Shares of Man Infraconstruction rose nearly 49 percent on its debut on Thursday, despite concerns over its order book favouring residential construction segment.

The shares opened 34.36 percent higher to the issue price of 252 rupees.

In comparison, shares of Godrej Properties opened nearly 20 percent on its debut on Jan 15, while DB Realty debuted at a discount of 3.85 percent on Feb 24.

Real estate firms like Oberoi Realty, Sahara Prime City and Kumar Urban Development Ltd have announced their IPO plans.

There is a good confidence (in the company) by the investors, Chief Financial Officer Ashok M Mehta told Reuters over the telephone.

He cited reasons like the right pricing of the issue, strong order book position and its debt-free status as reasons.

The infrastructure and construction firm raised 1.41 billion rupees through its initial public offering, the proceeds of which would be used to buy equipment.

The company had an order book of 20 billion rupees as on Jan 1. Of this, 13 percent are government orders, and the rest is from private players, Mehta said.

There are quite a few in the pipeline, so in two-three months time we are expecting a good inflow, Mehta said, adding the company was expecting fresh orders from port, infrastructure and real estate segments.

Man Infraconstruction’s area under development is around 20 million square feet as on Jan 1, he said.

Its projects under execution include development of a port at Vallarpadam in Kerala, development of customs office and residential complex for Gujarat Pipavav Ports Ltd and expansion of terminal yards at JNPT among others, he said.

HIGH MARGINS

The margins the company is enjoying right now is very high, as compared to its peers… So as the company grows, this margin has to come down, that was the call we had taken, Shailesh Kanani, senior research analyst, Angel Broking said. The broking firm, in its IPO note on Feb 18, had put an avoid on the stock. The short-term call is good for the company, but the long-term does not look good, Kanani added.

Man Infraconstruction has been clocking high EBITDA margins of 25 percent, which is much higher than its peers, he said.

In its note on the IPO, the broking firm had said the company’s order book is skewed towards residential construction work, which is not only a low-margin business, but highly competitive too.

At 3.08 p.m, Man Infraconstruction shares were trading up by 38.49 percent at 349.50 rupees a share on a firm Mumbai market.