Company and IPO Overview:
Vishnu Prakash R Punglia Limited (VPRPL), incorporated in 1986, is in the business of designing and constructing infrastructure projects for the Central and State Governments, autonomous agencies, and private bodies in India’s nine states and one union territory. With 75+ projects and an Order Book of INR 3799.53 Crores. VPRPL showcases excellence in executing infrastructure projects. Recognized for engineering expertise, safety practices, and governance, it's a tech-driven leader expanding across sectors and geographies.
The primary business operations of VPRPL are broadly divided into four categories: (i) Water Supply Projects (“WSP”); (ii) Railway Projects; (iii) Road Projects and (iv) Irrigation Network Projects. VPRPL has design and engineering, procurement, project management, and quality management departments, as well as a fleet of 499 construction vehicles and equipment.
In addition, VPRPL has in-house teams to complete projects from start to finish. This minimizes its reliance on third parties for crucial commodities like ready-mix concrete, stone aggregates, and bitumen, as well as services like design and engineering, transportation, and logistics, which are required in the development and construction of its projects.
Vishnu Prakash R Punglia Limited undertakes projects on an EPC basis, with or without operation and maintenance services (“O&M”). The scope of their services includes detailed engineering of the project, procurement of key materials, and project execution at the sites with overall project management up to the commissioning of these projects.
Vishnu Prakash R Punglia IPO is the next main board IPO which is ready to set its footprints in the stock market and the company is about to raise around ₹ 308.88 crores via IPO comprising Fresh Issue only. The price band of the issue is ₹ 94 to ₹ 99 with a minimum market lot of 150 shares. The company is also allowing an employee discount of ₹9 per share. Vishnu Prakash R Punglia IPO subscription for retail quota is 35.00%, NII is 15.00% and QIB is 50.00%.
Financials (rounded off):
Date | Total Revenue (₹ in cr) | PAT (₹ in cr) |
31/03/2021 | 488 | 19 |
31/03/2022 | 787 | 45 |
31/03/2023 | 1171 | 91 |
Objectives of the Issue:
1. Financing the company’s capital expenditure requirements for the purchase of equipment/machinery.
2. Financing the company’s working capital requirements.
3. General corporate purposes.
IPO Details:
IPO Date | 24/08/2023-28/08/2023 |
Face Value | ₹10 per share |
IPO Price Band | ₹94-₹99 per share |
IPO Lot Size | 150 Shares |
Listing at | NSE, BSE |
Basis of Allotment | 31/08/2023 |
Credit of Shares in Demat | 04/09/2023 |
Listing Date | 05/09/2023 |
Pre-Issue Shareholding | 90.45% |
Post-Issue Shareholding | 67.81% |
Retail Minimum Lot Size | 150 shares (₹14,850) |
Valuations & Margins:
Indicators | FY 21 | FY 22 | FY 23 |
EPS | 2.25 | 5.31 | 10.41 |
P/E | - | - | 9.51 |
EBITDA (%) | 9.7 | 11.26 | 13.63 |
Debt/Equity | 0.98 | 1.11 | 0.8 |
ROCE (%) | 19.4 | 29.94 | 33.72 |
Important things to note about the Company:
Top reasons to consider the IPO:
1. Vishnu Prakash R Punglia Limited has gained good experience for execution of Water Supply Projects (WSP) and has developed financial strength and managerial capabilities. This has enabled them to venture into new segments like railways, roads and various other segments.
2. As a result of its continuing focus on its core areas and ability to effectively bid and win new projects across different segments, VPRPL has been able to reach and maintain Order Book positions. These Order Books will give VPRPL with long-term growth and the capacity to unlock shareholder value.
3. VPRPL’s ambition to become a player in the EPC business has been reliant on its performance and capacity to establish lasting relationships with its clients. This has been made feasible by its ability to adapt to changing client needs and successfully execute projects.
4. Because of its engineering team and labour, in-house integrated model, and equipment deployment, the company has acquired a reputation for project management and execution. VPRPL strongly believes that these competencies have allowed them to complete projects in a successful manner.
Risk factors to watch out in the IPO:
1. The business is mostly focused in Rajasthan, and comprises of majority of its revenue. If the company fails to mitigate the concentration risk, it may not be able to develop its business effectively.
2. The company requires huge working capital which involves long implementation periods. This requires the company to obtain financing through various means. Additional debt financing could increase the interest payments and may require it to comply with new restrictive covenants in its financing agreements.
3. VPRPL’s is dependent on its sub-contractors to perform various portions of the contracts awarded to it. Such dependency exposes the company to certain risks such as the availability and performance of its sub-contractors.
4. Vishnu Prakash R Punglia Limited has obtained an unsecured loan of $844.72 million, which is repayable on demand. Any demand for repayment of such unsecured loans may have a significant impact on the company’s cash flow and financial condition.
Final Thoughts:
Vishnu Prakash R Punglia IPO Review 2023: Given the country’s infrastructural development, coupled with the company’s growth and the company’s outlook appear favourable for the future. However, as investors, it is our responsibility to check if the company is able to attain its revenue from different geographies so that it can expand its business efficiently.
Crisp Insights:
Vishnu Prakash R Punglia IPO GMP Today: The Company is commanding a GMP of around Rs.55.
Vishnu Prakash R Punglia IPO Review: Listing gains likely as per GMP data.
Vishnu Prakash R Punglia GMP is strong and hence, investors can look to invest for listing as well as long term gains.
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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