As GR Infraprojects makes its debut in BSE and NSE today, it has started its journey at a premium of 103%. This astonishing rise over the issue price is due to its high demand in the secondary market.
This has surpassed analysts’ expectations, mainly due to the company’s current financial status and the Government’s focus on improving its infrastructure.
The day started for GR Infraprojects trading at Rs. 1700, which is upped by Rs. 863, against its issue price of Rs. 837 on BSE. At the time of writing, about 11 am, it is trading at Rs. 1702, a rise of about 103%.
GR Infraprojects: IPO overview
The IPO of GR Infraprojects, valued at Rs. 963 crores went live between 7 July and 9 July and were finalised last week on 14 July. Share prices were allotted at Rs. 837 per share and subscribed 102.58 times in this period.
Apart from this, the shares of GR Infraprojects are expected to list at a substantial 55% to 60% premium over its final issuing price. These shares also reflect similar movements in the grey market. Here, they are available at a 62% to 67% premium over the final issue price.
From today’s early trading data, you can understand how this stock has surpassed all calculations and analyses.
What’s fuelling this demand?
The Udaipur based road engineering, procurement, and construction (EPC) company has its operations currently in 15 states across this country. It is one of the most experienced firms in the space of design and construction of highways. Recently, the company has diversified its portfolio by venturing into railway.
To understand what is making GR Infraprojects an attractive proposition, read on.
GR Infraprojects has been on an upward trajectory for the past two decades and is among the largest players in the EPC segment. As of March 2021, the company has an order book valued at about Rs. 19,000 crores. It also has a book to bill ratio 2.6 times of its FY2021 revenue.
Moving ahead –
As of March 2021, GR Infraprojects has 1 build, operate, and transfer (BOT) project and 14 road projects of Hybrid Annuity Mode (HAM). Out of these 14 –
- 5 of them are currently in operation
- 4 of them are under construction
- 5 of them are yet to commence
Apart from these, the company has also submitted a bid for Metro and High-speed railway projects.
Alongside its varied project portfolio, GR Infraprojects also has a robust business model. To give an example, the company has more than 7000 in-house construction equipment, which reduces the dependency on third-party machinery. This may require a higher one-time investment, but in turn, reduce the operating cost and cut on delays due to the unavailability of necessary equipment.
Additionally, the company has a low net-debt-to-equity ratio of 0.2 times, which places it in a position to meet its requirement of funds without hassle.
To answer the question, the IPO demand of GR Infraprojects is fuelled by its strong financials. The company has completed more than 100 projects and established itself as a trusted EPC and BOT firm.
Moreover, the Indian Government is planning to increase its investment in infrastructure, which is again good news for firms like GR Infraprojects. With their expertise and experience, it is likely that they will rope in more Government contracts, bolstering their books further.
To sum up
GR Infraprojects, being a leading firm in this segment, is at an advantage and is a comparatively safe bet for investors. Considering their books, the current hike in share prices is not unexpected but has certainly surpassed all the expectations.
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Frequently Asked Questions
- Who are the promoters of GR Infraprojects?
Purshottam Agarwal, Ajendra Kumar Agarwal, Vinod Kumar Agarwal, and Lokesh Builders Private Limited are the promoters of GR Infraprojects.
- What is the issue size of GR Infraprojects IPO?
The issue size of GR Infraprojects IPO is 11,508,704 equity shares at Rs. 5 per share, amounting to Rs. 963.28 crores.
- What is the post-issue promoter holding for GR Infraprojects IPO?
The post-issue promoter holding for GR Infraprojects IPO is 86.54%.