Vision Infra Equipment Solutions Limited (VIESL), a well-known provider of equipment solutions, is all set to launch its Initial Public Offering (IPO) in September 2024. Specializing in renting road construction equipment, trading, and refurbishing, VIESL plays a critical role in sectors like airports, smart cities, irrigation, building and factories, mining, and railways. The company’s robust portfolio positions it as a key player in the infrastructure development sector, with a client base that spans across various industries.

VIESL IPO Overview

The VIESL IPO is a Book Built Issue amounting to ₹106.21 crore, consisting solely of a Fresh Issue of 65.16 lakh shares. The subscription window opens on 06 September 2024 and closes on 10 September 2024. Investors can expect the IPO allotment to be finalized by 11 September 2024, with a tentative listing date on the NSE SME on 13 September 2024.

Price Band and Investment Details

The share price band for the VIESL IPO has been set between ₹155 to ₹163 per equity share. Retail investors are required to buy a minimum of 800 shares, translating into an investment of ₹130,400. For High-Net-Worth Individuals (HNIs), the minimum investment is set at 2 lots (1,600 shares), requiring an outlay of ₹260,800.

Financial Performance of VIESL

Over the past few years, Vision Infra Equipment Solutions has shown impressive financial growth. The company's revenue increased from ₹30,510.16 lakh in FY22 to ₹36,889.54 lakh in FY23, and the company reported ₹34,965.58 lakh in FY24. The company’s EBITDA has also seen a significant increase, jumping from ₹3,411.67 lakh in FY22 to ₹8,152.67 lakh in FY24, reflecting strong operational performance.

However, despite a slight dip in revenue between FY23 and FY24, VIESL’s Profit After Tax (PAT) surged from ₹918.85 lakh in FY23 to an impressive ₹2,668.90 lakh in FY24, showing the company’s profitability has strengthened.

Valuation Metrics

The IPO is priced at a pre-issue EPS of ₹15.43 and a post-issue EPS of ₹10.83. With a pre-issue P/E ratio of 10.56x and a post-issue P/E ratio of 15.05x, the offering appears to be competitively priced. Notably, the industry P/E ratio stands at 16.15x, positioning VIESL’s IPO favorably against its peers. The company boasts an impressive Return on Capital Employed (ROCE) of 28.19% and a Return on Equity (ROE) of 130.95% for FY24, reflecting its solid financial standing.

Objectives of the IPO

The net proceeds from the Fresh Issue are expected to be utilized for the following purposes:

₹4,681.15 lakh will be allocated for Capital Expenditure to purchase additional equipment, which will allow VIESL to expand its operations and meet growing demand.

₹3,650.00 lakh will be directed toward fulfilling working capital requirements, essential for smooth operational expansion.

The remaining proceeds will be used for general corporate purposes, ensuring the company maintains a strong financial position.

Grey Market Premium (GMP) and Expected Listing Gains

The Grey Market Premium (GMP) of the Vision Infra Equipment Solutions IPO is currently expected to range between ₹50 to ₹55, reflecting positive sentiment among investors. This GMP suggests potential listing gains of 30% to 33%, making it a promising opportunity for investors seeking short-term profits.

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It’s important to note, however, that the Grey Market is unregulated, and trading based on GMP should not be the sole criterion for investment decisions. While it provides an insight into market demand, the actual price discovery will occur once the shares are listed on the stock exchange.

How to Check VIESL IPO Allotment Status

Investors can check the status of their IPO allotment after 11 September 2024 using the following steps:

Visit the IPO allotment status page on the registrar’s website.

Select Vision Infra Equipment Solutions Limited IPO from the dropdown menu.

Enter your application number, PAN, or DP Client ID.

Submit the details to check your allotment.

By following these steps, investors can quickly determine whether they have received shares in the allotment process.

Should You Invest in the VIESL IPO?

Given the company’s steady financial growth, competitive pricing, and the robust demand expected from key sectors like infrastructure development, mining, and smart city projects, the Vision Infra Equipment Solutions IPO offers a strong value proposition. The listing gains suggested by the GMP, coupled with the company’s solid ROCE and ROE, make this IPO an attractive opportunity for both short-term gains and long-term investments.

Investors with a focus on infrastructure and equipment leasing businesses may find this IPO particularly appealing. The funds raised will provide the company with the necessary capital to expand its equipment portfolio, meet operational demands, and further solidify its position in the industry.

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