K2 Infragen Limited is an integrated engineering, procurement and construction (“EPC”) with a focus on Power Engineering and Project Engineering having experience in design and construction of various projects across 8 States in India viz. Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab & Delhi. They provide the services across the value chain, ranging from design, procurement, construction supervision, subcontract management and work order management to post-construction activities to the clients. The company is certified for ISO 14001:2015 (Environment Management System), 45001:2018 (Occupational Health & Safety Management System), and 9001:2015 (Quality Management System) by Globus Certifications Private Limited. They have been accredited with various registrations as a contractor with various departments and agencies viz. Public Works Department, Rajasthan (Class AA), Public Works Department, Madhya Pradesh, Bhopal (Class AA), pursuant to which they are also eligible to participate and undertake projects awarded by various other departments and agencies. They have been accredited with various registrations as a contractor with various departments and agencies viz. Public Works Department, Rajasthan (Class AA), Public Works Department, Madhya Pradesh, Bhopal (Class AA), pursuant to which they are also eligible to participate and undertake projects awarded by various other departments and agencies. The business is broadly divided into below mentioned categories: 1.Engineering, Procurement and Construction (EPC) a. Contract Business b. Service Business 2.Trading Business As per financial performance, K2 Infragen Limited has posted total income / net profits of Rs 35.68 Cr / Rs 0.22 Cr (FY21), Rs 36.85 Cr / Rs (3.11) Cr (FY22), Rs 74.90 Cr / Rs 11.32 Cr (FY23) and Rs 59.68 Cr / Rs 6.07 Cr (upto Q2 FY24). So as per previous financials data, company has shown very good growth. Company has posted an average EPS of Rs 6.83 and average RoNW of 129.20% for last three fiscals. Issue is priced at a P/BV of 4.32 as per NAV of 27.53 as on 30.09.2023. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (482.83), 132.65 and 123.69 respectively, which looks aggressively priced. Order book as on Feb 29, 2024, is more than Rs 395/- Cr. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Expert Global Consultants Private Limited is associated with this SME IPO and handled 6 SME IPOs in last 2 year. From last 6 SME IPOs, one opened below issue price and remaining opened above issue price or at par on the day of listing. As of now from last 6 SME IPOs, two are trading below issue price and remaining trading above or at par issue price. ( As on 22.03.24 ) As per financials, K2 Infragen Limited has shown good results, RoNW is 81.40% and P/E is respectively (482.83), 132.65 and 123.69 as per FY22, FY23 and annualised FY24 earnings. So, issue looks aggressively priced, but order book of company is around Rs 395/- Cr. Company is in business of integrated engineering, procurement and construction ('EPC') with a focus on Power Engineering and Project Engineering, which is highly competitive and fragmented segment. Performance of BRLM is good. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
✍️ Post a Comment