Infra EPC Player, Vishnu Prakash R Punglia Ltd files DRHP with Sebi for IPO

Jodhpur-based Vishnu Prakash R Punglia Limited (VPRP) is an ISO certified integrated Engineering, Procurement and Construction (“EPC”) company, which specializes in Water Supply Projects (WSPs) has filed its Draft Red Herring Prospectus (DRHP) with the capital markets regulator, SEBI, to raise funds through an initial public offering (IPO).

The Company has experience in design and construction of major infrastructure projects for the Central and State Governments, autonomous bodies, and private bodies with on-going projects at nine states.

The public issue with a face value of Rs 10 per equity share is a complete fresh issue of shares up to 31.20 million with no offer-for sale component. The offer also includes a reservation for a subscription by eligible employees.

The Offer is being made through the Book Building Process, with maximum 50% allocation to Qualified Institutional Buyers, minimum 15% to Non-Institutional Investors and minimum 35% to Retail Individual Investors.

The proceeds from its fresh issuance, to the extent of Rs 58.64 crore will be utilised for purchasing capital equipment, Rs 140 crore will be used for funding the working capital requirements of the Company; and the balance for general corporate purposes.

Led by Promoter, Mr. Vishnu Prakash Punglia, the Company has a strong operational understanding with a consistent track record in carrying out infrastructure projects for over three decades.  It owns a fleet of about 484 construction equipment assets which includes including crushers, excavators, loaders, dozers, paver machines, cranes, tractors and transportation vehicles from some of the leading suppliers.

The Company’s major activities 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 also undertakes operations and maintenance services.

While VPRPL will continue to have a focus on Water Supply Projects, where majority of its order-book currently is, the Company plans to diversify its expertise and continue its efforts to bid for Infrastructure EPC Projects pertaining to the Railways, Irrigation, Roadways besides others.

As on December 31, 2022, it has 51 on-going projects aggregating Rs 5,653.43 crore, of which Rs 1,816.81 crore worth of work has been executed and balance Rs 3,836.62 crore form part of the Order Book containing WSPs for execution across the states of Rajasthan, Uttar Pradesh, Manipur, Uttarakhand, Gujarat, Assam and Haryana.

The Company’s revenue from operations increased from Rs 373.15 crore in FY 2019-20 to Rs 785.61 crore in FY 2021-22 at a Compounded Annual Growth Rate (“CAGR”) of 45.10%, while the profit for the year increased from Rs 12.66 crore in FY 2019-20 to Rs 44.85 crore in FY 2021-22 at a CAGR of 88.25%. EBITDA has grown at a CAGR of 48.54% from Rs 40.18 crore in FY 2019-20 to Rs 88.64 crore in FY 2021-22.

For the nine months ended December 31, 2022 revenue from operations stood at Rs 712.70 crore and profit after tax stood at Rs 50.74 crore, whereas EBITDA margin stood at 13.13%.

The Company has the highest return on net worth of 32.94% when compared to its listed peers, PNC Infratech Ltd (17.37%), H.G. Infra Engineering Ltd (30.42%), NCC Limited (9.17%), Rail Vikas Nigam Ltd (19.66%), ITD Cementation India Ltd (6.31%).

The Infrastructure sector acts as a catalyst for India’s economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure and construction development projects. In order to become a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour. The Government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India’ and the production-linked incentives (PLI) scheme to augment the growth of infrastructure sector. Historically, more than 80% of the Country's infrastructure spending has gone towards funding for transportation, electricity and water & irrigation. Centre’s share in NIP is 39% whereas State and Private sector’s share is 39% and 22% respectively, sourced from CareEdge Report.

The Government of India launched the Jal Jeevan Mission (JJM) on August 15, 2019, with the intention of providing Functional Household Tap Connections (FHTC), with access to safe and adequate drinking water, to every rural home in the nation by 2024. According to a CareEdge Report mentioned in the DRHP, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0 aims to make water in cities secure and self-sustaining through water source conservation, rejuvenation of water bodies and wells, recycling and reuse of treated used water, and rainwater harvesting.

Choice Capital Advisors Private Limited and Pantomath Capital Advisors Private Limited are the book running lead managers. The equity shares are proposed to be listed on BSE and NSE.