Vishnu Prakash R Punglia IPO subscribed over 6.1 times on Day 2 so far

The Rs 309-crore initial public offering (IPO) of Vishnu Prakash R Punglia continued to witness a strong response from the investors during the second day of the bidding process. The issue, which kicked off for subscription on Thursday, August 24, was subscribed over 3.8 times on the first day.

Vishnu Prakash R Punglia is selling its shares in the range of Rs 94-99 apiece during the three-day bidding process and investors can make a bid of a minimum of 150 equity shares and its multiples thereafter. The issue is entirely a fresh offering of up to 3.12 crore equity shares.

According to the data, the investors made bids for 13,44,39,600 equity shares, or 6.13 times, compared to the 2,19,30,000 equity shares offered for the subscription by 12.30 pm on Friday, August 25, 2023. The issue closes for subscription on Monday, August 28.

The portion of retail investors sailed through with a subscription of 8.07 times, while the allocation for non-institutional bidders fetched 9.85 times bids. The employee reservation was subscribed 3.07 times but the quota for qualified institutional bidders (QIBs) was booked merely seven per cent at the same time.

Incorporated in 1986, Jodhpur-based Vishnu Prakash R Punglia is engaged in the business of designing and constructing infrastructure projects for the central and state governments, autonomous bodies, and private bodies across nine states and one union territory in India.

The company's principal business operations are broadly divided into four categories namely water supply projects, railway projects, road projects and irrigation network projects. It has been accredited with various registrations as a contractor with various departments and agencies.

Majority of the brokerage firms are positive on the issue and have suggested subscribing to it citing its robust order book, strong execution, healthy financial, growth prospects and attractive valuations for the investors. However, dependency on government projects, high working capital and increasing competition are the key challenges.

Based on the Fiscal 2023 Financials, the IPO is fairly valued against the peers at 9.51 times PE , 9 times EV/EBITDA and 1.2 times EV/Sales on the upper band. The company’s net profit surged 102 per cent YoY to Rs 90.64 crore in FY23 from Rs 44.85 crore in FY22, said Hensex Securities.

"Its revenue from operations has grown at a CAGR of 55.10 per cent from FY 21-23, with the help of their robust order book across different business segments and geographical regions. The company has good control of operations in the state of Rajasthan. The company caters in a well - diversified and controlled market," it added with a subscribe for listing gains as well as for long-term.

A day before the issue, Vishnu Prakash R Punglia mobilized Rs 91.77 crore by allocating 92.7 lakh shares at Rs 99 apiece to 13 anchor investors on Wednesday, the company said. Quant Mutual Fund, Max Life Insurance, Kotak Mahindra Life Insurance, Societe Generale, Minerva Emerging Opportunities Fund, Copthall Mauritius Investment, and BNP Paribas Arbitrage participated in the anchor book.

The company has reserved 50 per cent of equity shares for qualified institutional bidders, while non-institutional investors will have 15 per cent of reservation for them. Remaining 35 per cent shares will go to the retail investors of the company.

Mehta Equities believes that the company is well-positioned within the Indian infrastructure sector, benefitting from government initiatives and a substantial order book of Rs 3,799.53 crore as of July 15, 2023. With over 36 years of experience, the company has a proven track record in executing Water Supply Projects (WSPs), enjoying a visible growth trajectory across segments.

"Its unique in-house integrated approach not only reduces dependence on external sources but also enhances the efficiency of material logistics, thereby strengthening project management. We recommend considering a long-term investment in the company, acknowledging both its growth potential and the inherent industry-related risks," it added.

Choice Capital Advisors and Pantomath Capital Advisors are the book running lead managers and Link Intime India has been appointed as the registrar to the issue. Shares of the company are proposed to be listed on both BSE and NSE tentatively on September 5, 2023.


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