G R Infraprojects Ltd IPO - Subscribe - YES Securities

IPO Price: Rs828-837 Issue Opens: 07-Jul-21 Issue Closes: 09-Jul-21

- G R Infraprojects, as at the end of March 2021, it is sitting on a robust order book of ~Rs.190 bn with book to bill ratio of 2.6x to its FY21 revenue. This gives a good revenue visibility for the coming years.

- GR Infra has a strong integrated business model. As on 31st March 2021, GR Infra's equipment base comprised of over 7,000 construction equipment and vehicles. Its inhouse integrated model reduces dependence on third party suppliers for key raw materials, construction equipment and other products and services required in the development and construction of its projects.

- The total investment done by the company as of March 2021 in all its operational and under construction BOT & HAM projects was Rs.13.0 bn and balance to be done is Rs. 12.0 bn. The company also has very low debt with net debt to equity of 0.2x. Hence, the company is well placed to meet its funds requirement for growth with low debt and ready monetizable assets.

- Our View: Assuming a 15% PAT CAGR over FY21-FY23E (on standalone basis) the issue at its upper price band is valued at ~7x to its FY23E EPS (adjusted for investment in HAM projects). This is at an attractive valuation as compared to peers, hence we assign a Subscribe rating to the issue.

Source : Equity Bulls

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