Started in 1995, G R Infraprojects Limited is Ahmedabad - Gujarat based an integrated road EPC company with experience in design and construction of various road/highway projects across 14 States in India. Company's principal business operations are broadly divided into three categories: (i) civil construction activities, under which they provide EPC services; (ii) development of roads and highways on a BOT basis; and (iii) manufacturing activities, under which company processes bitumen, manufacture thermoplastic road-marking paint and road signage and fabricate and galvanize metal crash barriers. Company's principal business of civil construction comprises EPC projects in the road sector. Company has since 2006 executed over 89 projects in this sector. They also have experience in constructing state and national highways, bridges, culverts, flyovers, airport runways and rail over-bridges. GRIL operates and manages one BOT road project which is annuity based and is currently constructing another four road projects under the HAM model. In addition, company has recently been awarded three additional projects under the HAM model. They have been pre-qualified by the MoRTH to bid for EPC projects with contract values of upto Rs 9646.10 million as of February 28, 2016. Similarly, they have been pre-qualified by the NHAI to bid for BOT projects with contract value of up to Rs 13,251.00 million as of December 31, 2016, and they have been eligible to bid for BOT projects of contract value up to Rs 17,127.6 million (toll and annuity) and Rs 17,527.6 million (hybrid annuity). As of January 31, 2018, Company had an Order Book of Rs 98,895.40 million that comprised 19 road EPC projects and three other projects across. As of January 31, 2018, Company had 6,473 permanent employees. Company's total income and profit for the year grew at a CAGR of 30.83% and 78.82%, respectively, between Fiscal 2013 to Fiscal 2017. As per financial performance, ICFL has posted total income/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs. 210.80 cr. (FY17). For upto Q3 of FY18, it has reported net profit of Rs. 164.08 cr. on total revenue of Rs. 585.95 cr. So company has posted consistent growth over last couple of years. ICFL has posted an average EPS of Rs. 25.53 and average RoNW of 11.62% for last three fiscals. Issue is priced at a P/BV of 2.17 as per NAV of 263.96 on 31.12.17. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 24. As per RHP, industry average P/E ratio is 28.66 and listed peers comparison shown in above table. So issue looks fully priced. On BRLM's front, five merchant bankers associated with this issue and have handled 58 public issues in the past three years. When we take recent 10 IPOs of each BRLM then out of those 6 issues opened below their offer price and 4 opened at par on listing dates. As per financials, company's growth is consistent and very good, RoNW is 11.62% for last three fiscals and issue is priced at P/E of around 24 as per latest earnings. Company is an NBFC with principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Last two business segments (Vehicle Finance & Housing Finance) are started in recent past and it may give further boost to company's growth, but increasing bond yields and FD rates may put pressure on margins. So we give "SUBSCRIBE FOR LONG TERM" rating to this IPO.
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