IPO Note on G R Infraprojects Limited - Institutional Research Desk at HDFC Securities

Background & Operations:

G R Infraprojects Limited (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 provides 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 it 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. It has, since 2006, executed over 100 road construction projects. Out of its BOT projects, it has one operational road project which has been constructed and developed on a BOT (annuity) basis and 14 road projects which have been awarded under the HAM, out of which five projects are currently operational, four projects are under construction and construction is yet to commence on five of these projects. It also has experience in constructing state and national highways, bridges, culverts, flyovers, airport runways, tunnels and rail over-bridges.

GRIL has over the years developed an established road EPC business and has gradually added facilities to support and supplement its road construction business. As part of inhouse integrated model, it has developed inhouse resources with key competencies to deliver a project from conceptualization to completion that includes design and engineering team, three manufacturing units at Udaipur, Rajasthan, Guwahati, Assam and Sandila, Uttar Pradesh for processing bitumen, thermoplastic road-marking paint and road signage and a fabrication and galvanization unit at Ahmedabad, Gujarat for manufacturing metal crash barriers and electric poles. In addition, as of March 31, 2021, its equipment base comprised over 7,000 construction equipment and vehicles.

The Company executes road projects as EPC contractors, construction services providers as well as through PPP model on a BOT basis, with a focus on HAM projects. For the projects that it delivers on an EPC and construction services basis, the scope of services typically includes design and engineering of the project, procurement of raw materials, project execution at site with overall project management up to the commissioning of these projects. In addition, it also undertakes repair and maintenance of projects in accordance with its contractual arrangements. For BOT projects, in addition to construction and development of the project, it is also required to operate and manage the project during the concession period. GRILs employee resources and fleet of equipment, together with engineering skills and capabilities, enables it to execute a range of road construction projects involving varying degrees of complexity.

In March 2010, GRIL commissioned wind energy based power plant at Jaisalmer, Rajasthan with an installed capacity of 1.25 MW under the 'Policy for Promoting Generation of Electricity through Non- Conventional Energy Sources - 2004'. IT has also commenced constructing a group housing project comprising row houses and other residential units at Udaipur, Rajasthan. While it executes a majority of its projects ourselves, it also form project-specific joint ventures and consortiums with other infrastructure and construction companies. In particular, when a project requires it or its consortium partners to meet specific eligibility requirements in relation to certain projects, including requirements relating to specific types of experience and financial resources, it enter into such partnerships or consortiums with other infrastructure and construction companies. As of March 31, 2021, GRIL had an Order Book of Rs. 190,258.05 million.

Source : Equity Bulls

Keywords