GR Infra Projects IPO (GR Infra IPO) of Rs. 962 crore is entirely an offer-for-sale (OFS) of up to 1.15 crore equity shares by existing promoters and shareholders (PE investor Motilal Oswal). GR Infra Projects is an integrated road engineering, procurement and construction company with experience in design and construction of various road/highway projects across 15 states in India and has recently diversified into railway sector projects.

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GR Infra Projects IPO Details:

Issue PeriodWed, 7th July – 9th July, 2021
Face Value₹ 5 /-
Issue DetailsOffer for Sale of 11,508,704 Equity Shares
Issue Size (₹ Cr)₹ 962 Cr (at upper end)
Bid Lot17 Shares
Price Band₹ 828 – 837
Issue Structure : 
QIB50% of the net offer 
NIB15% of the net offer
Retail35% of offer ( ~ 3,949,297 Shares, 330.56 Cr)
Applications needed  1x Retail2.32 Lacs
BRLMsHDFC Bank, ICICI Securities, Kotak Mahindra Capital, Motilal Oswal, SBI Capital Markets, Equirus Capital
RegistrarKFin Technologies Pvt. Ltd.

Updates & Indicative Time Table:

  • ANCHOR ISSUE:
  • Indicative Timetable
    • Finalisation of Basis of Allotment 14-07-2021
    • Refunds/Unblocking ASBA 15-07-2021
    • Credit of equity shares 16-07-2021
    • Trading commences 19-07-2021

About GR Infra Projects

  • The Company was incorporated as ‘G. R. Agarwal Builders and Developers Limited’ in 1995.
  • GR Infra Projects is an integrated road EPC company with experience in design and construction of various road/highwayprojects across 15 States in India.
  • The company hasrecently diversified into projects in the railway sector.
  • GR Infra Projects principal business operations are broadly divided into three categories:
    • Civil construction activities, under which it provide EPC services
    • Development of roads, highways on a BOT basis, including under annuity and HAM
    • Manufacturing activities, under which include processing bitumen, manufacture thermoplastic road-marking paint, electric poles and road signage and fabricate and galvanize metal crash barriers.
  • As of March 31, 2021, company had an Order Book of ₹ 19025.81 Crores which comprised 16 road EPC projects, 10 HAM projects and three other projects.
  • In April 2021, it has completed 100+ road construction projects successfully, and currently, 4 BOT projects are under construction.
  • The company owns and operates 3 manufacturing facilities at Udaipur (Rajasthan), Guwahati (Assam), and Sandila (Uttar Pradesh) and has a fabricating and galvanization unit at Ahmedabad, Gujarat.
  • As of March 31, 2021, the company had 16,233 permanent employees.
Welcome to Gr Infra

GR Infra IPO: Financials

Particulars / (₹ In Cr)202120202019
Revenue from Operations7,844.136,372.705,282.58
Revenue Growth (%)23.09%20.64%
EBITDA1,912.541,637.081,326.31
EBITDA (%)24.19%25.49%24.90%
Profit Before Tax1,324.641,154.081,007.69
Net Profit953.22800.83716.64
Net Profit Margin12.06%12.47%13.46%
Equity Share Capital48.3548.4848.48
Other Equity 3,931.682,978.672,181.20
Net worth 3,980.033,027.152,229.68
FV in Rs. 5.00  
EPS (₹ )98.3182.5973.91
RoNW (%)23.95%26.45%32.14%
NAV(₹ )411.63312.2229.95
IPO Price837
FY21 EPS98.57
PE 8.49
Market Cap in Rs. Cr. 8093.79
Market Cap  /  Sales1.03

Pros

GR Infra Projects Limited

  • Focused EPC player with primary focus on road projects.
  • Established track record of timely execution with cost over runs.
  • in-house integrated model;
  • Strong financial performance and credit rating;
  • Experienced Promoters with strong management team.

Cons

  • Uncertain risks form COVID-19 pandemic.
  • Company’s business is capital intensive.
  • Company may be vulnerable to the risk of rising and fluctuating steel, bitumen, cement and other raw material prices.
  • Company will not receive any proceeds from the IPO Offer.

GR Infra IPO: Assessment

  • With government’s focus on infrastructure in the country, the road construction space will continue to see new projects. GR Infra with its efficient operations is well placed to benefit from the growth in this sector
  • Amongst the EPC players, GR Infra was the fastest growing company, reporting an operating income growth of 47% CAGR over the period FY2015-20.As per RHP, in terms of profitability, GR Infra reported highest growth in EBITDA and reported PAT among the EPC players. Between FY18-21, company’s revenue clocked 34% CAGR growth, with PAT growing at 32% CAGR during the 3 years.
  • Future profitibailty may be affected by increase in c cost of construction materials, cement, steel, fuel, labour and equipment which constitutes a significant part of company’s operating expenses.
  • As of 31st Mar. 2021, the company had an order book of Rs. 19,026cr. This order book is 2.7 times of the construction services income. The orderbook comprising of 16 road EPC projects, 10 HAM projects and three other projects, spanned across the states of Uttar Pradesh, MadhyaPradesh, Maharashtra, Gujarat, Chhattisgarh, Rajasthan, AndhraPradesh, Bihar, Manipur, Odisha, Himachal Pradesh, West Bengal,Andaman & Nicobar Islands, Jharkhand and Sikkim.
  • Orders from NHAI constituted around 87.2% of the order book.
  • GR Infra Projects is L1 with bid of ₹ 592.18 crore for the proposed project relating to the ‘Construction of the elevated viaduct from end of the ramp at IDPL complex to start of ramp at Rajiv Chowk and three nos. of elevated stations, Udyog Vihar, Sector 17 and Rajiv Chowk (excluding architectural finishing and pre-engineered steel roof structure of stations) of Delhi – SNB Regional Rapid Transit System Corridor.
  • GR Infra Projects has a good order book. Order book for key players is depicted below.
CompanyOrder Book in Rs. Million as of 31st Dec’2020% of order book from RoadsSectors
Ashoka Buildcon91,51575.6Roads, Railways, Power, Bridges, City Gas Distribution (CGD)
Dilip Buildcon2,61,41043.72Roads, Mining, Irrigation, Metro, Airport, Bridges, Tunnel
   Roads, Bridges, Railways, Airport, Manufacturing activities relating to
GR Infraprojects2,22,54098.28construction
Hindustan construction company1,85,41051Bridges, Power, Roads, Metros, Ports, Irrigation, Water supply projects
KNR Constructions76,63755Bridges, Roads, Irrigation projects, urban development
PNC Infra98,52099Roads, Bridges, Power, Airport, Industrial area development
Sadbhav Engineering96,82776.56Roads, Mining, Irrigation
  • GR Infra has an established track record of efficient project management and execution aided by trained and skilled manpower, efficient deployment of equipment and an in-house integrated model. This has enabled them to compete projects prior to scheduled timelines.
  • GR Infra broad comparison with Peers:
Name of the CompanyFVTotal Income (₹ Cr)Market price (₹) on  25 Jun, 2021EPSNAVP/ERoNW (%)
G R Infraprojects Ltd57906.9483798.31411.638.490.2395
KNR Constructions Ltd22,955.26220.2514.4969.6715.220.79%
PNC Infratech Ltd25,898.89249.9519.37119.0112.916.28%
HG Infra Engineering Ltd102,617.10384.1536.31163.0410.5822.27%
Dilip Buildcon Ltd1010,210.50555.9531.92248.5817.427.84%
Ashoka Buildcon Ltd55,121.87104.49.8422.0610.6144.60%
IRB Infrastructure Developers Ltd105,487.53162.33.33196.3548.741.70%
Sadbhav Engineering Ltd13,862.1676.0546.2193.31.6549.53%
  • At upper price band of Rs. 837, GR Infra is demanding a P/E of 8.5x which is at discount to the peer average. The average industry P/E (price to earnings) stands at 16.73 times. Thus the issue seems to be attractively priced.
  • GR Infra projects IPO was last reported to be commanding a GMP of Rs. 350 as on 04-07-21.
  • PE investor Motilal Oswal iis making a complete exit in the GR Infra IPO after a 10 year investment with handsome gains.
  • I intend to apply in GR Infra Projects IPO. The GR Infra IPO looks quite good both from the angle of listing gains as well as medium term/ long term portfolio. The company has good internal systems, an integrated approach to projects, focus on operational efficiency, low debt levels and has over the years demonstrated financial discipline coupled with strategy to monetize assets.

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. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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