GR Infraprojects makes stellar debut, lists at 105 percent premium over issue price

19 Jul , 2021 By : Kanchan Joshi

Mumbai: Shares of G R Infraprojects Limited made a stellar stock markets debut on Monday. It was listed at Rs1715.85, a 105% premium over its issue price of Rs837. The Rs963.28 crore initial public offering (IPO) was subscribed 102.58 times during its share sale during 7-9 July.

The entire IPO was offer for sale of 1.15 crore shares by selling shareholders. The objects of the offer are to achieve the benefits of listing equity shares on stock exchanges.

“At the upper price band of Rs. 837, it is valued at 8.5 times price to earnings (PE) on FY2021 earnings per share (EPS), which is attractive considering its relative valuation," said Sharekhan by BNP Paribas.

The company has reported a CAGR of 21.9%, 20.1%, 15.3% in consolidated revenue, operating profit and net profit respectively over FY2019-FY2021. Its order book stands at Rs19,026 crore, which is 2.6 times its FY2021 standalone revenue, providing healthy revenue visibility.

“Current standalone order book translates to book to bill of 2.7 times which is in in-line with peers while it leads in terms of ROCE and revenue/EBITDA CAGR over the past five years," said Angel Broking.

However, the brokerage firm said that majority of the company’s revenue is derived from civil construction and majority of revenues from contracts is from limited number of government entities so if any BOT project awarded to the company is terminated prematurely, GRIL may not receive payments. “The business is capital intensive and may experience insufficient cash flows to meet required payments on debt and working capital requirements," it said.

G R Infraprojects is a focused EPC player with revenues at a 5 year CAGR of 47?cked with an above average margin of 19-21% that the company has managed to retain, said Canara Bank Securities.

“Further, the company has in house capabilities that helps it control the supply chain process and manage its raw material inventory optimally. Considering G R Infraprojects growth and margins, its FY21 P/E of 8.51 times looks attractive as compared to listed peers," Canara Bank Securities added.