Udayshivakumar Infra IPO Review – Should you Invest?

Udayshivakumar Infrastructure is engaged in the construction of roads and is coming up with IPO now. Udayshivakumar Infra IPO opens on Mar 20, 2023, and closes on Mar 23, 2023. The entire IPO proceeds are fresh issue which would be used for working capital requirement. This article provides Udayshivakumar Infra IPO details, IPO dates, Financials and complete IPO Review.

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About Udayshivakumar Infra Limited

Company is engaged in the business of construction of roads.

This includes National Highways, State Highways, District Roads, Smart Roads under PM’s Smart City Mission projects,Smart Roads under Municipal Corporations, Bruhat Bengaluru Mahanagara Palike and Local Area Roads in various Taluka Places etc., in the State of Karnataka, Constructions of Bridges across Major and Minor Rivers, Railway Over Bridges (ROB), construction of Major and Minor Irrigation and canal projects, Industrial Areas, based in the State of Karnataka.

They bid for Roads, Bridges, Irrigation & Canals, Industrial Area construction in the State of Karnataka including Government Departments such as Karnataka Public Works Ports & Inland Water Transport Department, National Highways, Belgaum Smart City Ltd. and Davangere Smart City Ltd., Bruhat Bengaluru Mahanagara Palike, Various Municipal City Corporations, State Highway Development Corporations Ltd. etc.,

Udayshivakumar Infra IPO Review

Udayshivakumar Infra IPO Issue Details

Here are the IPO issue details.

IPO Opening Date 20-Mar-23
IPO Closing Date 23-Mar-23
IPO Listing Date 03-Apr-23
Issue Type Book Built Issue IPO
Face Value Rs 10 per equity share
IPO Price band Rs 33 to Rs 35 per equity share
Lot Size 428 Shares
Min Order Quantity 428 Shares
Listing at BSE and NSE
Total Issue Size Rs. 66 Crores
QIB shares offered Not less than 10% of the offer
NII/HNI shares offered Not more than 30% of the offer
Retail shares offered Not more than 60% of the offer
Company Promoters Mr. Udayshivakumar is the promoter of the company

Udayshivakumar Infra IPO – Company Financials

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 Sep-22
Total Assets 158.3 146.8 162.6 178.9
Revenues 194.4 211.1 186.4 107.1
Profit After Tax 10.5 9.3 12.2 10.0
Profit % 5.40% 4.41% 6.52% 9.35%

Udayshivakumar Infra IPO Valuations

Its IPO price band is Rs 30 to Rs 35.

If we consider last year FY22 EPS of Rs 3.33, P/E ratio works out to be 10.5x.

If we consider last 3 years weighted average EPS of Rs 2.99, P/E ratio works out to be 11.7x.

Even if we consider 6 months ended Sep-22 EPS of Rs 2.75 and annualize it, P/E ratio works out to be 6.3x.

The listed peers like IRB Infra is trading at P/E 32x (Highest) and HG Infra trading at P/E of 11.3x (Lowest) and industry average P/E is 19.2x. Hence, the Udayshivakumar IPO Price band at P/E of 6.3x to 11.7x is attractively priced.

Positive Factors to invest in Udayshivakumar Infra IPO

Company focuses on roads, flyovers and bridge construction activities in India with strong execution capabilities and industry experience. Currently, it has a strong order book of roads/flyovers/bridges from the Karnataka State Government.

Company has generated stable revenues and margins in the last 3.5 years.

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Risk or Negative factors of investing in Udayshivakumar Infra IPO

Company business is concentrated in Karnataka state only. Any adverse change in such single state can affect company business.

Company business is largely from Karnataka State Govt. Any change in government strategy or policies can have severe impact on the company financial performance.

Investors can read complete risk factors from RHP of the company.

Should you invest in Udayshivakumar Infra IPO?

Company is the business of construction of roads, flyovers and bridges and generated stable revenues and margins in the last 3.5 years. Company IPO price is attractively priced.

On the other side, company business is concentrated in Karnataka State only and largely dependent on State Government. Any change in government policies or strategy can adversely affect the company.

Currently there is a huge stock market correction happening. Investors can review and look at investing in such companies after market stabilises.

Udayshivakumar Infra IPO Review and Analysis is based on RHP filing on SEBI website

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Suresh KP

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