Sunday, June 20, 2010

BUY - India Globalization Capital Inc. (AMEX: IGC)


India Globalization CapitalIndia Globalization Capital Inc. 
(AMEX: IGC)
 Industrial Goods (Heavy Construction)
In the last year, IGC has aggressively positioned itself as a fully integrated infrastructure play with business interest in materials and construction. Recently, the Company has focused on the materials business of rock aggregates and iron ore shipment.We are initiating coverage of IGC with a Buy rating and a price target of $3.00. For the next few quarters, the stock will be driven by IGC's success in executing the contracts in its backlog including the $160 million deal to supply iron ore to a China based steel manufacturing company. The Company is also well positioned in the rock aggregate business with two operational rock quarries as of March 2010 and strong demand in the domestic India market. Click Here For Full Report 

Value Proposition



  • IGC is the only Indian infrastructure company listed in the U.S.
  • The Company is well positioned in a high growth sector in India which is projected to require $366 billion to build out the country’s infrastructure over the next three years.
  • The Government of India (GoI) is providing business and tax incentives to build out Indian infrastructure over the next 10 years, as well as the privatization of certain key assets including highways, airports, sea ports, power plants, etc.
  • With their seasoned management team, GoI Incentives, and India’s rapid, long term growth, IGC is primed for strong growth in a country that is projected to become the third largest economy in the world.




Overview Based in Bethesda, Maryland, India Globalization Capital, Inc. (IGC), is a materials and construction company doing business in India. The Company has three core competencies: 1) Highway and other Heavy Construction, 2) Mining & Quarrying and 3) Civil Construction and Engineering. The Company's medium term plans are to expand each of these lines of business. IGC’s operations are based in India with a U.S. office in Maryland, an international office in Mauritius, and Indian offices in Nagpur, Cochin, Delhi and Bangalore.
Investment Highlights



  • On November 2, 2009, IGC announced that it had been awarded a contract to supply 200,000 metric tons (mT) of rock aggregate to Indian Railways, the stateowned railway company of India. The order is expected to be executed during the current fiscal year ending March 31, 2010 and will generate approximately $1 million in revenue.
  • On October 29, 2009, IGC announced that it has finalized plans and advanced construction for two rock quarries in Maharashtra, India. The quarries are expected to be in production by mid-December 2009. Based on recent pricing, the two quarries combined are represent a revenue potential of $40 million over the next 5 –7 years.
  • IGC recently raised approximately $6 million in a combination of debt and a registered direct financing to support its growing backlog of projects. The financings consisted of:
    • 1) a $2 million debt financing with no interest and the issuance of 530,000 shares of common stock
    • 2) a $2 million debt rollover with an increase of $120,000 in the amount due as the result of accrued interest and the issuance 530,000 shares of common stock
    • 3) an equity offering which netted IGC gross proceeds of about $1.8 million with the issuance approximately 1.6 million shares of common stock at $1.25 and just under 320,000 warrants at $1.60.
  • IGC has recently completed a series of three Chinese iron-ore supply contracts that are collectively worth $6.5 million. China is the worlds largest importer of iron ore, importing approximately 46% of total ore shipped globally.
  • Infrastructure investment in India is expected to increase to 9% of GDP by 2014. The Indian government is seeking to build 36,500 kilometers of roads and highways over the next 5 years.




Posted by suprastock at 6/20/2010 07:54:00 PM

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