Vishnu Prakash R Punglia Limited’s Initial Public Offering to open on Thursday, August 24, 2023, sets price band at ₹94 to ₹99 per Equity Share

 Vishnu Prakash R Punglia Limited’s Initial Public Offering to open on Thursday, August 24, 2023, sets price band at ₹94 to ₹99 per Equity Share

·         Price Band of ₹94 – ₹99 per equity share bearing face value of ₹10 each (“Equity Shares”)

·         Bid/Offer Opening Date – Thursday, August 24, 2023 and Bid/Offer Closing Date – Monday, August 28, 2023.

·         Minimum Bid Lot is 150 Equity Shares and in multiples of 150 Equity Shares thereafter.

·         The Floor Price is 9.4 times the face value of the Equity Share and the Cap Price is 9.9 times the face value of the Equity Share.

 Risks to Investors

1) Our revenue is concentrated from projects undertaken with Government entities. For FY 2023, 2022 and 2021, our revenue from Government entities constitutes 99.01%, 99.38% and 99.74% of the total revenue from operations. If there is any change in Government policies or focus and/or if we are unable to recover payments in a timely manner, it would adversely affect our business and result of operations.

2) Our free operating cash flow to debt ratio as on March 31, 2023 and March 31, 2022 is negative. Further increase in debt without sustained free cash flows may adversely impact our financial condition and growth of our Company.

3) Our business is concentrated in the state of Rajasthan. As of July 15, 2023, our ongoing projects in Rajasthan state constitute ₹ 23,381.83 million (61.54%) of our pending Order Book and our Revenue from Rajasthan State in FY 2023 constitute ₹ 7,812.43 million (66.86%). Any adverse impact in this region may adversely affect our business, results of operations and financial condition.

4) A significant portion of the projects executed by us are in the Water Supply Projects ("WSPs") segment. For FY 2023, 2022 and 2021, our revenue from WSPs constitute 85.39%, 85.80% and 79.04% of the total revenue from operations.

5) Our business is working capital intensive. Growth in revenue requires substantial increase in our working capital requirements. Our Revenue has grown by 48.73% from ₹7,856.13 million in FY 2022 to ₹11,684.04 million in FY2023. Accordingly, our working capital has also increased by 65.41% from ₹ 2518.42 million in FY2022 to ₹ 4165.81 million in FY2023.

6) We are dependent on our sub-contractors to perform various portions of the contracts awarded to us. The total sub-contracting charges constitute 47.24% of the Revenue from Operations for the financial year ended March 31, 2023. Such dependency exposes us to certain risks such as availability and performance of our sub-contractors.

7) The Price/Earnings ratio based on diluted EPS for Fiscal 2023 for our Company at upper end of the price band is 9.51 times and Price/Earnings ratio of the average industry peer group is 17.22 times.

8) Our projects are exposed to various implementation and other risks, including risks of time and cost overruns, and uncertainties, which may adversely affect our business, financial condition, results of operation, and prospects.

9) Weighted average cost of acquisition of all shares transacted in the (i) last three (3) years, (ii) last one (1) year and (iii) last eighteen (18) months preceding the date of this Red Herring Prospectus

Period	Weighted average cost of acquisition (in ₹)	Cap Price is ‘X’ times the Weighted Average cost of Acquisition	Range of acquisition price:  lowest price-highest price (in₹)
Last one (1) year preceding the date of the RHP	71.67*	1.38	Nil - ₹ 215
Last eighteen (18) months preceding the date of the RHP	71.67*	1.38	Nil - ₹215
Last three (3) years preceding the date of the RHP	71.67*	1.38	Nil - ₹215

*Adjusted for bonus shares allotted.

10) Weighted average cost of acquisition, floor price and cap price

Type of Transactions	WACA (in ₹)	Floor Price (₹94)	Cap Price (₹ 99)
Weighted average cost of acquisition for last 18 months for primary / new issue of shares (equity/ convertible securities), excluding shares issued under ESOP 2018 and issuance of bonus shares, during the 18 months preceding the date of this certificate, where such issuance is equal to or more than five per cent of the fully diluted paid-up share capital of our Company (calculated based on the pre-issue capital before such transaction/s and excluding employee stock options granted but not vested), in a single transaction or multiple transactions combined together over a span of rolling 30 days	71.67#	1.31 times	1.38 times
Weighted average cost of acquisition for last 18 months for secondary sale / acquisition of shares equity/convertible securities), where our Promoters or Promoter Group entities or shareholder(s) having the right to nominate director(s) in our Board are a party to the transaction(excluding gifts)**, during the 18 months preceding the date of this certificate, where either acquisition or sale is equal to or more than five per cent of the fully diluted paid-up share capital of our Company (calculated based on the pre-issue capital before such transaction/s and excluding employee stock options granted but not vested), in a single transaction or multiple transactions combined together over a span of rolling 30 days	N/A^	N/A	N/A

# Adjusted for bonus shares allotted in the ratio of two Equity Shares for every one Equity Share held pursuant to board resolution dated February 14, 2023. ^ There were no secondary sales / acquisition of shares (equity/ convertible securities) transactions in last eighteen (18) months prior to the date of the Red Herring Prospectus. ** There were transactions in Equity Shares on account of transmission of shares between members of promoter and promoter group, which have not been considered as these transactions were for nil consideration.

Name of the BRLM	Total Issues	closed below Issues IPO price on listing date
Choice Capital Advisors Private Limited	* Nil	Not Applicable
Pantomath Capital Advisors Private Limited	* 5	Nil
Common Issues of above BRLMs	Nil	Not Applicable
Total	5	Nil

11) The two BRLMs associated with the Issue have handled 5 public issues in the past three Fiscal years, out of which none of the Issues closed below the Issue Price on the listing date

* Issues handled where there were no common BRLMs

Mumbai, August 21, 2023:Jodhpur-based Vishnu Prakash R Punglia Limited is an integrated Engineering, Procurement and Construction (“EPC”) company, which specializes in water supply projects (WSP) has fixed the price band at ₹94to ₹99per Equity Share for its maiden public offer. The initial public offering (“IPO” or “Offer”) of the Company will open on Thursday, August 24, 2023, for subscription and closes on Monday, August 28, 2023. Investors can bid for a minimum of 150 Equity Shares and in multiples of 150 Equity Shares thereafter.

 

The Public Issue of face value of ₹10 per Equity Share is entirely a fresh issuance of equity shares up to 31,200,000.

 

Led by Promoter Vishnu Prakash Punglia, the EPC Company has a strong operational understanding with a consistent track record in carrying out infrastructure projects for over three decades.  It owns a fleet of about four hundred and ninety-nine construction equipment assets which includes including crushers, excavators, loaders, dozers, paver machines, ready mix concrete plants, concrete mixtures, cranes, tractors and transportation vehicles from some of the leading suppliers.

Its major activities include constructing, designing, building, implementing, operating, maintaining and developing Water Supply Projects (WSPs) including Water Treatment Plants (WTPs) along with pumping stations and laying of pipelines for supply of water, as well as other projects such as Roads, Bridges, Tunnels, Warehouses, Buildings, Railway Buildings including platforms, stations, quarters, administrative buildings, Rail-Over-Bridges and Waste Water Treatment Plants (WWTPs). It also undertakes operations and maintenance services.

The Company’s revenue from operations has increased from ₹4,857.31 million in financial year ended March 31, 2021 to ₹7,856.13 million in financial year ended March 31, 2022 and further to ₹11,684.04 million in financial year ended March 31, 2023 showcasing a CAGR of 55.1%, profit after tax stood at Rs 90.6 crore, whereas EBITDA margin stood at 13.7%.

 

Choice Capital Advisors Private Limited and Pantomath Capital Advisors Private Limited are the book running lead managers and Link Intime India Private Limited is the Registrar to the Offer. The Equity Shares are proposed to be listed on BSE and NSE.