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Bondada Engineering IPO is entirely a fresh equity issue of up to 56.96 lakh equity shares aggregating up to Rs 42.72 crore. The stock will get listed on SME segment of the BSE. Bondada Engineering Limited provides engineering, procurement, and construction (EPC) services and operations and maintenance (O&M) services to companies operating in the telecom and solar energy industry.

About Bondada Engineering:

• Bondada Engineering is ISO 9001:2015 certified integrated infrastructure company engaged in the business of providing engineering, procurement and construction (“EPC”) services and operations and maintenance (“O&M”) services to pan India customers operating in the telecom and solar energy industry.
• The Company was established in 2012 by a team of experienced professionals with an objective of providing comprehensive services to the infrastructure industry.
• Product/Service Offering: It provides EPC services, O&M services and Tower manufacturing products.
• Through its subsidiary BAPL, it supplies Un-Plasticized polyvinyl chloride (“uPVC”) products such as doors and windows
• Geographies Served: PAN India
• Raghavendra Rao Bondada, Neelima Bondada and Satyanarayana Baratam are the promoters of the company.
• As of March 31, 2023, it had 564 permanent employees and 270 contract labourers.
• It is engaged in following areas.

Financials: Bondada Engineering

Bondada Engineering IPO: Salient Points

• The OFC network in India is expected to grow at least by 10% per annum. Globally, transition from 3G to 4G network resulted in OFC network increased by three times – to support the higher data flow. Given the much higher data speed supported by 5G, the scale of growth in OFC network as the transition from 4G to 5G happen will be higher.
• Compnay stands to benefit from the widespread adoption of 4G and the implementation of 5G networks, along with the Digital India campaign and the BharatNet project. The Government is providing support for domestic manufacturing and attracting investments in telecom and networking services through the Production Linked Incentive scheme, as well as undertaking initiatives such as the Prime Minister Wi-Fi Access Network Interface (PM-WANI), Tarang Sanchar, revival of BSNL etc.
• The company achieved considerable growth in its business since incorporation. Our consolidated revenue from operation and net profits have increased from ₹ 751.10 lakhs and ₹ 20.98 lakhs, respectively in fiscal 2013 to ₹ 37,058.85 lakhs and ₹ 1,825.19 lakhs, respectively in fiscal 2023, demonstrating a CAGR of 47.68% and 56.30%, respectively. d. It has grown at a CAGR of 13.61% and 40.81% in terms of revenue from operations and profit after tax over the last three Fiscals.
• The company holds long-term contracts for telecom and solar projects, which offer a clear outlook on its future revenue streams.
• It has Rs. 1415 cr. orders for telecom and Rs. 105 cr. orders for the solar energy sector, thus totaling Rs. 1520 crore orders in hand.
• The company has undertaken projects for over 11,600 telecom sites across 7 states in India. In the past three fiscal years, it has successfully executed contracts totaling more than Rs 515.1 crore in the fields of telecom tower EPC and solar EPC segments.
• Top five customers accounted for 92.49% of its revenues. However it is yo be noted that the company’s major customers include reputed telecom service providers and telecom infra companies in India like Reliance Projects and Property Management Services Limited, Reliance Jio, Indus Towers Limited, Tata Communications Transformation Services Ltd , Railtel etc. which have strong credit risk profiles.
• BEPL has been hiring professionals from the industry in recent years at various leadership positions across verticals and project divisions, which augurs well for the future growth prospects of the company
• The proposed utilisation of the Net Proceeds by Company is set forth in the following table: (₹ in Lakh)

• Initially, company started business as a telecom EPC service provider. It then also ventured into other services such as solar EPC, telecom tower and OFC O&M, solar O&M, manufacturing of telecom tower, supply of AAC blocks and other construction materials and supply of uPVC products enter into O&M contracts with telecom tower operators to provide the operators passive telecom infrastructure facility and services.
• Revenue segmentation by product/service offering: For Fiscal 2023, 63.98% from EPC Service, 13.81% from O&M Services, 11.54% from Tower Manufacturing and 10.68% from other operations.
• Segment wise key operational and financial metrics on a consolidated basis from various operations for Fiscal 2023, Fiscal 2022 and Fiscal 2021 is set forth below:

• Debt to equity ratio is 1.07. Long term credit rating of company has been steady with ICRA rating of BBB Stable for last 3 years.
• Company’s unique combination of expertise in telecom and solar EPC, O&M, OFC networks services, construction services, and manufacturing of telecom towers and construction products is a distinct advantage
• The offer is at a PE ratio of 8.9x (fy23 earnings). P/BV at the upper end is 1.34x.
• I intend to apply in Bondada Engineering IPO subject to availability of funds.
• GMP as reported on social media has been around Rs. 25.
• Vivro Financial Services is the lead manager. Past issues handled by them include K.P.I. Global Infrastructure Limited, ICE Make Refrigeration Ltd, Raj Television Network Ltd, Sai Silks (Kalamandir) Ltd, Capacit’e Infraprojects Limited , Sai Silks (Kalamandir) Ltd etc.
• Rikhav Securities is the market maker. They have been market maker in Sangani Hospitals, Zeal Global Services, Service Care, Aatmaj Healthcare, Spectrum Talent Management, Sahana System , Anlon Technology, MOS Utility, Homesfy Realty etc.
• SME IPO are quite illiquid and volatile and exit options sometimes is delayed. Product as indicated by its larger lot size is not well suited to retail investors.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.