The Rs 963-crore of GR Infraprojects continued to witness healthy demand from investors as it received subscription of 102.58 times on July 9, the final day of bidding.
Investors have applied for 83.33 crore equity shares, so far, against the offer size of 81.23 lakh equity shares, the subscription data available on exchanges showed.
The portion set aside for qualified institutional buyers is subscribed 168.58 times and that of non-institutional investors is 238.04 times. Retail investors have put in bids 12.57 times their reserved portion and employees applied for 1.37 times their portion.
GR Infraprojects opened its public issue for bidding on July 7, which consisted of an offer for sale by existing selling shareholders.
Anchor investors have already invested Rs 283 crore in the company, on July 6, against 33,85,110 equity shares at a price of Rs 837 per equity share.
"At higher price band of Rs 837, GR Infra is demanding a P/E multiple of 8.5x (to its FY21 earnings of Rs 98.6 per share), which is at discount to the peer average. Thus the issue seems to be attractively priced," said Choice Broking.
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The brokerage further said, "Considering the government's focus on enhancing infrastructure assets in the country, primarily the road construction space will continue to attract private capital. GR Infra with its efficient operations is well placed to benefit from the growth in the sector."
However, with concerns on the sustainability of the EPC profitability in the near term, Choice Broking assigned a 'subscribe for long term' rating for the issue.
GR Infraprojects is an integrated road EPC company with experience in design and construction of various road/highway projects across 15 States in India. Recently, the company diversified into railway sector projects.
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Among the EPC players, GR Infra was the fastest growing company with an operating income growth of 47 percent CAGR over FY15-20. Moreover, in terms of profitability, it reported highest growth in EBITDA and reported PAT among the EPC players.
As of March 2021, the company had an order book of Rs 19,026 crore, which is around 2.7x of the construction services income. The order book comprising of 16 road EPC projects, 10 hybrid annuity model (HAM) projects and three other projects, spanned across the states of Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat, Chhattisgarh, Rajasthan, Andhra Pradesh, Bihar, Manipur, Odisha, Himachal Pradesh, West Bengal, Andaman & Nicobar Islands, Jharkhand and Sikkim. Further orders from NHAI constituted around 87.2 percent of the order book.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.