HG Infra Engineering to launch its Rs462 crore IPO on 26 February

HG Infra has set a price band of Rs263-270 per share for the IPO. The offer will close on 28 February.

Mumbai: Jodhpur-based HG Infra Engineering Ltd on Friday said it will launch its Rs462 crore initial public offering on 26 February.

HG Infra has set a price band of Rs263-270 per share for the IPO. The offer will close on 28 February.

The initial share sale comprises a fresh issue of shares of Rs300 crore and an offer for sale of 6 million shares by the promoters of the company. At the upper end of the price band, the share sale will fetch promoters about Rs162 crore.

The proceeds from the fresh issue will be utilized for purchasing equipment, repayment of debt and meeting general corporate expenses.

Founded in 2003, HG Infra is an infrastructure construction, development and management company with an extensive focus on road projects, including highways, bridges and flyovers. Its main business operations include providing engineering, procurement and construction (EPC) services and undertaking civil construction projects.

The company forayed into executing water pipeline projects and is currently undertaking two water supply projects in Rajasthan on a turnkey basis which includes the designing, construction, operation and maintenance of the project.

According to Harendra Singh, managing director of HG Infra, out of the total projects executed or being executed by the company, the share of Maharashtra and Rajasthan accounts for 48% and 45%, respectively, while the remaining share is occupied by Uttar Pradesh, Haryana, Uttarakhand and Arunachal Pradesh.

Despite, having a fixed assets base of approximately Rs205 as on 31 March 2017, HG Infra will invest more Rs90 crore on capital equipment from the fresh issue.

“We want to have big in-house plants and equipment. We outsource only 10-15% of our work, mainly on the transportation front,” Singh added.

In fiscal 2017, the company reported a revenue of Rs974 crore, an increase of 36% from the previous fiscal. It reported a profit of Rs533 crore in 2016-17.

SBI Capital Markets Ltd and HDFC Bank Ltd are managing the HG Infra share sale.

HG Infra is only the third road infrastructure company to launch its IPO since 2016.

Last year, Bharat Road Network Ltd, a road and highways company launched its Rs600 crore IPO. The IPO was subscribed 1.8 times on the last day of its share sale.

In 2016, mid-sized construction company and roads developer Dilip Buildcon Ltd raised Rs664 crore by going public.

In 2017, 36 companies raised Rs67,147 crore through IPOs, a record for the Indian primary market, according to data from primary market tracker Prime Database. In 2016, 26 companies had raised Rs26,493.8 crore from the IPO market.