Sonu Infratech Limited

Sonu Infratech Limited, started in 2001 as partnership firm, is engaged into the business of civil construction services, such as piling, excavation, road preparation, land leveling, structural painting, building construction in nature of commercial and industrial project, mechanical scaffolding services including structuring and piping, Plant maintenance at Reliance DTA (Domestic Territory Area), Reliance SEZ (Special Economic Zone), Reliance MTF (Marine Time Farm including DTA and SEZ), Reliance J3 (C2 Complex, PCG DTA, PCG SEZ, Rubber Plant), Nayara Maintenance, Repairs and Maintenance services such as plumbing, electrification, cleaning of vessels, plant and machinery, tanks during shut down period of the company who had awarded them contract etc. They also have their own plant and machinery and vehicle which enables them to provide a complete range of civil construction services for majority of all type of civil construction and infrastructure related work. They are class 'C' contracts ('Upper Tendering Limit of Rs. 100 Lakh') which enables them to bid the contract for any kind of defense segment work in India. They have successfully completed various contracts awarded by Military Engineering Services ('MES'). As per financial performance, SIL has posted total income/net profits of Rs 34.13 Cr / Rs 0.64 Cr (FY19), Rs 41.14 Cr / Rs 0.66 Cr (FY20), Rs 40.77 Cr / Rs 1.4 Cr (FY21) and Rs 32.39 Cr / Rs 1.04 Cr (7M FY22). So company has shown above average results. Company has posted an average EPS of Rs 1.88 and average RoNW of 11.87% for last three fiscals. Issue is priced at a P/B of 1.53 as per NAV of Rs 23.59 post issue. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 20 and as per annualised FY22 earnings P/E is 16. As per RHP, Comparison between listed peers are shown in above table.     On BRLM's front, Swastika Investmart Limited associated with this SME IPO and handled 2 IPOs in last 3 years. From last 10 IPOs, 5 opened above issue price and remaining below issue price or at par. As of now from last 10 IPOs, six are trading above and remaining are trading below issue price. ( As on 29.04.22 ) As per financials SIL, has shown above average results, RoNW is 15.14% and P/E is respectively 20 and 16 as per FY21 and annualised FY22 earnings, which looks fully priced. Performance of BRLM is average post listing. This business segment of civil construction is highly competitive and we may find better options in listed players, so we are giving AVOID rating to this IPO.

• 1 Mr. Ramji Shrinarayan Pandey
• 2 Mr. Ketan Vallabhdas Modi