Vishnu Prakash makes strong debut; lists 67% higher over its issue price

The stock listed at Rs 165, a 67% premium over its issue price of Rs 99 per share on the NSE

Vishnu Prakash R Punglia (VPRP) made a strong market debut on the bourses with its shares listing at Rs 165, a 67 per cent premium over its issue price of Rs 99 per share on the National Stock Exchange (NSE) on Tuesday.

The stock of the civil construction company has listed at Rs 163.30 on the BSE.

However, post listing, the stock was down 11 per cent to Rs 146.55 from its opening level on the NSE. On the BSE, the stock hit a low of Rs 146.45 in intra-day trade. At 10:01 am; it was quoting at Rs 148.05, up 50 per cent over its issue price on the NSE. A combined around 15 million shares had changed hands on the NSE and BSE.

"The company's listing was in line with expectations, as it is well-established with a strong track record in the water supply sector. The company is also 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 immediately or hold on to their shares for the long term," said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart 

The Rs 309 crore-IPO was subscribed 87.82 times. The portion for qualified institutional bidders (QIBs) was booked 171.69 times while the non-institutional investor (NII) category was subscribed 111.03 times. The retail quota got 32.01 times subscription.

The net proceeds from the fresh issue will be utilised towards funding working capital requirements (Rs 150 crore) and capex for purchase of equipments/machineries (Rs 62 crore).

VPRP is engaged in the business of designing and constructing infrastructure projects for the Central and State Governments, autonomous bodies, and private bodies across 9 States and 1 Union territory in India. The company's principal business operations are broadly divided into four categories, Water Supply Projects, Railway Projects; Road Projects and Irrigation Network Projects.

VPRP’s niche focus on WSP (Water Supply Projects), low revenue base and demonstrated track record of high growth with margin expansion along with reasonable valuations makes the issue attractive compared to listed peers, said analysts. With strong industry tailwinds likely to persist in water related projects, railways and roads, analysts at Nirmal Bang Securities believe VPRP is a decent proxy play on the infrastructure industry offering high growth with good profitability.

VPRPL has gradually increased their capabilities in terms of the size of projects executed. The infrastructure sector which is a key driver for the Indian economy, is likely to provide several growth opportunities to the company. Moreover, with the Union budget 2023-23, the company stands to benefit from various government initiatives in infrastructure, waster waste management, road and highway Industry, according to analysts at Reliance Securities.