Rudra Gas Enterprise Limited is engaged in various facets of the infrastructure sector. They are mainly engaged in gas distribution network projects, fiber cable network, renting of construction machinery and vehicles. They provide end-to-end solutions for the city gas distribution sector. The expertise is in pipeline construction, civil works, and operation and maintenance, for pipeline networks in city gas distribution. In Fiber cable network sector, the company offers services of installations of optical Fiber cable and maintenance thereof. The client base comprises of established players in the city gas distribution industry and telecommunication industry, both in public and private sector. Over the years, they have successfully executed more than 50 projects the major completed projects quantify to approximately Rs 12,708 Lakhs. The execution capabilities have grown significantly with time, both in terms of the size of projects that they bid for and execute, and the number of projects that they execute simultaneously. As on October 31, 2023, they have an order book position for execution of approximately Rs 32,783 lakhs which are at different stages of implementation and out of which approximately Rs 7,571 Lakhs revenue is already booked. The order book, as of any particular date, consists of the unexecuted portions of the outstanding orders, that is, the total contract value of the existing contracts secured by them, as reduced by the value of work executed and billed until the date of such order book. As per financial performance, Rudra Gas Enterprise Limited has posted total income / net profits of Rs 28.17 Cr / Rs 1.27 Cr (FY21), Rs 43.96 Cr / Rs 1.79 Cr (FY22), Rs 49.57 Cr / Rs 3.52 Cr (FY23) and Rs 34.46 Cr / Rs 2.47 Cr (upto 31.10.23 FY24). So as per previous financials data, company has shown average growth and sudden rise in net-profit just before IPO raises doubts. Company has posted an average EPS of Rs 4.89 and average RoNW of 43.37% for last three fiscals. Issue is priced at a P/BV of 2.05 as per NAV of 30.77 as on Post issue. 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 29.28, 14.92 and 12.39 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, Beeline Capital Advisors Private Limited is associated with this SME IPO and handled 29 SME IPOs in last 2 year. From last 13 IPOs, all are opened above or at par issue price on the day of listing. As of now from last 13 IPOs, two are trading below issue price and remaining are trading above or at par issue price. ( As on 05.02.24 ) As per financials, Rudra Gas Enterprise Limited has shown average results, RoNW is 44.09% and P/E is respectively 29.28, 14.92 and 12.39 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. But sudden rise in net-profit just before IPO and higher issue expenses raises doubts. Company has order book of around Rs 32,783/- lakh as on 31.10.23. Company is in business of gas distribution network projects, fiber cable network, renting of construction machinery and vehicles, 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.
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