Please refer to important disclosures at the end of this report
1
G R Infraprojects Ltd (GRIL) is an integrated Road EPC company that has executed
projects across 15 States in India and has recently diversified into projects in the
railway sector. GRIL has grown over years in terms of scale of its projects and has
track record of timely project completions. GRIL has one operational road BOT
project and has 14 road projects under HAM models (5 Operational/4 under
construction/5 yet to commence). Its order book as on Mar’21 was `19,026 crores
comprising of 16 EPC projects, 10 HAM projects and three other projects.
Positives: (a) Focused EPC player with road projects focus (b) Established track
record of timely execution (c) In-house integrated model (d) Strong financial
performance and credit rating
Investment concerns: (a) Majority of company’s revenue is derived from civil
construction and majority of revenues from contracts is from limited number of
government entities (b) If any BOT project awarded to the company is terminated
prematurely, GRIL may not receive payments (c) The business is capital intensive
and may experience insufficient cash flows to meet required payments on debt and
working capital requirements (d) Since it operates in a highly competitive
environment and EPC is a significant portion of the business, timely order inflows
are critical for future growth.
Outlook & Valuation: GRIL has a strong track record of timely execution, has
presence across regions and has built up its size over years which should enable it
to capitalize on the opportunity arising from government spends on road/highways.
Its standalone level, its net debt to equity is 0.3x and GRIL generates strong
cashflows (refer standalone numbers in RHP) which should help in meeting future
equity commitments in HAM projects. Current standalone order book translates to
book to bill of 2.7x which is in in-line with peers while it leads in terms of ROCE
and Revenue/EBITDA CAGR over the past five years. The valuations commanded
by GRIL are attractive and hence, we recommend “SUBSCRIBE” on the Issue.
Key Financials (Consolidated)
Y/E March (` cr)
FY2019
FY2020
FY2021
Net Sales
5,283
6,373
7,844
% chg
-
20.6
23.1
EBITDA (%)
24.3
24.9
23.6
Net Profit
717
801
953
% chg
-
11.7
19.0
EPS (`)
74.1
82.8
98.6
P/E (x)
11.3
10.1
8.5
P/BV (x)
3.6
2.7
2.0
ROE (%)
64.3
30.5
27.2
ROCE (%)
38.3
19.0
16.5
EV/EBITDA
7.4
6.5
6.3
EV/Sales
1.8
1.6
1.5
Source: Company, Angel Research;
Note: Valuation ratios at upper price band.
SUBSCRIBE
Issue Open: July 07, 2021
Issue Close: July 09, 2021
Offer for Sale: Rs. 962cr
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 86.5%
Others 13.5%
Post Issue Shar eholding Patter n
Post Eq. Paid up Capital: Rs 48.3cr
Issue size (amount): Rs 962 cr
Price Band: Rs 828-837
Lot Size: 17 shares and in multiple thereafter
Post-issue mkt. cap: *Rs 8006 cr - **Rs 8093 cr
Promoters holding Pre-Issue: 88.0%
Promoters holding Post-Issue: 86.5%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Fresh issue: NA
Present Eq. Paid up Capital: Rs 48.3 cr
G R Infraprojects Limited
f
IPO Note
July 06, 2021
G R Infraprojects Ltd | IPO Note
July 06, 2021
2
Company background
GRIL is an integrated road engineering, procurement, and construction (EPC)
company with experience in design and construction of various road/highway
projects across 15 States in India and having recently diversified into projects in the
railway sector. Its principal business operations are broadly divided into three
categories: (i) civil construction activities, under which they provide EPC services; (ii)
development of roads, highways on a Build Operate Transfer (BOT) basis,
including under annuity and Hybrid Annuity Model (HAM); and (iii) manufacturing
activities, under which they process bitumen, manufacture thermoplastic road-
marking paint, electric poles and road signage and fabricate and galvanize metal
crash barriers.
GRIL’s principal business of civil construction comprises EPC and BOT projects in
the road sector. They also have experience in constructing state and national
highways, bridges, culverts, flyovers, airport runways, tunnels and rail over-
bridges. They have over the years developed an established road EPC business
and have gradually added facilities to support and supplement their road
construction business. As part of in-house integrated model, GRIL has developed
inhouse resources with key competencies to deliver a project from
conceptualization to completion.
Its in-house integration includes a bituminous emulsion manufacturing facility, a
metal crash barrier fabrication and galvanization unit, a thermoplastic road-
marking paint and a road signage manufacturing facility, owned construction
equipment and a fleet of transportation vehicles and a design and engineering
team. As of March 31, 2021, its equipment base comprised over 7,000
construction equipment and vehicles.
Issue details
The entire IPO is made up of offer for sale of ~1.15cr shares by selling
shareholders. The issue size is ` 962cr and the price band is `828-`837 per
share.
Pre and post IPO shareholding pattern
No of shares
(Pre-issue)
%
(Post-issue)
%
Promoter
85,123,832
88.0
83,674,432
86.5
Public
11,565,178
12.0
13,014,578
13.5
Total
96,689,010
100.0
96,689,010
100.0
Source: Company, Angel Research & RHP.
Objectives of the Offer
The objects of the Offer are to achieve the benefits of listing the Equity
Shares on the Stock Exchanges.
G R Infraprojects Ltd | IPO Note
July 06, 2021
3
Key Management Personnel
Vinod Kumar Agarwal is the Chairman and Whole Time Director on the Board and
one of the Promoters of the company. He has over 25 years of experience in the
road construction industry. He looks after the strategy and policy formulation for
the company and liaises with various departments of the Government and also
overlooks processes in the company which includes bidding, tendering and
planning.
Ajendra Kumar Agarwal is the Managing Director on the Board and one of the
Promoters of the company. He has experience of over 25 years in the road
construction industry. He is responsible for overseeing the overall functioning of the
company, especially the operational and technical aspects, of the company. He
heads the inhouse design team and is actively involved in continuous value
engineering using the latest specifications and methodologies. He is also the head
of budgeting, planning and monitoring process.
Vikas Agarwal is the Whole Time Director on the Board. He has been associated
with the company since April 1, 2006 and has over 15 years of experience in the
road construction industry. He is responsible for overseeing the functioning of
running projects of the company, as allocated by the company’s management
from time to time.
Ramesh Chandra Jain is the Whole Time Director on the Board. He has experience
of over 27 years in the roads construction business. He joined the company on
January 16, 2015 and is responsible for monitoring of construction of roads,
highways and bridges. He is also responsible for the bidding process for new
projects. He was previously associated with the company as senior vice president –
business development.
G R Infraprojects Ltd | IPO Note
July 06, 2021
4
Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2019
FY2020
FY2021
Total operating income
5,283
6,373
7,844
% chg
-
20.6
23.1
Total Expenditure
3,999
4,787
5,994
Cost of materials consumed
113
106
111
Civil construction costs
3,461
4,151
5,313
Changes in inventories
0
-2
-4
Employee benefits expense
350
449
458
Other expenses
74
82
117
EBITDA
1,283
1,586
1,850
% chg
-
23.6
16.6
(% of Net Sales)
24.3
24.9
23.6
Depreciation& Amortization
149
189
226
EBIT
1,134
1,398
1,624
% chg
-
23.2
16.2
(% of Net Sales)
21.5
21.9
20.7
Finance costs
170
294
362
Other income
43
51
63
(% of Sales)
0.8
0.8
0.8
Recurring PBT
965
1,103
1,262
% chg
-
14.3
14.4
Exceptional item
-
-
-
Tax
291
353
371
PAT (reported)
717
801
953
% chg
-
11.7
19.0
(% of Net Sales)
13.6
12.6
12.2
Basic & Fully Diluted EPS (Rs)
74.1
82.8
98.6
Source: Company, Angel Research
G R Infraprojects Ltd | IPO Note
July 06, 2021
5
Consolidated Balance Sheet Statement
Y/E March (` cr)
FY2019
FY2020
FY2021
SOURCES OF FUNDS
Equity Share Capital
48
48
48
Other equity
2,181
2,979
3,932
Shareholders’ Funds
2,230
3,027
3,980
Total Loans
2,141
3,210
4,525
Other liabilities
-59
100
200
Total Liabilities
4,311
6,337
8,705
APPLICATION OF FUNDS
Property, Plant and Equipment
898
996
1313
Right-of-use assets
29
28
27
Capital work-in-progress
43
28
55
Intangible assets
2
5
4
Investment Property
0
0
0
Non-Current Investments
2
1
2
Current Assets
3,652
4,079
4,251
Inventories
614
769
1058
Investments
8
1
101
Trade receivables
548
306
508
Cash and Cash equivalents
716
948
831
Loans & Other Financial Asssets
284
240
530
Other current assets
1483
1816
1223
Current Liability
1,450
1,447
1,347
Net Current Assets
2,202
2,633
2,904
Other Non-Current Asset
1,134
2,646
4,399
Total Assets
4,311
6,337
8,705
Source: Company, Angel Research
G R Infraprojects Ltd | IPO Note
July 06, 2021
6
Consolidated Cash flow
Y/E March (`cr)
FY2019
FY2020
FY2021
Operating profit
1,008
1,154
1,325
Net changes in working capital
-1,309
-1,643
-2,022
Cash generated from operations
-15
-43
-149
Direct taxes paid (net of refunds)
-228
-223
-285
Net cash flow from operating activities
-244
-267
-434
Purchase of Assets
-470
-295
-516
Interest received
19
35
39
Others
-332
116
-253
Cash Flow from Investing
-784
-144
-730
Repayment (long term borrowings)
858
1,303
1,117
Repayment (short term borrowings)
9
-99
257
Proceeds from issue/repayment debentures
296
-13
-55
Interest paid
-148
-294
-357
Interest on Lease liabilities
-10
-13
-13
Others
0
0
-1
Cash Flow from Financing
1,004
884
949
Inc./(Dec.) in Cash
-24
473
-215
Opening Cash balances
102
79
552
Closing Cash balances
79
552
337
Source: Company, Angel Research
Key Ratios (Consolidated)
Y/E March
FY2019
FY2020
FY2021
Valuation Ratio (x)
P/E (on FDEPS)
11.3
10.1
8.5
P/CEPS
9.3
8.2
6.9
P/BV
3.6
2.7
2.0
EV/Sales
1.8
1.6
1.5
EV/EBITDA
7.4
6.5
6.3
Per Share Data (Rs)
EPS (Basic)
74.1
82.8
98.6
EPS (fully diluted)
74.1
82.8
98.6
Cash EPS
90
102
122
Book Value
231
313
412
Returns (%)
ROE
64.3
30.5
27.2
ROCE
38.3
19.0
16.5
Turnover ratios (x)
Receivables (days)
38
18
24
Inventory (days)
56
59
64
Payables (days)
47
42
45
Working capital cycle (days)
47
34
43
Source: Company, Angel Research
G R Infraprojects Ltd | IPO Note
July 06, 2021
7
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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