Vishnusurya Projects and Infra IPO Review: Vishnusurya Projects and Infra Limited is coming up with its Initial Public Offering. This is an SME (small and medium size enterprise) which is going to be listed on NSE SME.
The IPO will open for subscription 29th September 2023, and closes on 4th October 2023. This review will delve in about the company and their financials, GMP, strengths and weaknesses. Keep reading for more details!
Table of Contents
Vishnusurya Projects and Infra IPO Review – About The Company
Vishnusurya projects and Infra limited was established in 1996, operates in three primary business verticals:
Mining and Manufacturing: The company engages in the mining of rough stones and the manufacturing of aggregates and manufactured sand through the use of crushing and sand washing plants. It owns and operates two quarries located in Tamil Nadu, India.
Construction and Infrastructure: In addition to mining, the company undertakes EPC (Engineering, Procurement, and Construction) projects. This includes detailed engineering, procurement of key materials, project execution, and overall project management up to commissioning.
The company has delivered projects across various sectors such as water, transportation, rail, resource, and institutional development. It has also completed multiple real estate projects including villas, multi-storied apartments, compound walls, renovation works, site formation, etc.
Projects – The company has executed 17 projects recently, including 10 civil construction projects, one road construction project, and six infrastructure-related projects with a total value of Rs. 13,619.06 Lakhs. It continues to work on various government, semi-government, commercial and infrastructure projects on both owned and sub-contract basis.
Drone Services: The company also provides integrated solutions for drones used for surveillance, mapping, and surveying purposes.
Revenue- The company’s revenue is generated from the sale of construction aggregates (56.53%), construction and EPC services (27.18%), and other operating revenue (16.2%)
Vishnusurya Projects and Infra IPO Review – Industry Overview
The Indian infrastructure industry, one of the largest and fastest-growing globally, is projected to grow at a CAGR of 9.57% from 2023 to 2028. This growth is driven by urbanization, industrialization, and significant government investments, such as the US$ 1.3 trillion Gati Shakti national master plan for infrastructure. The “Smart Cities Mission” and “Housing for All” programmes have also benefited from these initiatives.
In the 2023-24 budget, the capital investment outlay for infrastructure has been increased by 33% to Rs.10 lakh crore (US$ 122 billion), equivalent to 3.3% of GDP. The National Infrastructure Pipeline (NIP) project count now stands at 9,142, covering 34 sub-sectors, up from the initial 6,835 projects.
India plans to spend US$ 1.4 trillion on infrastructure through the NIP over the next five years to reach its goal of a US$ 5 trillion economy by 2025. More than 80% of the country’s historical infrastructure spending has been allocated to transportation, electricity, and water & irrigation sectors.
The Unmanned Aerial Vehicle (UAV) or drone industry in India, initially used for military purposes, has found commercial and civilian applications in sectors like power, agriculture, infrastructure, telecom, and mining due to advancements in robotics, artificial intelligence, miniaturisation, automation, thermal imaging, materials science etc.
India accounts for 22.5% of total global drone imports and is predicted to be the world’s third-largest drone market by 2025. The Indian UAV industry was valued at US$ 830 million in FY 2020 and is estimated to expand at a CAGR of 14.5% between 2021-26.
Vishnusurya Projects and Infra IPO – Financial Highlights
Vishnusurya projects and Infra has shown significant growth over the years. The company’s assets have increased from INR 95.94Cr in March 2021 to INR 121Cr in March 2023. Similarly, revenue has seen a substantial rise from INR 63.3Cr in March 2021 to INR 133.2Cr in March 2023.
The net worth of the company has also grown impressively from 35.7Cr in March 2021 to 59.5Cr in 2023. Profit After Tax (PAT) has improved from 4 Cr in March 2021 to INR 16.5Cr in March 2023.
However, it’s important to note that the company’s borrowing has also increased from INR 14.7Cr in March 2021 to INR 36.2Cr in March 2023, with a debt to equity ratio of 1.03.
The company has demonstrated strong financial performance with a Return on Equity (ROE) of 27.8% and Return on Capital Employed (ROCE) of 31.22%
FINANCIAL METRICS:
(Source: RHP of the company)
Competitors of the Company
The industry in which the company operates is both fragmented and highly competitive. Some of the notable peers in this industry include Rachana Infrastructure Limited, Sonu Infratech Limited, and AB Infrabuild Limited.
Strengths of the Company:
- Vishnusurya Projects and Infra is recognized for its strong emphasis on construction projects, including roads, waterways, bridges, and flyovers. This focus has led to the acquisition of technical expertise in managing projects of different sizes and complexities, as evidenced by a substantial order book value of 23,550 lakh.
- Vishnusurya Projects has successfully diversified into mining, construction, and drone technology sectors. The company’s clientele spans various government and semi-government organizations, as well as commercial and infrastructure projects. Operations are conducted on both an ownership and subcontracting basis.
- The strength of the company lies in robust project management capabilities, high-quality construction standards, and a skilled workforce that ensures timely project execution. A dedicated in-house team of 27 engineers contributes to the company’s design and engineering prowess.
- Vishnusurya Projects possesses mines and crusher plants in two key locations in Tamil Nadu: Arupukottai and Vandavasi. These facilities cater to several districts, including Madurai, Thirunelveli, Thuthukudi, Ramanathapuram, and Chennai. The strategic placement of these operations allows the company to uphold competitive pricing.
Weaknesses of the Company:
- Vishnusurya Projects and Infra’s business and profitability are significantly dependent on the performance of the construction and infrastructure industry, particularly in the Tamil Nadu Region of India. Any economic, natural, or policy changes in this region could adversely affect the business due to its geographic concentration.
- The company’s inability to complete ongoing and forthcoming projects by their expected completion dates could have a material adverse effect on the business.
- Vishnusurya Projects relies heavily on third-party vendors for principal construction materials such as cement, sand, steel, brick, and ready-mix concrete. Any significant increase in prices, including taxes and levies, or any shortage, delay, or disruption in the supply of these materials, contract labor, and equipment could negatively impact the business.
- The company operates in the Drone industry, which is subject to a substantial degree of risk due to rapidly evolving changes in technology and industry needs. Failure to keep pace with clients’ needs or respond to changes in technology could affect the revenue of the business.
Vishnusurya Projects and Infra IPO Review – GMP
The IPO for Vishnusurya Projects and Infra is set at a price of ₹68. As of 27th September 2023, The latest grey market price stands at ₹35. The IPO is projected to list at a premium of 51.47%, with an estimated listing price of ₹103.
Vishnusurya Projects and Infra IPO Review – Key IPO Information
| PARTICULARS | DETAILS |
|---|---|
| IPO Size | 49.98Cr |
| Fresh Issue | 49.98Cr |
| opening date | 29th September 2023 |
| closing date | 4th october 2023 |
| face value | ₹10 per share |
| price band | ₹68 per share |
| lot size | 2000 shares |
| Minimum lot | 1 (2000 shares) |
| maximum lot | 1 (2000 shares) |
| Investment amount | ₹136,000 |
| listing date | 13th october 2023 |
Promoters: Bhavani Jayaprakash is the Promoter of the Company
Book Running Lead Manager: Khandwala Securities limited
Registrar to the Offer: Cameo corporate services limited
The Objective of the Issue:
The company intends to utilize the net proceeds from the issue towards the funding of the following objects:
- Funding of working capital requirements of the Company.
- Repayment / Prepayment, in part or full, of certain outstanding borrowings availed by the Company.
- General Corporate Purposes
In Closing
Vishnusurya Projects and Infra, with its strong focus on infrastructure projects and plans for geographical expansion, has demonstrated significant growth and technical prowess.
However, challenges such as a high debt-to-equity ratio, reliance on a specific geographic region, and the need to keep pace with rapidly evolving technologies like drones, present potential risks. The company’s future success hinges on its ability to effectively navigate these challenges while leveraging its strengths.
However it is important to note that this is an SME IPO where the minimum investment amount is ₹1,36,000 Which is higher than mainline IPO.
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written By Niharika jadhav
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