdrawal of rating…

@SlownSteady, You r right. I just checked ICRA website and searched for Kridhan Infra rating. Raing suspended. But no explanation is available. Strange, company did not think it is important to dessemnate this info to public or BSE/NSE. Looks like a red flag.

1 Like

Rating was withdrawn in June 2016 as per ICRA website. I think they are getting done from some other credit rating agency and this is normal switching from one credit rating agency to other credit rating agency.

Ratings referred by you is an old rating. Further, as per listing agreement , no requirement to disclose ratings to any of exchanges.i don’t think it is a red flag.

Further, just for records, I wish to bring to knowledge of the group that Swee Hong the subsidiary company has concluded sale of $50lakhs worth of bond to institutional investors in Singapore market the proceeds of same is used to pay back working capital loan with higher cost, a big positive for Company

It is the matter of a rating of D which is junk status rather than not disclosing the rating which is worrying me. For example Kwality has an A+ rating and investors are still worried about the piling debt. D rating pretty much means the borrowers capacity to pay back is highly suspect.

Latest Investor Presentation -

After QIP, equity share capital was diluted from 14.82cr to 17.42cr.
Now the Investor Presentation says that 76,79,662 shares were issued to the investors of VNC for 31% stake.
This means additional 1.536cr added to the equity share capital.
Latest equity share capital after this dilution is 18.956cr. And the total number of shares outstanding is 9.478cr.

If we calculate TTM EPS based on the latest number of shares outstanding, then it stands at 6.248 rs. And P/E will be 17.8.
Without equity dilution, P/E would’ve been at 13.91. Hope VNC is worth more than the EPS we lost due to the dilution.

1 Like