The initial share sale of engineering, procurement and construction (EPC) company Vishnu Prakash R Punglia Limited (VPRPL) will open for public subscription on Thursday, August 24, and close on August 28.
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Jodhpur-based Vishnu Prakash R Punglia has fixed a price band of Rs 94-99 per share for its Rs 309-crore initial public offering (IPO). Investors can bid for a minimum of 150 equity shares and in multiples of 150 equity shares thereafter.Ahead of the issue opening, shares of the company are commanding a premium of Rs 54 in the unlisted market. The grey market is an unofficial market wherein the IPO shares can be bought and sold till the listing.
Should investors apply or not?
Analysts mostly have a ‘Subscribe’ rating to the IPO, as the company’s healthy order book and industry tailwinds are expected to record strong profitability in coming years.
At the upper price band, the company is valuing at P/E (price-earnings) of 13 times with a market cap of Rs 12,339 million post issue of equity shares and return on net worth of 38.3 percent.
As on Jul’23, VPRPL has 51 on-going projects with total work awarded amounting to Rs 6,183 crore, of which Rs 2,384 crore worth of work has been executed and the remaining work amounting to Rs 3,799.53 crore constitutes the order book.
On the valuation front, Anand Rathi said that the company is fairly priced. Thus, the brokerage has a ‘Subscribe – Long Term’ rating to the IPO.
About the offer
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The offer consists of a fresh issue of 3.12 crore equity shares with no offer-for-sale (OFS) component. The offer also includes a reservation for a subscription by eligible employees.
The issue will fetch Rs 293.28 crore and Rs 308.88 crore at the lower and upper end of the price band, respectively.
The net proceeds from the fresh issuance will be utilised for purchasing capital equipment, funding the working capital requirements of the company and the balance for general corporate purposes.
About 50 percent of the offer has been aside for qualified institutional buyers, 15 percent for non-institutional investors and the remaining 35 percent for retail investors.
Choice Capital Advisors Private Limited and Pantomath Capital Advisors Private Limited are the book-running lead managers to the issue while Link Intime India is the registrar.The equity shares are proposed to be listed on both BSE and NSE.
Company overview
Vishnu Prakash R Punglia’s revenue from operations increased to Rs 1168.40 crore in the financial year ended March 31, 2023, from Rs 785.61 crore in the year-ago period.
Incorporated in 1986, VPRPL is an integrated EPC company with experience in design and construction of various infrastructure projects for the Central and State Government, autonomous bodies, and private bodies across 9 States and 1 Union territory in India.
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The company’s principal business operations are broadly divided into 4 categories: (i) Water Supply Projects (“WSP”); (ii) Railway Projects; (iii) Road Projects and (iv) Irrigation Network Projects.
