GR Infraprojects IPO: What You Need To Know

GR Infraprojects Ltd. will launch a Rs 964.4-crore initial public offering on Wednesday as private equity investors look to exit and promoters plan to pare holdings in the roads and highway developer.

The three-day IPO, opening on July 7, is an offer-for-sale of 1.15 crore shares by promoters and private equity arm of Motilal Oswal group — IBEF-I and IBEF, according to the north India-based company's red herring prospectus. The price band has been fixed at Rs 828-837 apiece.

The offer-for-sale is to provide exit to the private equity player. The company does not need growth capital, said Vinod Kumar Agarwal, chairman at GR Infraprojects, in an interaction with BloombergQuint. It will use internal accruals and debt to provide capital for hybrid annuity model projects, he said. The 14 HAM projects, according to Agarwal, will be hived off into an infrastructure investment trust over the next few years upon being completed to release the capital.

Key Details

• Offer for sale: Rs 952.9-964.4 crore.

• Minimum bid size: 17 equity shares and in multiples thereof

• Listing: NSE and BSE.

• Book running lead managers: HDFC Bank, ICICI Securities, Kotak Mahindra Capital, Motilal Oswal Investment Banking, SBI Capital Markets, Equirus

After the issue, market value of the company, according to BloombergQuint's calculation, will be Rs 8,102.5 crore at the upper end of the price band.

Watch the full interview here:

Ownership

The offer-for-sale comprises 11.90% of the post-issue equity capital. After the share sale, public will hold 13.46% of the equity.

Business

GR Infraprojects' principal business is civil construction comprising engineering, procurement & construction; build-operate-transfer; and HAM projects in the road sector. Since 2006, it has executed more than 100 road construction projects.

The company has one operational road project, constructed and developed on a BOT (annuity) basis; and 14 awarded under the HAM model. Of these, five road projects are currently operational, four are under construction; while construction is yet to commence on the remaining five.

Operational Metrics

GR Infraprojects has an order book of Rs 19,025.8 crore, primarily comprising EPC and HAM projects in the road sector across Uttar Pradesh, Madhya Pradesh, Maharashtra, Gujarat, Chattisgarh, Rajasthan, Andhra Pradesh, Bihar, Manipur, Odisha and Himachal Pradesh.

The company, Agarwal said, aims to add Rs 15,000 crore of order book in the fiscal ending March 2022.

It had a consolidated debt worth Rs 4,494.9 crore as of March 2021.

Financial Metrics

The highway developer saw its revenue grow at an annualised rate of 32.59% in the last four years, while its profit reported a CAGR of 25% during the same period, according to the red herring prospectus.

Peer Comparison

GR Infraprojects competes with IRB Infrastructure Ltd., Ashoka Buildcon Ltd., Dilip Buildcon Ltd., and PNV Infratech, among others, to bag orders from the National Highway Authority of India and the Ministry of Road Transport and Highways.