Popular Foundations Limited IPO

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Popular Foundations is renowned for its expertise in Engineering, Architecture, and interior and exterior fit-outs. The company has earned a strong reputation among educational institutions, industries, and commercial establishments across Tamil Nadu, having successfully completed projects in multiple locations, including Pondicherry, Tanjore, Bangalore, Trichy, Madurai, Vizhuppuram, and Coimbatore, in addition to Chennai.

Strategic Focus and Market Position

The company’s strategic focus is on non-residential construction, with a particular emphasis on institutional and hospitality sectors. Popular Foundations excels in securing projects through a meticulous tendering process, where its brand reputation and extensive experience play a crucial role in winning contracts. The company’s success in obtaining repeat orders from institutional clients highlights its strength in client retention and project acquisition.

Conclusion

With a strong foundation in the construction sector, particularly in the institutional and hospitality domains, Popular Foundations continues to build on its reputation for delivering high-quality construction solutions. The company’s strategic focus, experienced leadership, and robust financial performance position it well for sustained growth in the coming years.

Objects of the Popular Foundations Limited IPO:

The Company proposes to utilize the Net Proceeds towards funding the following objects: i. Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the Company; ii. Funding the working capital requirements of the Company; and iii. General corporate purposes.

Popular Foundations Limited IPO Details:

Open Date: Sep 13 2024
Close Date: Sep 18 2024
Total Shares: 5,370,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 19.87 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 37 Per Equity Share
Listing At: BSE SME
Listing Date: Sep 23 2024

Promoters And Management:

Ananthanarayanan Sankaralingam Venkatesh, aged 59, is an IIT Madras Engineering graduate and IIM Ahmedabad MBA. He founded Popular Foundations Limited in 1988 and serves as its Managing Director, focusing on environmentally sustainable construction. An active member of Rotary International, he has held various leadership roles, including District Governor and International Director. He also serves as President of the IIT Alumni Industry Interaction Centre and has a passion for bridge, previously leading the Tamilnadu Bridge Association. Vinita Venkatesh, aged 60, is an accomplished professional with over 30 years of experience in the shipping industry. An alumna of the University of Bombay and IIM Ahmedabad, she has held leadership roles in organizations such as The Shipping Corporation of India, P&O Ports, and Krishnapatnam Port. She is the Founder of Popular Maritime and Co-Founder of Magic Hive Manpower Development. Vinita is also active in various industry associations and is a sought-after speaker on shipping and logistics. Dharmapuri Harirao Gopalakrishnan, aged 64, is a mechanical engineer with extensive experience in design, development, production, and marketing, both domestically and internationally. He founded Protech Engineers, a 100% Export Oriented Unit, exporting to markets like the USA, Japan, and Europe. Gopalakrishnan has worked with leading engineering firms such as Electro Carbonium, Pricol Ltd, and Autolec Industries Ltd., where he rose to General Manager - Exports. He also established joint ventures with companies in the Netherlands and Italy, including Berkel Industries. Currently, he serves as an Independent Director on the Board.

Financials of Popular Foundations Limited IPO:

Particulars ( In Lakhs )
2022
2023
2024
Revenue from Operations 2,589 4,710 5,182
Other Income 41 157 9
Total Revenue 2,630 4,867 5,191
Cost Of Material Consumed 2,739 3,534 3,554
Change in Inventories -858 442 289
Employees Benefit Expenses 364 394 458
Other Expenses 120 174 179
EBITDA 265 323 710
OPM (%) 10.08% 6.65% 13.68%
Depreciation & Amortisation 30 33 28
EBIT 236 291 682
Finance Cost 197 155 145
PBT 38 135 538
Tax -10 16 190
PAT 48 120 348
NPM (%) 1.83% 2.46% 6.70%
No.of Shares 203.78 203.78 203.78
EPS 0.23 0.58 1.70

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Popular Foundations Limited 52 3 1.70 21.7 37 75
NCC Limited 20,845 740 11.32 26.0 318 19,940
Hindustan Construction Company Ltd 7,007 478 2.85 N/A 45.2 7,601
* All the data is as per FY24.

Recommendation on Popular Foundations Limited IPO:

1. Popular Foundations is equipped with deep expertise in Engineering, Architecture, and interior and exterior fit-outs. This broad skill set has enabled the company to gain recognition among educational institutions, industrial sectors, and commercial establishments across Tamil Nadu. 2. The company's project portfolio includes successful ventures in regions like Pondicherry, Tanjore, Bangalore, Trichy, Madurai, Vizhuppuram, and Coimbatore, in addition to its core operations in Chennai. 3. SWOT Analysis Strengths: i. Operational Efficiency                                      ii. Experience iii. Customer Satisfaction                                   iv. Repeat Orders Weaknesses: i. Skilled Labor Availability                                ii. Working Capital Constraints Opportunities: i. Sectoral Growth Threats: i. Inclement Weather                                          ii. Government Policies iii. Delay in Collections                                      iv. Customer Resistance to New Technologies 4. Competitive Landscape Popular Foundations operates in a highly competitive, unorganized, and fragmented industry. Despite facing competition from both small unorganized operators and large builders in the commercial segment. 5. The Revenue has Increased from Rs.26 Crores in FY22 to Rs.52 Crores in FY24. 6. The EBITDA has Increased from 2.6 Crores in FY22 to 7 Crores in FY24. 7. The PAT has Increased from 48 Lakhs in FY22 to 3.4 Crores in FY24. 8. As per FY24, CFO/EBITDA is 0.99, and EPS is 1.70, 9. Market Capitalization is 75 Crores and P/E is 21.7x based on FY24.

Lead Manager of Popular Foundations Limited IPO:

  1. SRUJAN ALPHA CAPITAL ADVISORS LLP

Registrar of Popular Foundations Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Popular Foundations Limited New No. 32/1, 32/2, Old No. 9/1, 9/2, Kamatchi Apartment, 10th Avenue, Ashok Nagar, Chennai - 600083 Phone: +91 941498731 Email: info@grouppopular.com Website: http://www.grouppopular.com/

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