Teerth Gopicon IPO, valued at Rs 44.40 crores, comprises a fresh issue of 40 lakh shares. Subscription for the IPO begins on April 8, 2024, and concludes on April 10, 2024. Allotment is expected to be finalized by April 12, 2024.

The IPO is slated to list on NSE SME on April 16, 2024, with an IPO price of ₹111 per share. The minimum lot size for retail investors is 1200 shares, requiring an investment of ₹133,200. HNIs must apply for a minimum of 2 lots (2,400 shares), amounting to ₹266,400.

Interactive Financial Services Ltd is the book running lead manager, while Bigshare Services Pvt Ltd serves as the registrar. Giriraj Stock Broking is designated as the market maker for the Teerth Gopicon IPO.

The Issue comprises of fresh Issue of 39,99,600 Equity Shares of the Company at an Issue Price of Rs. 111/- per Equity Share, aggregating up to Rs. 4439.56 lakhs by the Company.

Utilization of Net Proceeds:

1. Funding the working capital requirements of Company
2. General Corporate Purpose

Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges and enhancement of Company’s visibility and brand image along with creation of a public market for Equity Shares in India.

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About Teerth Gopicon Limited

An engineering construction and development company, incorporated in Ahmedabad as a private limited company on October 10, 2019. The company is engaged primarily in the construction of roads, sewerage work and water distribution work in the Madhya Pradesh. Apart from this company have also worked as sub-contractor and constructed residential tower in the city of Indore.

Scope of services includes detailed engineering of the project, procurement of construction materials, plant and machinery, construction and execution of the project and its operation and maintenance in accordance with the contractual provisions. Their manpower, resources and fleet of machinery and equipment, together with it’s engineering capabilities, enables them to execute a large number of projects simultaneously.

Company has executed wide range of civil engineering projects like building construction work, water supply, pipeline, sewerage network, sewerage treatment plant, nalla tapping work, Re-use network, Over Head Tanks, GSR, Road work, Rejuvenation of Lake etc

The business of the company is concentrated in the State of Madhya Pradesh and mainly in city of Indore, Chhattarpur, Sagar, Dindori, Jabalpur and Ujjain. The various clients of the Company are Indore Smart City Development Limited, Indore Municipal Corporation, Ujjain Smart City Limited, Ujjain Municipal Corporation and Madhya Pradesh Jal Nigam Maryadit.

In the Financial Year 2020-21, 2021-22 and 2022-23 the company has concentrated in Sewage Project and Road Construction Project. After the FY 2023 the company has concentrated in the Water Distribution projects and got the good water distribution projects from the Local Authorities and Government. This changed the financial position of the Company on account of execution of water distribution work which was awarded to the Company in the month of February 2023 and The Water supply system projects awarded to the Company has higher profit margin and the company is earlier mover in the water supply system project. Out of the total revenue from operation water distribution work has 90.97% contribution.

Order book in terms of value of contracts, including subcontracting assignments, was Rs. 114034.00 lakhs as on 31^st Jan’24.

Among the 10 projects

• Water supply system has 5 projects worth Rs. 103489.00 lakhs.
• Rejuvenation of Rudrasagar Lake is worth Rs.1458.00 lakhs.
• Surface Parking, office Building has 1 project worth Rs. 906 lakhs
• Sewage Treatment has 1 project worth Rs.2270.00 lakhs.
• Real Estate Development has 1 project worth Rs. 2571.00 lakhs.
• Road development has 1 project worth Rs.3340.00 lakhs.

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development.

In other words, the infrastructure sector acts as a catalyst for India’s economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects. To meet India’s aim of reaching a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour.

The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India’ and the production-linked incentives (PLI) scheme to augment the growth of infrastructure sector. Historically, more than 80% of the country's infrastructure spending has gone toward funding for transportation, electricity, and water& irrigation. While these sectors still remain the key focus, the government has also started to focus on other sectors as India's environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness.

Finance minister Nirmala Sitharaman's Budget for 2023-24 underlines sustained focus on the northeast for "inclusive development" as one of the seven priorities, which act as the 'Saptarishi' guiding the government "through the Amrit Kaal”. Under Budget 2023-24, capital investment outlay for infrastructure is being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which would be 3.3 per cent of GDP and almost three times the outlay in 2019-20.

Under Budget 2023-24, Infrastructure Finance Secretariat is being established to enhance opportunities for private investment in infrastructure that will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure, and power. In June 2022, the Minister of Road Transport and Highways, opened 15 national highway projects worth Rs. 13,585 crores (US$1.7 billion) in Patna and Hajipur, Bihar.

Risk related to the issue

Business is concentrated in Madhya Pradesh: Company is primarily dependent on projects undertaken or awarded in the state of Madhya Pradesh. The company rely 100% on the State government, Local Authority and it’s undertaking, deriving majority of its revenue from contracts with a limited number of government authorities and other entities any adverse development in Madhya Pradesh may affect the operations impacting on business, financial condition and operations.

High Competition and Labor intensive: The company operates in highly competitive environment. In the open Bid/Tender, the process of awarding contracts / projects, clients generally specify pre-qualification criteria. The company expects to face competition from large domestic infrastructure development companies, which are well placed to fulfil the pre-qualification criteria.

Limited number of clients: Currently, 100% of the revenue of the company comes from 5 clients. This makes the company accept onerous contractual terms in contracts for projects awarded by clients.

Own large fleet of Machineries and equipment: The company owns large fleet and machinery because during the peak season it is difficult to get the desired machine at desired price for the required time to complete the contract on time. To overcome such situation, they have started investing in the plant and machineries and for the period ended on January 31, 2024 & have acquired machineries worth Rs. 704.63 lacs and vehicles of Rs. 125.88lacs.

Engage sub-contractors and other agencies for execution: Company rely on third parties for the implementation of projects where they have entered into arrangements with them for the supply of labour, equipment and raw material. Accordingly, the timing and quality of our infrastructure projects also depends on the availability and the skill of such sub-contractors.

High working capital requirements: The company needs to manage significant amount of working capital, If they are not able to manage the same they may not be able to bid for new projects and it will adversely affect the growth, profitability and business.

Require certain registrations: Business operations requires to obtain and renew certain approvals, licenses, registration and permits from time to time from the different regulatory authorities failure can comply with applicable conditions.