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21 September 2023

Vishnu Prakash R Punglia IPO: Building India's Infrastructure Future

Introduction:

Vishnu Prakash R Punglia Limited, established in 1986, is a prominent player in the infrastructure sector. The company specializes in designing and constructing infrastructure projects for Central and State Governments, autonomous bodies, and private entities across nine states and one Union territory in India.

IPO Details:

The Vishnu Prakash R Punglia IPO, with a total issue size of Rs 308.88 crores, comprised entirely of fresh issue shares amounting to 3.12 crore shares. The IPO subscription window opened on August 24, 2023, and closed on August 28, 2023. Allotment results were declared on August 31, 2023, and the shares were officially listed on both BSE and NSE on September 5, 2023. The IPO was priced in the range of ₹94 to ₹99 per share, with a minimum lot size of 150 shares, requiring a minimum investment of ₹14,850 for retail investors. Subscribers under sNII had to apply for a minimum of 14 lots (2,100 shares), totaling ₹207,900, while bNII applicants needed a minimum of 68 lots (10,200 shares), amounting to ₹1,009,800.

Employee Reservation:

The IPO included a reservation of up to 300,000 shares for employees, offered at a discount of Rs 9 to the issue price.

Key Players:

Choice Capital Advisors Pvt Ltd and Pantomath Capital Advisors Pvt Ltd served as the book running lead managers of the Vishnu Prakash R Punglia IPO, with Link Intime India Private Ltd acting as the registrar for the issue.

Stock Performance:

As of September 15, 2023, Vishnu Prakash R Punglia Limited's stock (Arrow) had reached a 52-week high of ₹175.85 on September 8, 2023, and a 52-week low of ₹144.00 on September 5, 2023. The stock closed at ₹174.60 on that date.

Ownership Structure:

Promoters of the company include Mr. Vishnu Prakash Punglia, Mr. Manohar Lal Punglia, Mr. Sanjay Kumar Punglia, Mr. Kamal Kishor Pungalia, and Mr. Ajay Pungalia. The pre-issue shareholding stood at 90.45%, which reduced to 67.81% post the IPO.

Financial Performance:

Vishnu Prakash R Punglia Limited displayed strong financial performance, with steady growth in its assets, revenue, and profits over the years. As of March 31, 2023, the company's assets had grown to ₹825.48 crores, with a substantial revenue of ₹1,171.46 crores. The profit after tax stood at ₹90.64 crores, contributing to a robust net worth of ₹314.51 crores, along with reserves and surplus of ₹219.96 crores. The company reported total borrowings of ₹250.37 crores.

Performance Indicators:

Key performance indicators (KPIs) for the Vishnu Prakash R Punglia IPO include a Price-to-Earnings (P/E) ratio of 13.61, a Return on Capital Employed (ROCE) of 33.72%, a Debt/Equity ratio of 0.8, Earnings Per Share (EPS) of ₹10.41, and a Return on Net Worth (RoNW) of 38.31%.

Objectives of the Issue:

The funds raised from the IPO were allocated for the following objectives:

1. Funding capital expenditure requirements for the purchase of equipment and machinery
2. Meeting working capital requirements of the company.
3. General corporate purposes.

Expert Opinion::

Noted that the company is an EPC (Engineering, Procurement, and Construction) infrastructure development firm operating across multiple states in India. With a substantial order book of ₹3,800 crore as of July 15, 2023, the company demonstrated its robust presence in the infrastructure sector. Based on its FY23 earnings, the IPO appeared to be fully priced, and well-informed investors might consider this for medium to long-term rewards.

Subscription Status:

The Vishnu Prakash R Punglia IPO received strong investor interest, with a subscription rate of 87.82 times as of August 28, 2023. Retail investors actively participated, with a subscription rate of 32.01 times, while the QIB and NII categories displayed substantial interest.

Conclusion:

Vishnu Prakash R Punglia Limited, with its strong track record in infrastructure development and a healthy order book, has the potential for further growth in India's infrastructure sector. The successful IPO indicates investor confidence in the company's capabilities and its role in building the nation's infrastructure. As it embarks on the next phase of its journey, investors will closely monitor its performance in the ever-evolving infrastructure landscape.

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