K2 Infragen IPO (NSE SME) IPO Overview

K2 Infragen Limited is an integrated engineering, procurement and construction (“EPC”) with a focus on Power Engineering and Project Engineering having experience in design and construction of various projects. K2 Infragen IPO aims to raise Rs 40.54 crores. The issue is entirely a fresh issue of 34.07 lakh shares.

IPO opensMar 28, 2024
IPO ClosesApr 03, 2024
IPO Size (Rs.)₹40.54 Cr
IPO Size (shares)3,406,800 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹111 to ₹119 per share
Minimum Lot1200 Shares
Listing AtNSE SME
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerExpert Global Consultants
RegistrarKfin Technologies
Market makerRikhav Securities

About K2 Infragen Limited:

  • Company was originally incorporated as ‘K2 Powergen Private Limited’ in 2015 in Delhi.
  • Their business is broadly divided into below mentioned categories:
    • Engineering, Procurement and Construction (EPC)
      1. Contract Business
      1. Service Business
    • Trading Business
  • They manage projects ranging from Turnkey Water Supply Projects, Railway Projects, Road Projects and Civil Construction Work having experience in design and construction of various projects across 8 States in India viz. Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab & Delhi. 
  • They provide services across the value chain, ranging from design, procurement, construction supervision, subcontract management and work order management to post-construction activities to our clients.
  • As of the date of RHP, it had 61 employees on its payroll. 
  • Company is promoted by Mr. Pankaj Sharma, Ms. Priya Sharma, Mr. Rajesh Tiwari, Mr. Rajiv Khandelwal and Mr.Sarvajeet Singh.

Financials: K2 Infragen Limited

Particulars (₹ in Lacs.)2023 (06)2023 (12)2022 (12)2021 (12)
Revenue from Operations5,938.876,655.412,000.613,547.25
Profit After Tax611.831,128.03-299.7531.14
Share capital921.16224.43212.67158.13
Net Worth2,542.621,395.37128.52116.36
Earnings Per Share6.8815.31-5.890.81
Net Asset Value Per Equity Share27.662.176.047.35
Total Borrowings2,217.072,385.672,060.861,832.26
Post issue Share Capital1262   
FV10.0   
IPO price119.0   
EPS Fy238.9   
PE Fy2313.3   
EPS Fy24 (annualized)9.7   
PE Fy24  (annualized)12.3   
Market cap in Lacs15,018   
Market cap / Sales2.26   

Anchors: K2 Infragen Limited

K2 Infragen Limited: Salient Points

  • The India Infrastructure Sector Market size is expected to grow from USD 186.24 billion in 2023 to USD 294.12 billion by 2028, at a CAGR of 9.57% during the forecast period (2023-2028).
  • They are an integrated engineering, procurement and construction (“EPC”) with a focus on Power Engineering and Project Engineering having experience in design and construction of various projects across 8 States in India viz. Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab & Delhi. They provide services across the value chain, ranging from design, procurement, construction supervision, subcontract management and work order management to post-construction activities to clients.
  • The Net Proceeds are proposed to be utilized in the manner set forth below for the objectives of the IPO:
Sr. No.ParticularsAmount (₹ in Lakhs) *
1Working capital requirement;1,600.00
2Acquisition of Plant and Machinery;831.00
3General corporate purposes; and[●]
  • They have been accredited with various registrations as a contractor with various departments and agencies viz. Public Works Department, Rajasthan (Class AA), Public Works Department, Madhya Pradesh, Bhopal (Class AA), pursuant to which they are also eligible to participate and undertake projects awarded by various other departments and agencies.
  • Their client list include H.G Infra Engineering Ltd, Larsen & Toubro, Essel Group, KEC International, Dilip Buildcon Ltd, and PWD departments.
  • Company started with trading of non-ferrous waste products amid Covid19 pandemic when construction activities faced a sudden halt leading to limited revenue sources. Has continued with it.
  • Since incorporation of Company, has gradually increased capabilities in terms of the size of projects. The following table sets forth information relating to the number of Projects awarded to them:
Period Ended/FiscalNumber of ProjectsWork Order Amount (in Lakhs)
20162.0078.16
20175.00169.86
20186.00303.44
20197.001,760.60
20208.005,296.96
20216.00799.24
20227.001,599.71
20235.0026,886.12
  • Category Wise revenue for period ended September 30, 2023, and fiscal year 2023, 2022 and 2021:
  Category of Project Sept 30, 2023  Fiscal 2023  Fiscal 2022  Fiscal 2021
Civil Construction Work1,056.09159.71810.05892.72
Turnkey Water Supply Projects4,867.752,540.44NILNIL
Railway ProjectsNIL16.89NIL550.98
Road Projects15.04NIL369.12NIL
Grand Total5,938.882,717.041,179.171,443.70
  • Since incorporation till October 31, 2023,they have successfully executed 38 projects worth ₹ 10,444.68 Lakhs.
  • As of October 31, 2023, they have 15 ongoing projects aggregating to ~ ₹ 34,133 lakhs.
  • Peers: Recently listed AVP Infracon is trading at similar valuations. Company has shown Markolines Pavement, WS Industries, Udayshivakumar Infra as their listed peers. They are trading at a P/E of 16.4, 24.6, 13.5x.
  • K2 Infragen IPO is coming at a PE of 13.3x (FY23 earnings) and 12.3x(FY24 annualized earning)
  • I am neutral on this IPO and quite possible that I may not apply in K2 Infragen IPO.
  • GMP as reported on social media has been Rs. 25/-
  • Expert Global Consultants Private Limited is Lead Manager and their managed issues IPO Performance on listing has been average. In past they have handled IPOs of Royal Sense Limited, Mangalam Alloys Limited, Zeal Global Services Limited, Sonalis Consumer Products Limited, Dollex Agrotech Limited, Rite Zone Chemcon India Ltd.
  • SME IPO are much more risky and volatile than mainboard IPOs.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared 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.

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