Strong debut | Vishnu Prakash R Punglia lists at Rs 165, over 66% premium to issue price

The Rajasthan-based company has raised Rs 308.88 crore via the IPO that comprises only a fresh issue

Vishnu Prakash R Punglia made a bumper debut on the bourses on September 5, at 66.7 percent premium to issue price of Rs 99.

The shares of the engineering, procurement, and construction (EPC) company started trading on the NSE at Rs 165 and on the BSE at Rs 163.30.

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The listing was in-line with analysts' expectations, given the robust IPO subscription numbers, increasing focus on the infrastructure space by the government, strong order book and reasonable valuations.

The maiden public issue saw a massive 87.82 times subscription, backed by all categories of investors. Qualified institutional buyers and high networth individuals (non-institutional investors) were aggressive amongst them, buying 171.69 times and 111.03 times the allotted quota.

The Rajasthan-based company raised Rs 308.88 crore via the IPO that comprised only a fresh issue. The entire issue proceeds, excluding IPO expenses, will be utilised for the purchase of equipment & machinery, working capital requirements, and general corporate purposes.

The company's financial performance has impressed analysts and investors alike. VPRPL’s topline has clocked ~55 percent CAGR (compound annual growth rate) over the past three years.

"Furthermore, EBITDA grew at 86 percent CAGR over FY21-23, while EBITDA margins improved from 9.3 percent in FY21 to 13.4 percent in FY23, led by benign raw material prices and better absorption of overheads," noted Geojit Research.

Looking at long term rationale, analysts recommend allotted investors to continue holding investments in VPRPL.

"It has high growth potential and will reward investors post listing too. Those investors who look to buy on listing day can accumulate VPRPL if listing is settled on a softer note due to any secondary markets scenario," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said.

Meanwhile, client concentration (93.5 percent of FY23 revenue from the top 10 clients)  and regional concentration (62 percent of the pending order book concentrated in Rajasthan) are being touted as some key risks for the company.

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