Vishnu Prakash R Punglia IPO - Investment Rationale, Issue Details, Financials, Concerns: Nirmal Bang

Nirmal Bang's IPO Report

Vishnu Prakash R Punglia Ltd.'s maiden public issue will open on August 24 and close on August 28. An Engineering, procurement and construction company has fixed a price band of Rs 94-99 Apiece.

Objects and details of the issue:

The public issue consists of fresh issue of equity shares aggregating upto Rs 309 crore. The net proceeds from the fresh issue will be utilised towards:

• Funding working capital requirements (Rs 150 crore) and

• capex for purchase of equipments/machineries (Rs 62 crore).

Investment Rationale:

• Strong tailwinds in infrastructure to support growth.

• Focused player in Water Supply Projects.

• Diversification towards other segments.

• In-house integrated model.

• Track record of strong growth; Robust order book provides visibility for future growth as well.

Valuation and Recommendation:

Vishnu Prakash R Punglia’s niche focus on water supply projects, low revenue base and demonstrated track record of high growth with margin expansion along with reasonable valuations makes the issue attractive compared to listed peers.

With strong industry tailwinds likely to persist in water related projects, railways and roads, we believe Vishnu Prakash R Punglia is a decent proxy play on the infrastructure industry offering high growth with good profitability. Thus we recommend to 'Subscribe' to the IPO.

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