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  • Writer's pictureJatin Agarwal

Udayshivakumar Infra IPO


Company and IPO Overview:


Udayshivakumar Infra Ltd is a ISO certified company engaged in the business of construction of roads including National Highways, State Highways, District Roads, Smart Roads under PM’s Smart City Mission projects, Smart Roads under Municipal Corporations, Bruhat Bangalore Mahanagara Palike (BBMP) and Local Area Roads in various Taluka Places etc., in the State of Karnataka, Constructions of Bridges across Major and Minor Rivers, Railway Over Bridges (ROB), construction of Major and Minor Irrigation and canal projects, Industrial Areas, based in the State of Karnataka.


Since FY 2015, the Company along with the erstwhile partnership firm, M/s. Udayshivakumar, has completed around 30 projects having an aggregate contract value of Rs 68,468 lakhs, which includes 16 road projects, 5 bridge projects, 6 projects related to irrigation and 3 civil construction works. As on August 31, 2022, the Company is executing 25 ongoing projects which include 7 road projects, 7 smart road projects, 1 bridge project , 7 irrigation projects and 3 civil construction works with an aggregate order book value of Rs 72,030.00 lakhs.

Further, as on August 31, 2022, it also has new work orders allotted (but work not yet started) comprising of 7 roads and 2 irrigation works with an aggregate order book value of Rs 47,659.00 lakhs. As on August 31, 2022 on an aggregate basis, it has 34 works orders in hand having aggregate order book value of Rs 1,19,689.00 lakhs.


The company is about to raise around ₹66 crores via IPO that comprises fresh issue of ₹66 crores only and no OFS. The price band of the IPO is ₹ 33 to ₹ 35. The retail quota is 60%, QIB is 10%, and HNI is 30%.


Financials (rounded off)

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2020

194

10.5

31/03/2021

211

9.32

31/03/2022

186

12.15

Objectives of the Issue:

· The company has become sluggish in terms of growth due to working capital requirements; the company now is raising funds to channelize the funds to meet the incremental working capital requirements.

· To meet other general corporate purposes out of the excess funds so raised.


IPO Details:

IPO Date

20/03/2023-23/03/2023

Face Value

₹10 per share

IPO Price Band

₹33-₹35 per share

IPO Lot Size

428 Shares

Listing at

NSE, BSE

Basis of Allotment

28/03/2023

Credit of Shares in Demat

31/03/2023

Listing Date

03/04/2023

Pre-Issue Shareholding

100%

Post-Issue Shareholding

-

Retail Minimum Lot Size

428 shares (₹14,980)


Valuations and Margins:

FY20

FY21

FY22

EPS (Rs.)

2.87

2.55

3.33

Debt/Equity

0.86

0.54

0.39

ROCE (%)

5

18

17

EBITDA (%)

12.95

11.23

13.41


PE Analysis of the Company with its peer:

Name of the company

P/E

HG Infra Engineers Limited

12.2

PNC Infratech Limited

9.7

KNR Construction Limited

18.5

IRB Infra Developers Limited

21.3

As we see Udayshivakumar Infra Ltd comes with a valuation of something around 10- 10.50, hence we can say the IPO is fairly valued.



Important things to note about the company:


Top reasons to consider the IPO:

· Firstly, the company is coming with a PE of 10.00-10.50 which makes it fairly valued in comparison to its peers.

· The company focuses on the construction of roads, flyovers, and bridges, which requires special skills and expertise.

· The company has a strong order book of construction of roads, flyovers, bridges, and irrigation projects from state Governments.

· Keeping in mind the growth of Indian economy, this can be a good company to keep in radar as the future looks promising for India in the infra sector.

· The company has strong execution capabilities, along with industry experience and expertise.


Risk Factors to watch out in the IPO:

· Infra companies’ fortune is usually linked to political equations.

· The order booked by the company does not guarantee future financial performance

· The company operates in a capital intensive sector, lack of cash flows from operating activities and insufficiency in Free Cash flow (FCF) may adversely affect the business’s operation.

· The company primarily depends on projects awarded to it by the Government of India, state governments, other Government authorities, or entities funded by the Government. Any unfavorable change in Government policy can materially affect the business and results of its operations.

· The current market situation is quite jittery and volatile due to the collapse of Silicon Valley Bank, First Republic Bank and Signature Bank, rate hikes in the European and in the US, poor inflation data worldwide, inclusion of few stocks of the Adani group in long term and short term ASM list.


Crisp Insights:

  • Grey Market Premium is currently flat.

  • Market is in an extreme volatile environment and hence, it is advisable to stay cautious.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.




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