Vishnu Prakash R Punglia IPO sails through within 2 hours of opening

The initial public offer (IPO) of Vishnu Prakash R Punglia was fully subscribed within a few hours of the bidding process on Thursday.

The issue was subscribed 1.39 times as of 12.19 pm, driven by strong demand from non-institutional and retail investors.

The retail portion of the issue was subscribed 2.03 times, and the non-institutional category's subscription rate stood at 1.78 times. There were no bids from qualified institutional buyers so far.

The IPO of Jodhpur-based Vishnu Prakash R Punglia opened for subscription earlier today. The issue closes on August 28.

Ahead of the IPO opening, the company raised nearly Rs 92 crore from anchor investors where Quant MF, Kotak Mahindra Life Insurance Company and Max Life Insurance Company among others participated.

Analysts recommended investors to subscribe to the issue as the company has a healthy order book and industry tailwinds are expected to benefit in profitability in the coming years. "On the valuation front, we believe the company is fairly priced. We recommend a "subscribe – long term" rating to the IPO," said Anand Rathi.

Vishnu Prakash R Punglia is a construction company that is primarily engaged in infrastructure projects for the central and state governments. The company is focused on water supply projects and is benefiting from various government initiatives.

As of July 15, 2023, the company has 51 ongoing projects with total work awarded amounting to Rs 6,183 crore, of which Rs 2,384 crore worth of work has been executed and the remaining work amounting to Rs 3,799 crore constitutes the order book.

The equipment fleet comprised about 499 construction equipment and vehicles, as of March 2023. Further, the aggregate gross block value of the company’s property, plant and equipment was Rs 136 crore.

Swastika Investmart said the company faces stiff competition and high working capital requirements and that there is also the risk of project implementation delays and cost overruns.

Despite the negatives, the brokerage advised investors to subscribe to the IPO over fair valuations and overall bullishness in the infra sector.

The company has fixed a price band of Rs 94-99 per share and investors can bid for a minimum of 150 shares in one lot and in multiples thereafter.

About 50% of the offer is set aside for qualified institutional buyers, 15% for non-institutional investors and 35% for retail investors.

According to market sources, the grey market premium (GMP) of Vishnu Prakash R Punglia was Rs 50-54.

Choice Capital Advisors and Pantomath Capital Advisors are the book-running lead managers and Link Intime India is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)