Ganesh Infraworld Limited, formerly known as Ganesh International, is quickly becoming one of the fastest-growing startups in Eastern India. The company specializes in providing Erection Services for complex projects, catering to EPC giants (Engineering, Procurement, and Construction). Their focus is on delivering comprehensive end-to-end solutions for various infrastructure needs across civil, electrical, road & rail, and water infrastructure. Ganesh Infraworld’s young and dynamic team is committed to transforming the EPC industry by offering round-the-clock services, 365 days a year, right at their clients’ doorsteps.

With a strong foothold in Eastern India, Ganesh Infraworld is capitalizing on the increasing demand for construction and infrastructure services. The company is now planning to raise funds through an Initial Public Offering (IPO). The IPO consists of a Fresh Issue of 118.76 Lakh shares, with an offering amounting to ₹98.57 Crores. The subscription period for the Ganesh Infraworld IPO opens on November 29, 2024, and will close on December 3, 2024. The allotment date is expected to be on December 4, 2024, with the shares listed on the NSE & SME on December 6, 2024.

IPO Price Band and Market Capitalization

The share price band for the IPO is set at ₹78 to ₹83 per equity share. Based on the upper price band of ₹83, the company’s market capitalization is estimated at ₹354.58 Crores. The IPO has a lot size of 1,600 shares, which means the minimum investment for retail investors is ₹1,32,800. High-Net-Worth Individuals (HNIs) must invest in 2 lots (3,200 shares) for a total investment of ₹2,65,600.

IPO Subscription Status and GMP

As of December 2, 2024, the Ganesh Infraworld IPO shows strong demand, with the IPO subscribed 20.03 times on the second day of subscription. This indicates high investor interest, particularly in the construction and infrastructure sector.

The Grey Market Premium (GMP) for the IPO is estimated at ₹25, suggesting potential listing gains of 30%. However, GMP is not a reliable indicator of future performance, as it is based on demand and supply in the unregulated market. It is important for investors to understand that GMP is for informational purposes only and not a guarantee of listing gains.

Financial Performance and Market Metrics

Ganesh Infraworld has demonstrated impressive financial growth over recent years. For the five months ending August 30, 2024, the company’s revenues from operations amounted to ₹21,232.86 Lakhs, an increase from ₹13,504.85 Lakhs in 2023 and ₹8,115.46 Lakhs in 2022. The EBITDA for the same period stood at ₹2,163.62 Lakhs, which is significantly higher than previous years.

The company’s Profit After Tax (PAT) for FY2024 is ₹1,537.20 Lakhs, reflecting a strong growth trajectory compared to ₹520.92 Lakhs in FY2023. These figures showcase Ganesh Infraworld’s growing profitability and operational efficiency.

For the IPO, the company has a pre-issue earnings per share (EPS) of ₹7.11, which will drop to ₹3.64 post-issue. The pre-issue P/E ratio is 11.67x, while the post-issue P/E ratio stands at 22.81x. The industry P/E ratio is 21x, suggesting that the IPO is priced slightly higher than the industry average.

The company’s Return on Capital Employed (ROCE) for FY2024 is 61.58%, and Return on Equity (RoE) is 59.38%, indicating strong financial returns on investments. These metrics suggest that Ganesh Infraworld is a highly efficient and profitable company, albeit with a higher valuation compared to its industry peers.

Objectives of the IPO

The proceeds from the Fresh Issue will be used for the following purposes:

1. ₹7,000 Lakhs to meet long-term working capital requirements.
2. General corporate purposes, including further business expansion and operational improvements.

Investment Recommendation

The Ganesh Infraworld IPO is fairly priced based on its financial performance and market metrics. The low P/E ratio pre-issue, coupled with the company’s impressive revenue growth, makes this IPO an attractive option for risk-tolerant investors looking for short-term listing gains. Given the strong demand indicated by the GMP and high subscription levels, we recommend that riskier investors consider applying for the IPO, either for listing gains or as a long-term investment.

The Upcoming IPOs in this week and coming weeks are Nisus Finance, Emerald Tyre Manufacturers, Rosmerta Digital and Avanse Financial.

The Current active IPO is Ganesh Infraworld and Suraksha Diagnostic.

How to Check Allotment Status

Once the allotment date is finalized on December 4, 2024, you can follow these steps to check your Ganesh Infraworld IPO allotment status:

1. Visit the registrar's website.
2. Select Ganesh Infraworld Limited IPO from the dropdown menu.
3. Enter your application number, PAN, or DP Client ID.
4. Submit the details to check your allotment status.

Conclusion

With strong financial growth, a robust subscription rate, and the potential for listing gains, the Ganesh Infraworld IPO presents an interesting investment opportunity. While the GMP and subscription demand suggest positive momentum, investors should assess their risk appetite before making any decisions. Risk-tolerant investors looking for growth in the construction and infrastructure sector may find this IPO appealing.

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