HG Infra Engineering Ltd is a company, who are engaged in infrastructure construction as well as in development and management. They have huge experience in their focus area of road projects that include highways, bridges, and flyovers. They are based at Jaipur, Rajasthan. Their new issue will be listed on the stock exchanges and will be open for applying to start from February 26th. So, I will check the draft red herring prospectus and evaluate the issue price and grey market premium (GMP) to post my HG Infra Engineering Ltd IPO Review for the investors.
About HG Infra Engineering Ltd IPO :
- IPO Opens on – February 26, 2018.
- IPO Closes on – February 28, 2018.
- Face Value – Rs. 10 Per Equity Share.
- Issue Price – Rs. 263 – Rs. 270 Per Equity Share.
- Issue Type – Book Built Issue IPO.
- Retail Allocation – 35%
- Market Lot – 55 Shares.
- Minimum Order Quantity – 55 Shares.
- Issue Size – Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to Rs 300.00 Cr and Offer for Sale of [.] Equity Shares of Rs 10 aggregating up to Rs 0.60 Cr.
- Listing Exchange – NSE and BSE.
- Draft Prospectus – Download.
Objectives of the issue:
- The Offer for Sale –
This company will not receive any proceeds of the offer for sale by the selling shareholders.
- The Fresh Issue –
(a) Purchasing capital equipment.
(b) Repayment/ prepayment in part or in full, of certain indebtedness.
(c) General corporate purposes.
About The Company –
- H.G. Infra Engineering Ltd is incorporated in 2003.
- This company’s main business operations include providing engineering, procurement, and construction (EPC) services on a fixed-sum turnkey basis and undertaking civil construction and related infrastructure projects.
- H.G. Infra Engineering Ltd (HGIEL) is also engaged in executing water pipeline projects and are currently have two water supply projects in Rajasthan.
- This company has completed 13 large projects in the roads and highways sector aggregating to a total contract value of 16,748.94 million, which included construction, improving, widening, strengthening of two and four-lane highways. Apart from that it also included the construction of the high-level bridge as well as the construction of earthen embankment, culverts as well as cart track underpasses.
- Now this company has 21 ongoing projects in the roads and highways sector.
- H.G. Infra Engineering Ltd is pre-qualified to bid independently on an annual basis for bids by NHAI and MoRTH.
- This company’s public sector clients include NHAI, PWD, MES and Jaipur Development Authority.
Promoters of the company :
- Mr. Harendra Singh is the promoter of this company.
- Mr. Vijendra Singh is one of the promoters of this company.
- Mr. Girish Pal Singh is also a promoter of this company.
HG Infra Engineering Ltd IPO Review:
The financial data shows the profitability saw a dip in the financial year 2014 and then it dropped a lot on the financial year 2015. That may be due to the debt of the company. However, on the FY 2016 and FY 2017, the company has again managed to post decent profits. Post issue the company can show even better performance once their debt burden is lightened and they invest in the capital equipment. At present the grey market premium is hovering around Rs. 35 – Rs. 40 which does not reflect huge listing gains as of now. However, the issue is fully priced with an earnings per share of 7.65 and our HG Infra Engineering Ltd IPO Review feels returns can be made over medium to longer term. Hence, we have a NEUTRAL view on this issue. If you are too aggressive to get listing gains, don’t forget to check our last day IPO selection method before applying.