Sonu Infratech Ltd IPO

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The Company is engaged into the business of civil construction services, such as piling, excavation, road preparation, land leveling, structural painting, building construction in nature of commercial and industrial project, mechanical scaffolding services including structuring and piping, Plant maintenance at Reliance DTA (Domestic Territory Area), Reliance SEZ (Special Economic Zone), Reliance MTF (Marine Time Farm including DTA and SEZ), Reliance J3 (C2 Complex, PCG DTA, PCG SEZ, Rubber Plant), Nayara Maintenance, Repairs and Maintenance services such as plumbing, electrification, cleaning of vessels, plant and machinery, tanks during shut down period of the company who had awarded us contract etc. They also have their own plant and machinery and vehicle which enables us to provide a complete range of civil construction services for majority of all type of civil construction and infrastructure related work.

They are class “C” contracts (“Upper Tendering Limit of Rs. 100 Lakh) which enables them to bid the contract for any kind of defense segment work in India. They have successfully completed various contracts awarded by Military Engineering Services (“MES”).

Over the years, They have been evolved and grown exponentially into an initiative with a progressive outlook and a professional approach. They strive to provide innovative, integrated and satisfactory customized solutions to their clients as per their specific needs. They are positioned as a highly professional, reliable and safe, prompt & quality service provider in infrastructure service arena.

They have work order book of more than 2041.14 Lakh as on December 20, 2021. They secure contracts in generally through one to one negotiation. The pricing of their services is determined on the basis of type of construction and estimated duration within which it needs to be completed as well as the type of equipment’s required. The prices are determined by negotiating directly with the client. In general, their services are provided to the customers on credit and they maintain an ongoing account of receivables from customers. The customers generally settle the account on periodic basis. They also bid for the Contracts.

Their customer include medium to large size of infrastructure companies to they serve and completed various projects successfully for which they have been awarded by them.

Objects of the Sonu Infratech Ltd IPO:

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects: 1. To Meet Incremental Working Capital Requirements 2. General Corporate Purpose 3. To meet Public Issue Expenses

Sonu Infratech Ltd IPO Details:

Open Date: Apr 29 2022
Close Date: May 05 2022
Total Shares: 2400000
Face Value: ₹ 10 Per Equity Share
Issue Size: 8.64 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 36 Per Equity Share
Listing At: NSE Emerge
Listing Date: May 17 2022

Promoters And Management:

1. Mr. Ramji Shreenarayan Pandey Educational Qualification : Undergraduate 2. Mr. Ketan Vallabhdas Modi Educational Qualification : Undergraduate

Financials of Sonu Infratech Ltd IPO:

Particulars (in Lakhs) 7MFY22 Mar-21 Mar-20 Mar-19
Sales 3,229 4,051 4,098 3,411
Consumption of Material Consumed 1,594 1,776 972 730
Changes in Inventories -838 -590 -295 -55
Employee Benefits Expense 1,395 1,385 1,726 1,395
Other Expenses 601 916 1,229 1,103
Operating Profit 477 564 466 238
OPM % 14.77% 13.92% 11.37% 6.98%
Other Income 10 26 16 2
Finance Cost 118 154 135 68
Depreciation 225 243 258 87
Profit before tax 145 193 89 85.00
Total Tax Exps 40 53 23 21
Net Profit 104 140 66 64
NPM % 3.22% 3.46% 1.61% 1.88%
No. of shares 78.50 78.50 78.50 78.50
EPS 1.91 2.57 1.21 1.18

Comparison With Peers:

Name of the Company Sales (In Cr.) PAT (In Cr.) EPS PE RoCE Mcap (In Cr.) Returns 3Y Sales Growth (3Y)
Sonu Infratech Limited 64 2 2.55 14.03 5.09% 28 - 89.32%
RPP Infra Projects Limited 690 21 6.55 8.26 11.40% 169 -55% 18.76%
Shashijit Infraprojects Limited 27 0.06 -0.12 -257 1.88% 23 -24% 2.40%

Recommendation on Sonu Infratech Ltd IPO:

Review and Recommendation of  Sonu Infratech Ltd IPO by InvestorZone is 3/10 1. Company is mainly into business of civil construction services, such as piling, excavation, road preparation, land leveling, structural painting, building construction in nature of commercial and industrial project. So, they are into infra business. 2. Revenue has grown from 34 Crores in FY19 to 40 Crores in FY21. 3. PAT has grown from 64 Lakhs in FY19 to 1.04 Crores in FY21. 4. D/E is 1.57x (on higher side). 5. P/E = 14x based on FY21 numbers. 6. In FY21, they have reduced the Employee Benefit Expenses to 13 Crores from 17 Crores in FY20. Other expenses, also reduced in FY21 to 9 Crores from 12 Crores in FY20. So, there is a saving of ~7 Crores here, which has increased the PAT from 64 Lakhs in FY20 to 1.04 Crores in FY21. Reduction of employee benefits for almost same revenue is highly unlikely.

Lead Manager of Sonu Infratech Ltd IPO:

  1. Swastika Investmart Limited

Registrar of Sonu Infratech Ltd IPO:

  1. Skyline Financial Services Private Ltd

Company Address:

Platinum 404, 4th Floor Park Colony, Opp. Joggers Park Jamnagar -361008, Gujarat.

Discussion on Sonu Infratech Ltd IPO:

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