Unity Infraprojects (Unity) has raised Rs73 crore by private placement of 14.5 lakh shares with qualified institutional buyers at the price of Rs506 per share. The proceeds from the qualified institutional placement (QIP) is expected to be utilised by the company to partly fund its capital expenditure (capex) and to meet its working capital requirement.

Given the strong order intake in M9FY2010 and expected lower interest cost, we are upgrading our order book estimates and hence PAT estimates for FY2010 and FY2011 by 5% and 18% respectively. Further the lower than expected earnings dilution will result in our revised EPS getting upgraded by 7% for FY2011.

Hence, we are increasing our price target to Rs569 and maintain our BUY recommendation, as we feel the stock is attractively valued. At current market price of Rs506, the stock trades at 8.9x and 7.1x its FY2010 and FY2011 diluted earnings respectively.

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