IPO: Vishnu Prakash R Punglia

Vishnu Prakash R Punglia, a leading infrastructure construction company, has come out with its IPO (initial public offering). Here's a breakdown of the company's strengths, weaknesses, and growth prospects to help investors make an informed decision. In a nutshell Quality : Vishnu Prakash's three-year average return on equity (ROE) and return on capital employed (ROCE) are 29.8 per cent and 27.7 per cent, respectively. In FY23, the company's ROE and ROCE were 38.3 per cent and 33.7 per cent, respectively. Growth : Its topline grew by 48.7 per cent and 61.7 per cent in FY23 and FY22, respectively, mainly due to new projects undertaken in the road infrastructure segment. Valuation : The stock will be priced at a P/E and P/B of 13.6 and 2 times, respectively, as compared to its peer's median and average of 14.4 and 2.5 times, respectively. Overview : High focus on investment in infrastructure projects and new initiatives by the governments can help the company grow, as 99 per cent of the revenue generated is from such projects. However, changes in government policies and decreased spending on these projects by the government can pose a threat. About Vishnu Prakash R Punglia Vishnu Prakash R Punglia (incorporated in 1986) is an engineering, procurement and construction (EPC) company mainly dealing in water supply, railway, road and irrigation network projects for the Central and State Government of India. Its clientele includes various government agencies such as the National Highway Authority of India, Indore Smart City Development and the Public Works Department, among many others. Strengths of Vishnu Prakash R Punglia Established relationships with various Central and State Government departments which has helped the company in bagging multiple projects from the same clients. Order book of about Rs 3,800 crore (or about 3.3 times of FY23 revenue). Weaknesses of Vishnu Prakash R Punglia High reliance on the government for infrastructure projects. Any shift in focus or decrease in spending by the government on these projects can significantly affect the top line of the company. Revenue concentration - top 10 clients accounted for about 93.4 per cent of FY23 revenue. IPO details Total IPO size (₹ cr) 309 Offer for sale (₹ cr) 0 Fresh issue (₹ cr) 309 Price band (₹) 94-99 Subscription dates August 24, 25 and 28, 2023 Purpose of issue To fund capex and working capital Post-IPO M-cap (₹ cr)