Udayshivakumar Infra IPO to open on March 20; grey market premium at ₹7 a share

• Udayshivakumar Infra is all set to open its initial public offering (IPO) next week on March 20 and will close on March 23.
• The price band of the IPO is set at ₹33 - ₹35 per share.
• Udayshivakumar Infra is in the business of constructing roads, bridges and irrigation projects in Karnataka, including for government departments.
• The shares of the company are currently commandin a grey market premium, or GMP, of ₹7 per share.

The Karnataka-based road construction company Udayshivakumar Infra will open its ₹66 crore initial public offering (IPO) next week on March 20 and will close on March 23.

The IPO is set to launch amid heightened equity market volatility mirroring global markets, which have been roiled by a banking crisis triggered by the collapse of Silicon Valley Bank in the US last week, quickly followed by turmoil in Swiss lender Credit Suisse.

The price band of the IPO is set at ₹33 - ₹35 per share. The shares of the company are currently commanding a grey market premium, or GMP, of ₹7 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

It aims to raise ₹66 crore from the public through fresh issue of shares. The offer does not include any shares sold by promoters or other existing shareholders. The funds raised through the IPO will be utilised towards funding incremental working capital requirements, besides general corporate purposes.

The company’s shares will be allotted to investors on March 28 and will be listed on the stock exchanges on April 3.

Gets 81% of its revenue from top 10 clients
Udayshivakumar Infra is in the business of constructing roads, bridges and irrigation projects in Karnataka, including for government departments. It aims to gradually expand its business operations in other Indian states.

The company has 46 work orders in hand that aggregate to an order book of ₹1,290 crore as on December 31, 2022.

It is entirely owned by chairman and managing director Udayshivakumar who owns 98.97% stake in the company while 1% stake is held by his wife Amrutha.

Udayshivakumar Infra’s business is concentrated in the state of Karnataka – it generates its entire revenue from projects in the state. Moreover, it receives 81% of its revenue from the top ten customers.

“We derive a significant portion of our revenues from a limited number of clients. The loss of any significant clients may have an adverse effect on our business, financial condition, results of operations, and prospects.”

The company’s aggregate outstanding indebtedness was at ₹49.88 crore as on December 31, 2022. Its profits have improved by 33% from a year earlier to ₹12 crore in FY22.

Financial performance
Source: RHP

Udayshivakumar Infra has reserved 60% equity shares for retail investors, 30% for non-institutional investors and the remaining 10% of the equity shares for qualified institutional bidders.


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