Highway Users' Centres (India) Ltd, incorporated with the objective of providing highway utility services in Maharashtra, is coming out with its maiden public offer of Rs 7 crore. The concept of providing such facilities, consisting mainly of motels/way side hotels, emergency road services, vehicle check up ambulance services, etc., is quite new to India.

To meet these objectives, the company already has a number of highway users enrolled as life members. The company expects to enroll 12000 members by the year 1998-99, with an estimated annual growth of 5 per cent in the subsequent years. Given the acceleration of growth of the economy in general, and the industrial growth prospects in Maharashtra in particular, the future could be remunerative for such ventures.

The present issue is being offered mainly to part finance the project cost. However, there is already time overrun in the implementation of the project. This may result in cost overrun, and in effect would certainly change the financial projections as given in the prospectus.

The project has been appraised by the Tourism Finance Corporation of India. The company projects a PAT of Rs 0.73 crore, Rs 1.55 crore, and Rs 1.73 crore, on an income of Rs 3.56 crore, Rs 7.49 crore, and Rs 7.68 crore respectively for the three consecutive years beginning 1996-97. EPS figures for the same period work out to Rs 0.64, Rs 1.35, and Rs 1.51 respectively.The post-issue promoters' holding in the company would be 39.14 per cent, of which 14.14 per cent is lock-in free. Given the equity structure for others, NRI/OCB/FII holdings would be 14.6 per cent, Banks and mutual funds would hold 21.3 per cent, and the general public would hold the rest 25 per cent. Though some of the promoters do have prior experience in the related field of hospitality business, the company had accumulated losses since its inception in 1989 till 1995-96. Another important point is the long list of legal disputes between the Income Tax Department and the promoters/directors of the company/group companies and the ventures of the promoters of this company.

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