V.L.Infraprojects Limited

V.L.Infraprojects Limited is engaged in executing water supply and sewerage infrastructure projects mainly involving the procurement of pipes and their laying, joining, and commissioning with backward integration including all allied civil engineering works like construction of civil work, pumping stations and installation of electro-mechanical equipment's (pumping machinery) for distribution of water supply from the river to household. They also provide operations & maintenance services for water distribution pipelines. The company began its operations focusing on water pipeline projects in Gujarat. They have since expanded the services to encompass all aspects of road construction, irrigation, water infrastructure, and environmental projects. They have locational presence in the state of Madhya Pradesh, Telangana, Maharashtra, and Gujarat. Over the years, on material basis, they have successfully executed around 30 projects worth Rs 10,486.43 Lakhs. Over time, the execution capabilities have grown significantly both in terms of the size of projects that they bid for and execute, and the number of projects that they execute simultaneously. As of July 13, 2024, they have 15 on-going projects worth approximately Rs 33,880.94 Lakhs. As per financial performance, V.L.Infraprojects Limited has posted total income / net profits of Rs 30.77 Cr / Rs 0.83 Cr (FY21), Rs 35.60 Cr / Rs 1.10 Cr (FY22), Rs 45.65 Cr / Rs 2.22 Cr (FY23), Rs 114.00 Cr / Rs 6.14 Cr (FY24). So as per previous financials data, company has shown good growth. Company has posted an average EPS of Rs 3.59 and average RoNW of 28.55% for last three fiscals. Issue is priced at a P/BV of 2.9 as per NAV of 14.47 as on 31.03.24. If we attribute latest earnings of FY22, FY23 and FY24 on fully diluted equity post issue, then asking price is at a P/E of around 59.68, 29.64 and 10.75 respectively, which looks fairly 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 42 SME IPOs in last 3 years. From last 10 SME IPOs, all opened Above issue price or at par on the day of listing. As of now from last 10 SME IPOs, one is trading below issue price and remaining above issue price. ( As on 16.07.24 ) As per financials, V.L.Infraprojects Limited has shown good growth, RoNW is 37.53% and P/E is respectively 59.68, 29.64 and 10.75 as per FY22, FY23 and FY24 earnings. So, issue looks fairly priced. Company is engaged in executing water supply and sewerage infrastructure projects, which is highly fragmented and competitive business segment. Performance of BRLM is good. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Mr. Rajagopal Reddy Annam Reddy
• 2 Mrs. Mydhili Rajagopal Reddy
• 3 Mr. Nageswara Rao Repuri