Udayshivakumar Infra Limited IPO
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.
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:
Udayshivakumar Infra Limited IPO Details:
|Open Date:||Mar 20 2023|
|Close Date:||Mar 23 2023|
|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 Date:||Apr 03 2023|
Promoters And Management:
Financials of Udayshivakumar Infra Limited IPO:
|Particulars (in Lakhs)||2022||2021||2020|
|Change in Inventories||37||111||-388|
|Employees Benefit Expenses||366||348||306|
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.