Broking houses are upbeat about the prospects of Mundra Port and SEZ’s IPO and say that it is one of the better issues to hit the market this year. They point out that even as other large business houses in the country are tapping the market when their projects are a handful of years away, Mundra Port is already operational on mammoth 32,000 acres in Gujarat.
The Adani group company is one of the leading commercial private sector port developers and operators in India and is involved in diverse cargo handling activities and providing value–added port services to port users.
Analysts point that since no other port in the country is listed, the company cannot be compared on the basis of valuations with its peers. But the company’s financials more than make up for this. The operational income of the company has shown a sharp growth (51.2% annualised) from Rs 167 crore in fiscal 2004 to Rs 580 crore in fiscal 2007.
Among the other main positives for the company are its location, the fact that it owns one of the deepest water drafts on the west coast of India, can boast of a comprehensive rail, road connectivity besides its tax-exemption status since it is an SEZ.
The limitations are its dependence on a small number of customers for a large portion of its income and risk pertaining to concessions and licences from government.
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