Vishnu Prakash R Punglia IPO opens for subscription. Should you bid?
The company has fixed a price band of Rs 94-99 per share and investors can bid for a minimum of 150 shares in one lot and in multiples thereafter.
Analysts recommended investors to subscribe to the issue as the company has a healthy order book and industry tailwinds are expected to aid its profitability in the coming years.
«On the valuation front, we believe the company is fairly priced. We recommend a „subscribe–long term“ rating to the IPO,» said Anand Rathi.
Vishnu Prakash R Punglia is a construction company that is primarily engaged in infrastructure projects for the central and state governments.
The company is focused on water supply projects and is benefiting from various government initiatives.
As of July 15, 2023, the company had 51 ongoing projects with a total work awarded amounting to Rs 6,183 crore, of which Rs 2,384 crore worth of work has been executed and the remaining work amounting to Rs 3,799 crore constitutes the order book.
The equipment fleet comprised about 499 construction equipment and vehicles, as of March 2023. Further, the aggregate gross block value of the company’s property, plant and equipment was Rs 136 crore.
Swastika Investmart said the company faces stiff competition and high working capital requirements and that there is also the risk of project implementation delays and cost overruns.
Despite the negatives, the brokerage advised investors to subscribe to the IPO over fair valuations and overall bullishness in the infra sector.
At the upper price band of Rs 99, VPRPL is available at a P/E of 13.6x (FY23), which appears to be fairly priced compared to its peers, said Geojit Financial Services.
«The consistent topline growth and operational efficiencies, experience of over three
