The Vishnu Prakash R Punglia IPO is priced between ₹94 to ₹99 per share, with a minimum application lot size of 150 shares. Retail investors need a minimum investment of ₹14,850. Qualified institutional buyers (QIBs) must invest at least ₹207,900 for 14 lots (2,100 shares), while non-institutional investors (NIIs) are required to invest a minimum of ₹1,009,800 for 68 lots (10,200 shares).

The Vishnu Prakash R Punglia IPO, valued at Rs 308.88 crores, was a book-built issue comprising solely of 3.12 crore fresh shares. Bidding commenced on August 24, 2023, concluding on August 28, 2023. Allotment for the IPO was confirmed on Thursday, August 31, 2023. Subsequently, the shares were listed on both the BSE and NSE on September 5, 2023.

The matter involves a provision reserving up to 300,000 shares for employees, which are being offered at a discount of Rs 9 compared to the issue price.

Choice Capital Advisors Pvt Ltd and Pantomath Capital Advisors Pvt Ltd serve as the book running lead managers for the Vishnu Prakash R Punglia IPO, with Link Intime India Private Ltd appointed as the registrar for the issue.

Link to RHP: RHP

Link to DRHP: DRHP

Objects of the Issue

The proceeds from the issue will be used for the following objects:

• Funding capital expenditure requirements for the purchase of equipment/machinery.
• Funding the working capital requirements of the company.
• General corporate purposes.

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About Vishnu Prakash Limited

An ISO certified integrated Engineering, Procurement and Construction (“EPC”) company with experience in design and construction of various infrastructure projects for the Central and State Government, autonomous bodies, and private bodies across 9 States and 1 Union territory in India.

Principal business operations:

• Water Supply Projects
• Railway Projects
• Road Projects
• Irrigation Network Projects

The company is accredited with various registrations as a contractor with various departments and agencies, pursuant to which it is eligible to participate and undertake projects awarded by various other departments and agencies.

The company has design and engineering, procurement, project management and quality management teams along with a fleet of 499 construction equipment and vehicles.

GFCF which is a measure of the net increase in physical asset, is estimated to have made an improvement in FY22. As a proportion of GDP, it is estimated to be at 32.5%, which is the second highest level in 7 years (since FY15). In FY23, the ratio of investment (GFCE) to GDP inched up to its highest in the last decade with 33.9% as per the advanced estimate released.

In order to become 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 towards funding for transportation, electricity and water & irrigation. Centre’s share in NIP is 39% whereas, State and Private sector’s share is 39% and 22% respectively.

With a population of 1.39 billion, India ranks as the world's second most populous country. While 65% reside in rural regions, rapid urbanization driven by economic growth strains metropolitan areas. However, this expansion is unsustainable without efficient urban planning and access to clean, affordable water. Despite serving 18% of the global population, India possesses only 4% of the world's freshwater resources, leading to water stress. Around 50% of its population faces high-to-extreme water shortages. Per capita water availability is declining due to population growth, and by 2050, significant water demand is expected, particularly for agriculture and urban drinking water. Urban areas grappling with contamination and inadequate treatment compound the water management challenge.

The Indian Railways, the world's largest rail network, spans over 0.12 million km with 0.07 million km of routes and 7,000+ stations. Handling 9,000 freight and 13,500 passenger trains, it transports 203+ million tonnes of freight and 24+ million passengers. As India's biggest employer, it contributes 1.5% to GDP and holds 45% of the country's modal freight. The government plans a 70% increase in the ₹2,400 billion rail budget for FY24. FY22 saw a record 1,418 million tonnes of originating freight, up from 1,233 million tonnes in FY21.

A robust infrastructure signals development for a nation, exemplified by road, bridge, airport, and railway expansion, crucial for economic growth. India boasts a 6.37 million km road network, second globally. This network handles 60% of freight and 87% of passenger traffic, with national highways and state roads improving connectivity. Despite pandemic challenges, India's road sector focuses on Bharatmala Pariyojana, integrating modes, enhancing safety, IT usage, funding, and green initiatives, contributing 4.5% to GDP. MoRTH spearheads quality road construction, fostering economic development.

The cement demand is expected to grow by 8-9% y-o-y to 380-385 MT in FY23 to driven by increase in Government push for infrastructure development especially in the rural segment, urban housing growth and constructions. India is one of the largest manufacturers of steel pipes in the world, which is one of the most important sub-industries of the Indian Steel Sector. It contributes around 8% of India’s steel consumption and is valued around ₹600 Billion. India’s steel production to be in a range of 117-119 Million tonnes, a growth rate of 3-5% and consumption growth rate is expected to be healthy at 10- 12% in FY23.

RISK FACTORS TO THE ISSUE:

• The company’s operations are centered mainly in Rajasthan, accounting for approximately 67% of its revenue in FY23. However, any slowdown specific to this region, unfavorable weather conditions, shifts in government policies, or other related factors could affect the company’s business activities.
• The company deals in a very competitive sector, which includes risk of time and cost outrun, capital intensive with long duration of project completion. Along with this the company also requires subcontractors to complete the task.
• The company derives 85% of its revenue from water supply projects, and about 80% of revenue comes from a small group of clients. 
• The company is currently facing various legal suits including litigation and civil cases as well.