Vishnu Prakash R Punglia’s IPO to open on August 24, price band at ₹94-₹99

• The IPO of construction company Vishnu Prakash R Punglia will open on August 24 and close on August 28.
• The company aims to raise as much as ₹308.88 crore via a fresh issue of shares.
• The net proceeds will be used to purchase capital equipment, fund working capital needs and for general corporate purposes.
  

Construction company Vishnu Prakash R Punglia has fixed the price band at ₹94-99 per equity share for its maiden public offer. The initial public offering (IPO) will open on August 24 and close on August 28.

Investors can bid for a minimum of 150 equity shares and in multiples thereafter. The Jodhpur-based company is an integrated engineering, procurement and construction (EPC) company, which specializes in water supply projects.

The company aims to raise as much as ₹308.88 crore at the upper end of the price band. It is completely a fresh issue of 31.2 million shares, without an offer-for-sale component.

Choice Capital Advisors Private and Pantomath Capital Advisors are the book running lead managers and Link Intime India is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

About the company

The company owns a fleet of about 484 construction equipment assets like crushers, excavators, loaders, dozers, paver machines, ready mix concrete plants, concrete mixtures, cranes, tractors and transportation vehicles.

Its major activities include constructing, designing, building, implementing, operating, maintaining and developing water supply projects including water treatment plants along with pumping stations and laying of pipelines for supply of water.

It also takes up other projects such as roads, bridges, tunnels, warehouses, buildings, railway buildings including platforms, stations, quarters, administrative buildings, rail-over-bridges and wastewater treatment plants. It also undertakes operations and maintenance services.

Financials & Risk factors
Source: RHP

The company’s revenue from operations has been growing at a compounded annual growth rate (CAGR) of 55%. As on July 15, 2023, it has an order book of ₹3,799.53 crore.

Most of the company’s business is concentrated in Rajasthan, and orders in the state constitute 61.5% of its order book — which can be risky as any adverse impact in the region can impact its business and financial condition.

A significant portion of its revenues, around 83% from its top five clients, and their loss can have an adverse effect on its business. Its projects are exposed to various implementation and other risks, including risks of time and cost overruns, and uncertainties.

“Our free operating cash flow to debt ratio as on March 31, 2023 and March 31, 2022 is negative. Further increase in debt without sustained free cash flows may adversely impact our financial condition and growth,” it said in its RHP.

They are also dependent on our subcontractors, which exposes them to risks like their availability and performance. The business is also working capital intensive.

Our company has availed ₹84.4 crore as unsecured loan, which are repayable on demand, it says.

Moreso, its promoters, promoter group and third parties mortgaged their personal properties and provided personal and/or corporate guarantees for the company’s borrowings to secure our credit facilities. Its business can be adversely affected if these guarantees are revoked by them.

The company has taken up six material civil litigations, three criminal proceedings and one tax proceeding, while it has four criminal proceedings against it and one against its promoters and directors.