G R Infraprojects Limited - IPO Note

G R Infraprojects - IPO Note
IPO
by Nikita Bhoota 06/07/2021

G R Infraprojects Ltd IPO Details

Issue Opens - July 07, 2021

Issue Closes - July 09, 2021

Price Band - ₹ 828-837

Face Value - ₹5

Issue Size - ~₹963.28 cr (at upper price band)

Bid Lot - 17 Equity Shares

Issue Type - 100% Book building

 

% Shareholding

Pre-IPO

Post-IPO

Promoter Group

88.04

86.54

Public

11.96

13.46

Source: RHP

Company Background

G R Infraprojects Limited is an integrated road engineering, procurement and construction (“EPC”) company with experience in design and construction of various roads/highways projects across 15 States in India and having recently diversified into projects in the railway sector. The company was incorporated in December 1995. The company’s principal business operations are broadly divided into three categories:

(i) civil construction activities

(ii) development of roads, highways on a Build Operate Transfer (“BOT”) basis, including under annuity and Hybrid Annuity Model (“HAM”); and

(iii) manufacturing activities, under which they process bitumen, manufacture thermoplastic road-marking paint, electric poles and road signage and fabricate and galvanize metal crash barriers.

The Company has executed over 100 projects since 2006.

Offer Details:
The offer is fully comprised of an offer for sale of 11,508,704 shares aggregating up to ₹963.28  
crores at the upper price band. The proceeds would go directly to such selling shareholders. The objective of offer is to provide the company with brand visibility once it’s shares get listed on the exchanges.

G R Infraprojects - Financials

Particulars (Rs million)

FY19

FY20

FY21

Revenue from Operations

52,825.84

63,726.99

78,441.29

EBITDA

13,263.07

16,370.84

19,125.41

EBITDA Margin (%)

24.90

25.49

24.19

PAT

7,166.38

8,008.32

9,532.21

PAT Margin (%)

13.46

12.47

12.06

EPS

73.91

82.59

98.31

RoNW (%)

32.14

26.45

23.95

Net Debt to Equity (x)

0.86

0.87

1.07

Source: RHP

Competitive Strengths:

Focus on EPC projects with a Pan-India presence
G R Infraprojects Limited is focused on EPC projects which executes a range of construction projects involv-ing varying degrees of complexity. The company’s focused approach would enable them to benefit from future market opportunities and expand into new markets. This combined with the company’s technical experience and pricing, will be critical in competing in the industry.

G R Infraprojects Limited’s Order Book primarily comprised of EPC and HAM projects in the road sec-tor across the states of Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat, Chhattisgarh, Rajasthan, Andhra Pradesh, Bihar, Manipur, Odisha and Himachal Pradesh. In addition to these, they also have railway projects in Andhra Pradesh and Madhya Pradesh and an optical fibre project spread across the states of Bihar, Odisha, West Bengal, Andaman and Nicobar Islands, Jharkhand and Sikkim. This shows the pan-India presence that the company has.

Established track record of timely execution 
G R Infraprojects Limited has more than 25 years of experience in the business which enables them in efficient project management and execution of projects with the help of trained and skilled     manpower, efficient deployment of equipment and an in-house integrated model. In the last three years, all the projects were completed within the scheduled time. In addition, in Fiscals 2021, 2020, and 2019, of the total projects completed by the company, 50.00%, 50.00% and 80.00% of such projects were completed before the scheduled completion date, respectively. Timely completion of the projects also enables them to get a bonus.

Risks:

  • Continued effect of Covid-19 pandemic on the company’s business and operations is highly uncertain and cannot be predicted.
  • Failure to obtain new contracts would materially affect the company’s business.
  • Business is dependent on road projects awarded by the GoI or the State Governments and any adverse change in their policies may lead to contracts getting terminated, renegotiated or foreclosed. This would have a material impact on the company’s business

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