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Vishnu Prakash R Punglia IPO entails to raise Rs 309 crore through a fresh issue of 312 lakh shares . Jodhpur base, Vishnu Prakash R Punglia Limited is an integrated engineering, procurement and construction (“EPC”) company with experience in design and construction of various infrastructure projects for the Central and State Government, autonomous bodies, and private bodies across 9 States and 1 Union territory in India.

About Vishnu Prakash R Punglia Limited:

• The Company is promoted by Vishnu Prakash Punglia, Manohar Lal Punglia, Sanjay Kumar Punglia, Kamal Kishor Pungalia and Ajay Pungalia
• It is an ISO 9001:2015 certified integrated engineering, procurement and construction (“EPC”) company with experience in design and construction of various infrastructure projects for the Central and State Government, autonomous bodies, and private bodies across 9 States and 1 Union territory in India. Our principal business operations are broadly divided into four categories:
• (i) Water Supply Projects (“WSP”);
• (ii) Railway Projects;
• (iii) Road Projects and
• (iv) Irrigation Network Projects.
• Its major projects include constructing, designing, building, implementing, operating, maintaining and developing Water Supply Projects (“WSPs”) including Water Treatment Plants (“WTPs”) along with pumping stations and laying of pipelines for supply of water, as well as other projects such as Roads, Bridges, Tunnels, Warehouses, Buildings, Railway Buildings including platforms, stations, quarters, administrative buildings, Rail-Over-Bridges and Waste Water Treatment Plants (“WWTPs”).
• it is increasing diversifying into areas such as Railways, Irrigation, and Industrial Effluent Treatment Plants.
• More details of its activities:
  • The Water Sector projects includes works like Water dams, Water Tanks, Reservoirs, Water Treatment Plants, Water supply schemes, Overhead tanks, Pipelines, Irrigation Channels etc.,
  • Sewerage Sector includes activities like Sewerage treatment Plants, Sewer Tank drain,
  • Railway Sector, which includes all Railway works like Railway Tracks, Railway Stations and allied buildings, Platforms and Bridges
  • Road Sector, which includes Development of roads and highways, bridges and Flyovers
  • Tunnelling Works
  • Buildings and Ware Houses Works
  • Multi-dimensional Smart City Projects.
  • Automation work involving PLC and SCADA.
  • Besides above-mentioned Project Development activities it has house manufacturing activity for captive consumption of (i) Ready-Mix Concrete to prepare a single mixture of design grade cement concrete to be available at the construction sites, (ii) crusher unit for crushing of stones to prepare aggregates, and (iii) hot mix plant to process bitumen.

Vishnu Prakash R Punglia Limited: Financials

Anchor Investors: Partial List

Vishnu Prakash R Punglia IPO: Salient Points

• As on Dec 31, 2022, Only 55% of the households in the country have access to tap water supply.
• The GoI along with the States is implementing Jal Jeevan Mission – Har Ghar Jal. This program aims at providing potable water in adequate quantity of prescribed quality on regular and long-term basis to every rural household, through tap water connection, by 2024 with an estimated outlay of ₹3,600 Billion.
• There is increase in schemes in recent times, by the Government towards improving water supply as well as water sewage infrastructure in India. Schemes like Jal Jeevan Mission(JJM), Jal Shakti, Atal Bhujal Yojana have been set up in the last 7 years. In FY24 Budget, allocation for JJM/National Drinking Water Mission has increased to ₹700 Billion, an increase of 27.3% from ₹550 Billion in FY23.
• A significant portion of the projects executed by the company are in the Water Supply Projects (“WSP”) segment. (~85%). order book wise 78%. Thus it should benefit for above mentioned schemes of Government.
• Apart from EPC projects related to water supply, it is expanding into new areas such as Railways, Irrigation, and Industrial Effluent Treatment this widening its coverage in the infrastructure space.
• Business is concentrated in the state of Rajasthan. As of July 15, 2023, its ongoing projects in Rajasthan state constitute ₹ 23,381.83 millions (61.54%) of the pending Order Book.
• Company proposes to utilise the Net Proceeds towards funding the following objects:

• Sub-contracting charges form 47.24% of the revenue.
• due to i-house manufacturing capacities, it is able to considerably reduce the Project Cost
• While its executes majority of the projects on its own, it also forms project-specific joint ventures and consortiums with other entities in the infrastructure and construction business. For instance, when a project stipulates certain specific eligibility requirements such as type of experience and expertise, it bids for such projects through joint venture entities formed for being eligible to bid for such specific projects.
• Percentage of Revenue from joint venture projects in FY23 was about 21.34%.
• Vishnu Prakash R Punglia Limited business is dependent upon infrastructure projects undertaken by governmental authorities including State PHEDs, WRD, PWDs, Railways, MoRTH and NHAI. As of July 15, 2023, its total Order Book was ₹ 3,799 crore, entirely comprising of projects awarded by governmental authorities.
• Credit rating of the company has shown a slight improvement over the years.

• Vishnu Prakash R Punglia has completed more than 85 projects till date and 51 projects are ongoing as on July 15, 2023.
• it is increasing focus or expanding into new functional areas such as Railways, Irrigation, and Industrial Effluent Treatment Plants that will allow it to consolidate its position in the infrastructure space.
• On the flip side there are risks related to implementation in EPC projects which includes delays, lack of available fronts, encashing of Bank guarantee for performance reasons by clients, risk of litigation or getting debarred.
• Company has clocked 38% RoE in FY23.
• Its revenue grew at 46% CAGR from FY2020-23, while PBT recorded CAGR of 88% .
• On FY23 earnings Vishnu Prakash R Punglia IPO is valued at 13.6x P/E.
• Iam likely to apply in the Vishnu Prakash R Punglia IPO due to healthy revenue visibility, expected traction from Govt. schemes in the area of water and sewage treatment, Track record of successful completion of EPC projects and Geographically spread out order book mainly in west part of the country. ,
• Being a small issue, reasonable valuations, and current state of market, Vishnu Prakash R Punglia IPO could see heavy subscription.
• GMP as reported on social media is around Rs. 54.
• Please do your own diligence. There is good amount of risk in all equity investments.
• 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.