GR Infraprojects lists at 105% premium over issue price

NEW DELHI: GR Infraprojects made a strong market debut on Monday, as the scrip got listed at Rs 1,715.85 on NSE, a 105 per cent premium to its issue price of Rs 837. On BSE, the scrip got listed at Rs 1,700, up 103.11 per cent.

The IPO, which was sold between July 7 and 9, was subscribed a whopping 102.58 times. It received total bids for 83,33,04,538 shares against 81,23,594 shares on offer. The quota reserved for qualified institutional buyers (QIBs) was subscribed 168.58 times, the non-institutional investor (NII) quota was subscribed 238.04 times and the one reserved for retail individual investors (RIIs) 12.57 times.

The Udaipur-based GR Infraprojects is an integrated road engineering, procurement, and construction (EPC) company with experience in the design and construction of various road and highway projects across 15 states in India. It has recently diversified into projects in the railway sector.

The company had an order book of Rs 19,026 crore as of March 31, which was around 2.7 times its construction services income. The order book comprised 16 road EPC projects, 10 HAM projects and three other projects.

At the issue price, GR Infra demanded a P/E multiple of 8.5 times based on FY21 post issue fully diluted EPS and EV/Ebitda of 6.5 times post-issue fully diluted FY21 Ebitda, which were at discount to listed industry peers.

Analysts said the company has a strong execution track record, a robust order book and a strong balance sheet. They believe the company’s internal accruals should be enough to meet the equity requirements of its existing HAM portfolio. But they were slightly concerned about the company’s medium-term growth potential, given its size and dependence on a single segment (roads).

“Assuming 15 per cent growth in FY22/23 and lower margins, we expect the company to report a PAT of Rs 900 crore in FY23, which values its EPC business at 7 times FY23 P/E at Rs 837 – in line with most peers, which are all trading at significant discounts to their historical average (14 times) due to the ongoing pandemic,” Phillip Capital said in an IPO note.

HDFC Bank,

, Kotak Mahindra Capital Company, Motilal Oswal Investment Advisors, SBI Capital Markets, and Equirus Capital were the lead managers of the IPO.

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