Vishnu Prakash R Punglia gets hefty premium on listing. What should investors do?

Vishnu Prakash R Punglia made its debut on the stock markets on Tuesday, listing on the exchange at Rs 163 per share, with a gain of around 64%.

Upon listing, the shares fell over 10% before closing at Rs 145.93 on BSE.

The company’s strong listing was in line with analysts’ expectations, given the well-established business with a strong track record in the water supply sector.

“The company is benefiting from various government initiatives, which are likely to boost its growth in the coming years. Investors who participated in the IPO can either book profits or hold for the long term,” said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

The IPO was well-received by investors, with the overall subscription at 87.82 times.

The IPO was priced at Rs 99 at the upper end. The company is valued at P/E of 13x with a market cap of Rs 1,234 crore post issue of equity shares and return on net worth of 38.3%, according to analysts.

Vishnu Prakash R Punglia is a construction company that is primarily engaged in infrastructure projects for the central and state governments. The company is focused on water supply projects and is benefiting from various government initiatives.As on July 15, 2023, the company has 51 ongoing projects with total work awarded amounting to Rs 6,183 crore, of which Rs 2,384 crore worth of work has been executed and the remaining work amounting to Rs 3,799 crore constitutes the order book.

The equipment fleet comprised about 499 construction equipment and vehicles, as of March 2023. Further, the aggregate gross block value of the company’s property, plant and equipment was Rs 136 crore.

The company proposes to utilise the net proceeds to purchase capital equipment, funding working capital requirements and other general corporate purposes.

Vishnu Prakash’s revenue from operations increased to Rs 1,168 crore in the financial year ended March 2023, showcasing a CAGR of 55.1% over FY21-FY23.

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