Udayshivakumar Infra IPO looks to raise ~ ₹ 66 crore through this public offering. The price band for IPO has been fixed at Rs 33-35 a share. Udayshivakumar Infra IPO comprises a fresh issue of little less than two crore equity shares. Udayshivakumar Infra is a Karnataka focused construction player.
Issue Opens
20-Mar-23
Issue Closes
23-Mar-23
Issue Size (Fresh Issue)
18,857,142 Equity shares
Issue Size
₹ 66 Cr
Face Value
₹ 10
Price Band
₹ 33 – 35
Bid Lot
428 Shares
QIB
10% of the offer
NIB
30% of the offer
Retail
60% of the offer
BRLMs
Saffron Capital Advisors
Registrar
Mas Services Ltd
About Udayshivakumar Infra
Company was originally formed as a sole proprietorship under the name of ‘M/s Udayshivakumar’ at Davangere on August 22, 2002 and was converted into a partnership firm.
Udayshivakumar Infra is engaged in the business of construction of various road projects, such as national and state highways, various types of roads, such as district and smart roads, and various other road-building projects in Karnataka. The company has an in-house engineering team that deals with the building of roads, bridges, flyovers and irrigation projects.
It executes projects with Central Government, Karnataka state government and local bodies in the state of Karnataka, including National Highways, State Highways, District Roads, Smart Roads under PM’s Smart City Mission projects,Smart Roads under Municipal Corporations, Bruhat Bengaluru Mahanagara Palike (BBMP) and
Local Area Roads in various Taluka Places etc., in the State of Karnataka, Constructions of Bridges across Major and Minor Rivers, Railway Over Bridges (ROB), construction of Major and Minor Irrigation and canal projects, Industrial Areas, based in the State of Karnataka.
It bids for Roads, Bridges, Irrigation & Canals, Industrial Area construction in the State of Karnataka including Government Departments such as Karnataka Public Works Ports & Inland Water Transport Department (KPWP & IWTD), National Highways (MORTH), Belgaum Smart City Ltd. and Davangere Smart City Ltd., Bruhat Bengaluru Mahanagara Palike (BBMP), Various Municipal City Corporations, State Highway Development Corporations Ltd., (SHDP), Karnataka Road Development
Corporation Ltd., (KRDCL), Karnataka Industrial Area Development Board (KIADB), Davanagere Harihara Urban Development Authority (DHUDA), Krishna Bhagya Jala Nigam Limited (KBJNL), Visvesvaraya Jala Nigam Limited (VJNL), Carvery Niravari Nigam Limited (CNNL), Karnataka Niravari Limited (KNNL), Youth Empowerment & Sports Department, in the State of Karnataka.
Additionally it has set up seven manufacturing units for producing ready-mix concrete, which is used in own projects and is also sold to third parties.
The company’s equipment base comprises of 111 construction equipment, 46 dumpers, 51 other construction vehicles, 7 Ready Mix Concrete (RMC) Plants . Also, they have 1 stone quarry owned by M/s. Udayshivakumar Stone Crusher.
As on December 31, 2022, it employed 52 skilled and 120 on-site workers such as drivers, JCB operators, helpers etc for executing various projects.
Udayshivakumar Infra IPO: Financials
Particulars / Rs. Cr
H1FY23
2022
2021
2020
Revenue from Operations
106.61
185.63
210.4
193.61
Revenue Growth (%)
–
-11.77%
8.67%
–
EBITDA as stated
17.31
24.89
23.63
25.07
EBITDA Margin (%)
16.24%
13.41%
11.23%
12.95%
Profit Before Tax
13.22
16.01
12.32
14.19
Net Profit After Tax
10.02
12.15
9.32
10.49
Net Profit (%)
9.40%
6.54%
4.43%
5.42%
Equity Share Capital
36.5
36.5
36.5
36.5
Reserves
41.84
31.82
19.68
10.37
Net worth
78.34
68.32
56.18
46.87
EPS – Basic & Diluted (₹)
2.75^
3.33
2.55
2.87
RONW (%)
12.79%^
17.78%
16.59%
22.38%
NAV (₹)
21.46
18.72
15.39
12.84
ROCE (%)
12.62%
20.71%
21.74%
23.91%
Net Debt/EBITDA
1.2
0.45
1.07
1.34
Post Issue share Cap
55.36
FV in Rs.
10
IPO price
35
EPS FY22
2.19
PE Fy22
15.95
EPS Fy233 (ann)
3.62
PE Fy23 (ann)
9.67
Market cap in Lacs
194
Market Cap/sales
0.91
Udayshivakumar Infra IPO: Salient Points
As on December 31, 2022, its Order Book was ₹ 1,29,038.73 lakhs
As on December 31, 2022, the company is executing 30 ongoing projects which include 10 roads, 7 smart roads, 1 bridge, 8 irrigation projects, 3 civil construction works and 1 toll plaza with an aggregate order book value of ₹ 853.88 crore.
Compnay has ventured into iron ore mining in Bellary,
Company has started toll collection at 2 road projects in H1FY23.
Risks
There is a pending GST matter with 42.6 cr GST amount under litigation and to be taken from Govt bodies.
Business requires significant amount of working capital primarily as a considerable amount of time passes between purchase of raw materials and collection of receivables post sales to customers.
The company availed vehicle loans from John Deere Financial India, SREI Equipment and Hinduja Leyland Finance. It opted for moratorium benefits as part of the reliefs offered by Govt. during the COVID-19 pandemic.
There is also demand from Income Tax.
Peers
Name of the company
FV (₹ per share)
Revenue FY 2022 (in lakhs)
PE
ROCE (%)
PAT Margin Fy22
Udayshivakumar Infra
10
18,562.92
9.67
20.71%
6.54%
KNR Constructions
2
3,60,582.24
17.9
19.37%
10.16%
PNC Infratech
2
7,20,803.56
9.66
16.42%
8.05%
HG Infra
10
3,75,143.10
11.8
26.26%
10.13%
IRB Infrastructure Developers Limited
10
5,80,370.00
20.3
88.00%
6.23%
Udayshivakumar Infra IPO: Assessment
The Construction capex is projected to rise 13-16% on year in fiscal 2023 led by infrastructure segment To Rs. 10.6 to 10.8 lakh crore. The rise is in keeping with the Govt’s focus on infrastructure as visible in rising central and state budget allocations to capex.
Its business is primarily dependent on projects undertaken or awarded in the state of Karnataka in India, b with a vary large share of orders coming from local authorities/municipal bodies in the state of Karnataka.
Udayshivakumar Infra is pre-qualified to bid independently on projects tendered by departments of Central Government and State Government and other entities, of contract value up to ₹ 25,050.00 lakhs for EPC contracts and ₹ 95,629.98 lakhs for BOQ contracts based on our technical and financial capacity as on December 31, 2022.
In addition to independently undertaking projects, the company intends to enter into joint ventures with other infrastructure companies in their industry to jointly bid and execute larger projects.
It has availed vehicle loans from HDFCBank Limited, Canara Bank, Daimler Financial Services India Private Limited, Hinduja Leyland Finance Limited, HDB Financial Services, John Deere India Private Limited, SREI Infrastructure Finance Limited and State Bank of India Limited.
Over the last 3 fiscals, the company has reported a mixed set of financial results.
The issue is quite small in size and there are issues like operating only in one state and questions of GST recovery from Government bodies.
Social media reports indicate a GMP of about Rs. 10.
PE ratio is 16x (FY22) and 9.8x (fy23 annualized basis).
I intend to apply in Udayshivakumar Infra IPO though the fundamental look just average.
Udayshivakumar Infra will list in T group. The purpose of T group is mainly to limit speculative movements but it is now days used by operators to their advantage and sometimes increases speculative activities.
Please do your own diligence as IPOs in past have not given much listing gains to investors and have many times ended in losses.
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.
