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K2 Infragen Ltd. IPO: Review, Valuation, Date & GMP

  


K2 Infragen Limited IPO  - Complete Overview

Founded in 2015, K2 Infragen Limited is an integrated engineering, procurement, and construction (EPC) firm primarily focused on Power Engineering and Project Engineering.

Initially incorporated as 'K2 Powergen Private Limited', the company undertakes various projects across 8 states in India, including Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab, and Delhi.

The company's business activities are broadly categorized as follows:

1. Engineering, Procurement, and Construction (EPC):

   a. Contract Business: Involves detailed project design and engineering, procurement of key materials, and on-site project execution with overall project management until project commissioning. This encompasses a range of projects such as water supply, railroad, road construction, and civil construction works.

   b. Service Business: Includes project structuring, scheduling, manpower planning, logistics management, and timely project execution and completion. Construction services cover the design, procurement, and construction of various projects, including buildings, boundary walls, transmission lines, and water projects. Services provided entail planning, surveying, project management, and quality supervision.

2. Trading Business:

Involves the procurement of materials, including non-ferrous metals, sourced from the open market and occasionally through auction processes.

As of March 22, 2024, the company employs a total of 61 individuals.

K2 Infragen Limited IPO Overview

K2 Infragen LimitedIPO date is slated to be open for subscription from March 28, 2024, to April 3, 2024. This NSE SME IPO follows a Book Built Issue IPO.

K2 Infragen Limited IPO price is fixed in the range of Rs.111 to Rs.119 per share. 

The total issue size of this IPO amounts to Rs.40.54 Cr. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non-instituional investors.

 

 

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, K2 Infragen Limited has seen growth in total assets, net worth, and total revenue. The profit after tax has also increased.

(Amount in Lakhs)

Period

30 Sep 2023

31 Mar 2023

31 Mar 2022

Total Assets 

6,378.79

5,690.40

2,591.14

Total Revenue

5,967.98

7,490.08

3,685.20

PAT

607.45

1,132.32

-311.26

Net worth

2,535.32

1,392.45

133.84

Reserve & Surplus 

1,611.24

1,165.10

-96.26

 

Category-wise Revenue Breakup

(Amount in Lakhs)

Category of Project

For the period ended September 30, 2023

Fiscal 2023 

Fiscal 2022

Civil Construction Work 

1,056.09 

159.71 

810.05

Turnkey Water Supply Projects 

4,867.75 

2,540.44 

NIL

Railway Projects 

NIL 

16.89 

NIL

Road Projects 

15.04 

NIL 

369.12

Road Projects 

15.04 

NIL 

369.12

 

State-wise revenue breakup

(Amount in Lakhs)

State

For the period ended September 30, 2023

Fiscal 2023 

Fiscal 2022

Delhi

-

-

40.7

Haryana

55.31 

22.20 

68.0

Himachal Pradesh

-

-

-

Rajasthan

63.58

-

-

Uttar Pradesh

5,808.82 

79.5 

712.7

Karnataka

-

-

-

Gujarat

3.27

-

-

Madhya Pradesh

7.9

-

-

Total

5,938.87 

101.6 

821.4

 

 


Vertical-wise revenue breakup

(Amount in Lakhs)

Vertical

For the period ended September 30, 2023

Fiscal 2023 

Fiscal 2022

Revenue from Contracts 

5,257.14 

2,717.04 

1,179.17

Revenue from Services

681.73 

3,653.90 

Nil

Revenue from Services 

681.73 

3,653.90 

Nil

Total 

5,938.87 

6,472.54 

2,000.57

 

Revenue from Government and Non-Government projects

(Amount in Lakhs)

Particulars

FY 22 (Audited) 

FY 23 (Audited)

For the period ended September 30, 2023 (Audited)

Government Business

1,148.25 

681.73 

5,257.14

Non-Government Business

852.36 

5,257.14 

681.73

Total

2,000.61 

5,938.87

5,938.87

 

The Objective of the Issue

The company aims to utilize the Net Proceeds of the Issue for the following purposes:

  1. Fulfilling working capital requirements

  2. Undertaking capital expenditure

  3. Covering general corporate expenses

Peers of K2 Infragen Limited IPO

Name of the Company

Face Value (Rs)

EPS (Rs)

P/E Ratio

K2 Infragen Limited

10

15.40

-

Markolines Pavement Technologies Ltd

10

8.24

12.68

W S Industries (India) Ltd

10

3.99

8.16

Udayshivakumar Infra Ltd

10

4.37

NA

Advait Infratech Ltd

10

15.59

17.91

 

 

 

Evaluation

The IPO is priced within the range of Rs.111 to Rs.119 per share.

Evaluation of P/E Ratio

  • Considering the FY23 EPS of Rs 15.40 from the last year, the resulting P/E ratio is 7.72x.

  • Taking into account the weighted EPS of Rs 6.83 for the last three years, the P/E ratio amounts to 17.42x.

Comparative Analysis with Listed Peers

  • The industry's average P/E is 12.92x.

As a result, the IPO price range, with a P/E ratio ranging from 7.72x to 17.42x, seems neutrally priced to the industry average of 12.92x.

 

IPO's Strengths 

  • Experience promoters and a robust management team.

  • Specialized focus on EPC services.

  • Maintains a substantial order book.

  • Demonstrated track record of punctual project completion.

  • Operates on an in-house integrated model.

IPO weaknesses 

  • Absence of Challan Record in Connection with Form Filed with the Registrar of Companies.

  • Dependency on a limited number of clients for a significant portion of revenue makes the business vulnerable to the loss of key clients.

  • Existence of contingent liabilities, such as pending litigation with the Public Works Department Rajasthan.

  • Acquisition of projects primarily through competitive bidding, leading to uncertainty regarding the acceptance of the company's bids.

  • Exposure to risks associated with conducting a significant portion of business transactions with government or government agencies in India, potentially leading to additional regulatory scrutiny.

  • Negative cash flows in the past were experienced by the company.

  • Possibility of irregularities in some agreements entered into by the company.

IPO GMP Today 

The Latest GMP of K2 Infragen Limited is Rs.63.

K2 Infragen Limited IPO timetable (Tentative)

K2 Infragen Limited IPO is scheduled from March 28 to April 3, 2024, with allotment on April 4, refund initiation on April 5, and listing on April 8, 2024.

Events 

Date

IPO Opening Date

March 28, 2024

IPO Closing Date

April 3, 2024

IPO Allotment Date 

April 4, 2024

Refund initiation 

April 5, 2024

IPO Listing Date

April 8, 2024

 

 

 

K2 Infragen Limited IPO Details 

K2 Infragen Limited IPO, with a face value of Rs.10 per share, opens on March 28 and closes on April 3, 2024, offering 3,406,800 shares at Rs.111 to Rs.119 per share, with a lot size of 1200 shares, aiming to raise Rs.40.54 Cr, and will be listed on NSE SME.

IPO opening & closing date 

March 28, 2024 to April 3, 2024

Face value 

₹10 per share

Issue Price

₹111 to ₹119 per share

Lot Size

1200 Shares

Price of 1 lot

₹142,800

Issue Size

3,406,800 shares (aggregating up to ₹40.54 Cr)

Fresh issue 

3,406,800 shares (aggregating up to ₹40.54 Cr)

Listing at

NSE SME

Issue Type 

Book Built Issue IPO

Registrar 

Kfin Technologies Limited

 

K2 Infragen Limited IPO Lot Details 

For K2 Infragen Limited IPO, the retail investor minimum and maximum lot investments are both 1 lot (1200 shares) at Rs.142,800 while for HNI investors, the minimum investment is 2 lots (2400 shares) at Rs.285,600.

Minimum Lot Investment (Retail) 

1 lot

Maximum Lot Investment (Retail) 

1 lot

Minimum Lot Investment (HNI) 

2 lot

 

K2 Infragen Limited IPO Reservation

Institutional share Portion

50%

Non-institutional share Portion

15%

Retail share Portion

35%

Promoters and Management of K2 Infragen Limted

  • Mr. Pankaj Sharma

  • Ms. Priya Sharma

  • Mr. Rajesh Tiwari

  • Mr. Rajiv Khandelwal

  • Mr. Sarvajeet Singh

Pre-issue Promoter shareholding

55.29%

Post-issue Promoter shareholding

40.36%

 

K2 Infragen Limited IPO Lead Managers

  • Expert Global Consultants Private Limited 

Dividend Policy

The company has not distributed any dividends on its Equity Shares in the past. The potential for future dividend payments hinges on the financial performance of the company.

 

 

Conclusion

K2 Infragen, an engineering, procurement, and construction (EPC) firm, boasts a robust order book and a proven track record. Despite encountering negative cash flow in previous periods, seasoned investors may consider the upcoming IPO, assessing all factors meticulously to maximize potential returns.

 

.

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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Frequently Asked Questions

+

The IPO is scheduled to open for subscription on March 28, 2024.

 

+

The issue price for K2 Infragen Limited IPO is set in the range of ₹111 to ₹119 per share.

 

+

The total issue size of the IPO is Rs.40.54 Cr, with 35% reserved for retail investors.

 

+

The IPO is set to close on April 3, 2024.

 

+

The net proceeds from the IPO will be allocated towards meeting the company's working capital requirements, funding capital expenditure, and addressing general corporate purposes.

 



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