The initial public offering (IPO) of GR Infraprojects is all set to open for subscription on Wednesday. The issue will close on July 9 and the shares are likely to be listed on July 19.
The IPO will entirely be an offer-for-sale (OFS) of up to 1.15 crore equity shares by existing promoters and shareholders, and there will not be any fresh issue of shares. The price band for Rs 963-crore IPO has been fixed at Rs 828-837 per equity share.
The proceeds of the public issue will be utilised for investing in certain subsidiaries, repayment of loans, purchase of capital equipment for EPC business, and for other general corporate purposes.
“The company is going to list at PE of 8.51X with a market cap of Rs.80,929, while its peers namely KNR Constructions Ltd and PNC Infratech Ltd are trading at 16.6X and 15.10X respectively,” said analysts at Marwadi Financial Services.
Analysts have given a ‘subscribe’ rating to the issue as the company is an EPC player with a road project focus having established a track record of timely execution and is available as favorable valuation as compared to its peers.
They noted that the company has an in-house integrated model and experienced Promoters with a strong management team. However, the company’s business is capital intensive. If they experience insufficient cash flows to meet required payments on the debt and working capital requirements, there may be an adverse effect on the results of their operations.
HDFC Bank, ICICI Securities, Kotak Mahindra Capital Company, Motilal Oswal Investment Advisors, SBI Capital Markets, and Equirus Capital Private Ltd, are the book running lead managers to the issue.
G R Infraprojects Ltd is an integrated road engineering, procurement, and construction company with experience in the design and construction of road/highway projects across 15 states in India and has recently diversified into projects in the railway sector.
The company has 3 manufacturing units at Udaipur (Rajasthan), Guwahati (Assam), and Sandila (Uttar Pradesh) for processing bitumen, thermoplastic road-marking paint and road signage, and a fabrication and galvanization unit at Ahmedabad, Gujarat for manufacturing metal crash barriers and electric poles.