Udayshivakumar Infra Limited IPO

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i. Udayshivakumar Infra is engaged in the business of construction of roads including National Highways, State Highways, District Roads, Smart Roads under PM’s Smart City Mission projects,Smart Roads under Municipal Corporations, Bruhat Bengaluru Mahanagara Palike (BBMP) and Local Area Roads in various Taluka Places etc., in the State of Karnataka, Constructions of Bridges across Major and Minor Rivers, Railway Over Bridges (ROB), construction of Major and Minor Irrigation and canal projects, Industrial Areas, based in the State of Karnataka.

ii. The company bid for Roads, Bridges, Irrigation & Canals, Industrial Area construction in the State of Karnataka including Government Departments such as Karnataka Public Works Ports & Inland Water Transport Department (KPWP & IWTD), National Highways (MORTH), Belgaum Smart City Ltd. and Davangere Smart City Ltd., Bruhat Bengaluru Mahanagara Palike (BBMP), Various Municipal City Corporations, State Highway Development Corporations Ltd., (SHDP), Karnataka Road Development Corporation Ltd., (KRDCL), Karnataka Industrial Area Development Board (KIADB), Davanagere Harihara Urban Development Authority (DHUDA), Krishna Bhagya Jala Nigam Limited (KBJNL), Visvesvaraya Jala Nigam Limited (VJNL), Carvery Niravari Nigam Limited (CNNL), Karnataka Niravari Limited (KNNL), Youth Empowerment & Sports Department, in the State of Karnataka.

iii. The Company along with the erstwhile partnership firm, M/s. Udayshivakumar, have completed 30 projects having an aggregate contract valueof ₹68,468 lakhs, which includes sixteen (16) roads, five (5) bridges, six (6) irrigation and three (3) civil construction works.

iv. Over the years, they have acquired a fleet of modern construction machinery and equipment to support the construction of our projects. Company’s equipment base comprises of One hundred and eleven (111) construction equipments, forty six (46) dumpers, fifty one (51) other construction vehicles, seven (7) Ready MixConcrete (RMC) Plants (out of which one is owned by Mr. Prabhakar, brother of the Promoter and taken on leaseby us). Also, we have one (1) stone quarry owned by M/s. Udayshivakumar Stone Crusher.

v. As of December, 2022, they have fifty two (52) skilled and one hundred and twenty (120) on-site workers such as drivers, JCB operators, helpers etc for executing various projects.

Competitive Strengths
i. Focused on Roads, Flyovers and Bridge construction
ii. Strong Order Book of roads, bridges, flyovers and irrigation projects from Karnataka state government.
iii. Strong execution capabilities with industry experience.

 

Objects of the Udayshivakumar Infra Limited IPO:

The Company proposes to utilize the Net Proceeds from the Issue towards funding the following objects: i. Funding incremental working capital requirements of the Company; ii. General corporate purposes.
DRHP of Udayshivakumar Infra Limited IPO
RHP of Udayshivakumar Infra Limited IPO

Udayshivakumar Infra Limited IPO Details:

Open Date: Mar 20 2023
Close Date: Mar 23 2023
Total Shares: 18857142
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue IPO
Issue Size: 66 Cr.
Lot Size: 428 Shares
Issue Price: ₹ 33-35 Per Equity Share
Listing At: NSE,BSE
Listing Date: Apr 03 2023

Promoters And Management:

i. Udayshivakumar is the Promoter, Chairman and Managing Director on the Board of the Company. He holds a doctorate in social works empowerment and contractor development from International Global Peace University. He founded the erstwhile sole proprietorship ‘M/s Udayshivakumar’ in 2002 and has over 20 years of experience in the civil construction sector. ii. Manjushree Shivakumar is an Executive Director on the Board of the Company. She holds a bachelor’s degree in engineering from Visvesvaraya Technological University. She has been associated with the Company since 2020 in the capacity of a manager in the bidding and tender procurement department and the accounts and finance department and was appointed as an Executive Director with effect from August 30, 2022. iii. Amrutha is a Non-Executive Director on the Board of the Company. She has been associated with the Company since incorporation and has over six years of experience in human resource management and the civil construction sector.

Financials of Udayshivakumar Infra Limited IPO:

Particulars (in Lakhs) 2022 2021 2020
Revenue 18,563 21,040 19,361
COGS 3,531 3,612 2,811
Change in Inventories 37 111 -388
Construction Expense 11,825 14,563 14,094
Employees Benefit Expenses 366 348 306
Other Expenses 390 114 110
EBITDA 2,414 2,292 2,428
OPM 13.00% 10.89% 12.54%
Other Income 76 71 80
Depreciation 540 488 570
Finance Cost 348 518 518
PBT 1,602 1,357 1,420
Exceptional Items 0 126 0
Tax 387 300 370
PAT 1,215 931 1,050
NPM 6.52% 4.41% 5.40%
Shares 365 365 365
EPS 3.33 2.55 2.88

Comparison With Peers:

Name of the Companies Revenue (Cr) Profit (Cr) EPS P/E CMP MCap
HG Infra Engineering Limited 3,751 380 58.31 12.2 799 5,210
PNC Infratech Limited 7,208 580 22.62 9.7 287 7,366
KNR Construction Limited 3,606 366 13.58 18.5 264 7,425
IRB Infra. Developers Limited 5,804 361 0.6 21.3 27 16,293
USK Infra Limited 214 20 5.50 6.36 35 127.7

Recommendation on Udayshivakumar Infra Limited IPO:

Review and Recommendation of Udayshivakumar Infra IPO by IZ Team is 4/10

1. They are engaged in the business of construction of roads including National Highways, State Highways, District Roads, Smart Roads under PM’s Smart City Mission projects,Smart Roads under Municipal Corporations, Bruhat Bengaluru Mahanagara Palike (BBMP) and Local Area Roads in various Taluka Places etc., in the State of Karnataka, Constructions of Bridges across Major and Minor Rivers, Railway Over Bridges (ROB), construction of Major and Minor Irrigation and canal projects, Industrial Areas, based in the State of Karnataka. 2. Since 2015, they have completed projects worth Rs.684 Crores which includes sixteen (16) roads, five (5) bridges, six (6) irrigation and three (3) civil construction works. 

3. As on December 31, 2022 on an aggregate basis, they have 46 works orders in hand having aggregate order book value of ₹ 1290 Cr. 4. Apart from this other sources of revenue for the company is sales of products, I.e. they sell construction materials like ready mix concrete, jelly, M-sand, etc., for executing the civil work. They make these products via set-up RMC plants at different locations. This contribute 10% in the total revenue in 2022. 5. There is hardly any growth in the last 4 years. They have ~200 Crores revenue in Fy20 and in Fy23 if we annualise the 6MFy23 results, the Revenue will come around ~200 Crores. 6. Though Profit has increased from ~10 Crores in Fy20 to ~20 Crores in Fy23. 7. HG Infra, KNR, and PNC are given as peers. All of the three companies have given around 15% CAGR return in last 5 years. The EBITDA Margins of all these companies are in the range of 21-24%. However, Udayshivakumar IPO EBITDA margins is around 12% only. So, peers have superior margins. Plus, revenue of the peers have also grown really well. 8. HG Infra, KNR and PNC are available at P/E of 12x, 19x, 10x respectively. Udayashivakumar Infra IPO last 3 years average EPS is 3 and P/E based on that is ~12x. So, valuation looks fully priced in. 9. However, as IPO size is very small i.e. 66 Crores and IPO price is just Rs.35 per share, it can give good returns as volume can be easily generated in low price scripts. 

Lead Manager of Udayshivakumar Infra Limited IPO:

  1. Saffron Capital Advisors Private Limited

Registrar of Udayshivakumar Infra Limited IPO:

  1. MAS Services limted

Company Address:

Udayshivakumar Infra Limited 1924A/196, Banashankari Badavane, Near NH-4 Bypass, Davangere – 577 005 Phone: +91 819 229 7009 Email: cs@uskinfra.com Website: http://www.uskinfra.com/

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