G R Infraprojects Makes a Bumper Listing on Bourses. Big Gains for IPO Investors

G R Infraprojects shares witnessed a strong demand in the secondary market as they listed with a 103% premium on July 19.

It was far better than analysts' expectations considering the company's healthy orderbook and the government's increasing focus on infrastructure.

HDFC Bank, ICICI Securities, Kotak Mahindra Capital, Motilal Oswal Investment Advisor, SBI Capital Markets, and Enquires Capital are the book lead running managers to the issue.

The stock started the first day of trade at Rs 1,700, higher by Rs 863, against issue price of Rs 837 on the BSE.

The company's share price got listed at Rs 1,715 per share on the NSE.

On the other hand, shares of Clean Science and Technology also made its debut on the bourses today.

On NSE, Clean Science shares were trading higher at Rs 1606 as compared to issue price of Rs 900.

G R Infraprojects received good response from investors

The initial public offering (IPO), which was sold between July 7 and 9, was subscribed a whopping 102.6 times.

It received total bids for 83,33,04,538 shares against 81,23,594 shares on offer.

The quota reserved for qualified institutional buyers (QIBs) was subscribed 168.6 times, the non-institutional investor (NII) quota was subscribed 238 times and the one reserved for retail individual investors (RIIs) 12.6 times.

Company's order book till date

G R Infraprojects has grown exponentially over the last 2 decades and is currently an established engineering, procurement, and construction (EPC) player, particularly in the road construction space.

As at the end of March 2021, it's sitting on a robust order book of around Rs 190 bn with book to bill ratio of 2.6x to its financial year 2021 revenue.

This gives a good revenue visibility for the coming years.

Financial snapshot of G R Infraprojects

For the fiscal year 2020, the company reported a total income of Rs 64.2 bn against Rs 53.2 bn a year ago.

Net profit for the period stood at Rs 8 bn versus Rs 7.1 bn in the same period last year.

As of December 2020, its total borrowings were at Rs 42 bn, while its net worth was Rs 37.3 bn. The total order book stood at Rs 182.2 bn.

The average industry price to earnings P/E stands at 16.73 times.

The weighted average return on net worth for fiscals 2019, 2020, and 2021 is 26.2%.

(Rs m)	FY18	FY19	FY20	Dec-20
Revenues	32,954.6	52,825.8	63,727.0	51,081.7
Revenue Growth (%)		60.3%	20.6%
Expenses	28,248.6	43,186.9	52,694.4	41,821.6
Profit Before Tax (PBT)	5,107.4	10,044.2	11,516.2	9,739.4
Net Profit	4,126.9	7,145.1	7,992.3	7,020.3

Data Source: Company's Red Herring Prospectus

The company has not paid any dividend on its equity shares during the last three fiscals.

Important details of the company

CRISIL upgraded long term rating to AA/Stable from AA-/Positive. They reaffirmed short term rating as A+ as on 20 October 2020.

As of March 2021, out of its BOT projects, the company have one operational road project which has been constructed and developed on a BOT (annuity) basis.

Also, the company as on March 2021, has one operational build-operate-transfer (BOT) (annuity) project and 14 road projects under hybrid annuity mode (HAM).

Of the 14 projects, 5 projects are currently operational, 4 projects are under construction and construction is yet to commence on 5 projects.

The company has also bid for projects in metros & high-speed rail and wants to further diversify by wining projects in these segments.

About G R Infraprojects

G R Infraprojects is an integrated road engineering, procurement, and construction (EPC) company.

It has experience in design and construction of various road/highway projects across 15 states in India.

It mainly undertakes civil construction projects under the EPC and build operate transfer (BOT) basis in the road sector.

It has recently diversified into projects in the railway sector. It has also diversified into manufacturing of thermoplastic road-making paints, electric poles, road signages, and fabricating metal crash barriers.

The company was incorporated in December 1995 and have gradually increased their execution capabilities in terms of the size of projects they have bid for and executed.

The first road project executed by the company was for the public works department, Rajasthan in 1997 with a bid project cost of Rs 26.5 m.

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