Bondada Engineering IPO - Review, Valuation & Todays GMP

Bondada Engineering Limited - Complete Overview

Established in 2012, Bondada Engineering Limited is a certified integrated infrastructure company specializing in offering engineering, procurement, and construction (EPC) services, as well as operations and maintenance (O&M) services to clients across India's telecom and solar energy sectors.

The company has earned recognition for its achievements, receiving the "Telecom Infrastructure Services Provider" award for 2021 from the Economic Times and being named "Company of the Year" for 2023 by the Global India Business Forum.

Bondada Engineering Limited delivers passive telecom infrastructure solutions, encompassing comprehensive services for cell site construction, erection, operation, and maintenance of telecom towers. This includes civil, electrical, and mechanical work, pole and tower supply, optical fibre cable laying and upkeep, power equipment provisioning, and other related services. 

The company serves prominent telecom companies and tower operators in India, having successfully installed over 11,600 telecom towers and poles, with more than 7,700 installations completed in the past three fiscal years.

Additionally, the company extends O&M services to telecom and tower operating entities. This involves maintaining passive infrastructure and equipment, backup power systems, surveillance, riggers supply, optical fibre cable route maintenance, and related facilities.

Bondada Engineering Limited's current tower manufacturing facility, situated in Rampally Dayara Village, Keesara Mandal, Medchal District, Telangana, possesses an installed capacity of around 12 thousand metric tonnes per annum (MTPA) for tower fabrication.

 

What does the company do?

Bondada Engineering Limited is a certified integrated infrastructure company specializing in offering engineering, procurement, and construction (EPC) services, as well as operations and maintenance (O&M) services to clients across India's telecom and solar energy sector.

 

 

IPO Overview

The upcoming IPO for Bondada Engineering Limited is set to be open for subscription from August 18th to August 22nd, 2023. This IPO follows a fixed price issue and is intended for listing on the BSE SME platform.

Bondada Engineering shares price is Rs.75, with a face value of Rs.10 per share. The total size of the issue comprises 5,696,000 shares, which collectively amounts to Rs.42.72 Crores.

The company has allotted 50% of the shares to other investors, while 35% of the shares are reserved for retail investors.

 

Bondada Engineering Limited IPO Timetable (Tentative)

EVENTS	DATE
IPO Opening Date	18 August 2023
IPO Closing Date	22 August 2023
IPO Allotment Date	25 August 2023
Refund initiation	28 August 2023
IPO Listing Date	30 August 2023

 

Bondada Engineering Limited IPO Details

IPO Opening & Closing Date	18 August to 22 August 2023
Face Value	Rs. 10 per share
Issue Price	Rs. 75 per share
Lot Size	1600 Shares
Price of 1 Lot	Rs. 120,000
Issue Size	5,696,000 Shares (aggregating up to Rs. 42.72 Cr)
Offer for Sale	NA
Fresh Issue	5,696,000 Shares (aggregating up to Rs. 42.72 Cr)
Listing at	BSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Kfin Technologies Limited

 

Bondada Engineering Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Bondada Engineering Limited IPO Reservation

Other Investors Portion	50%
Retail Investors Portion	50%

 

Company Financial

Amount in Lakhs

Period	FY 21	FY 22	FY 23
Total Assets	17091.69	15761.73	25115.46
Total Revenue	28832.29	33420.96	37095.77
PAT	920.55	1013.53	1825.19
Net Worth	4775.88	5789.41	7837.54
Reserve & Surplus	4693.88	5707.41	6246.93
Total Borrowings	4667.31	3803.23	8422.65

 

Revenue Generated from various operations

(Amount in Lakhs)

Particular	FY 23	FY 22	FY 21
A. Revenue from EPC Services	23,710.55	16,694.49	9,048.02
i. Telecom Tower EPC	3,790.24	3,001.80	1,734.14
ii. Telecom OFC EPC	1,909.26	2,747.69	2,500.97
iii. Solar EPC	18,011.05	10,945.00	4,812.91
B. Revenue from O&M Services	5,116.22	8,362.15	13,947.06
i. Telecom OFC O&M	5,101.27	8,362.15	13,947.06
ii. Solar O&M	14.95	-	-
C. Revenue from tower manufacturing	4,275.09	4,925.70	3,077.40
D. Revenue from the sale of AAC Blocks and other construction products	2,689.47	2,796.26	2,028.33
E. Revenue from the sale of uPVC products	1,267.52	632.50	608.49
F. Total [A+B+C+D+E]	37,058.85	33,411.11	28,709.30

 

Objective of the Issue

The company intends to utilize the funds for the following purposes:

• Addressing long-term working capital needs.
• Fulfilling general corporate objectives.

 

Promoters and Management of Bondada Engineering Limited

The individuals who spearheaded the company's success and guided it to new heights are Raghavendra Rao Bondada, Neelima Bondada, and Satyanarayana Baratam, who serve as the key promoters.

Pre-issue Promoters Holding	86.00%
Post-issue Promoters Holding

 

Peer Comparison

The company is involved in several business operations and has indicated in the Bondada Engineering Limited DRHP that there are no comparable listed companies in India.

 

IPO's Valuations

The IPO valuation of Bondada Engineering Limited can be derived using the data provided in its DRHP. With an EPS of Rs.11.43 per share and a P/E ratio of 6.56, the calculated share price amounts to Rs.75.

 

Dividend Policy

In FY 23, the company disbursed a dividend of Rs. 0.12 per equity share, while in FY 22, the dividend was Rs. 2.00 per equity share. The future payment of dividends depends on the company's financial performance in the share market.

 

IPO's Strengths

• Proficient in project management and effective execution.
• Secured long-term contracts for telecom and solar projects, ensuring foresight into future revenues.
• Skillfully managing varied business operations in response to increasing demand.
• Backed by an experienced management team and committed employee workforce.

 

IPO Weaknesses

• The company's revenue heavily relies on a limited number of customers.
• Bidding for government tenders is ongoing, but winning bids or converting purchase orders into confirmed orders is not guaranteed, potentially impacting revenue.
• EPC and O&M contract awards are vital, but changes and cancellations can affect future revenues and profit.
• The company operates within a competitive business environment.
• O&M contract agreements with telecom tower operators contain clauses that could negatively affect business and financial conditions.
• Certain loan agreements have restrictive covenants that might impact the company's financial situation.
• Deployment of Net Proceeds lacks independent appraisal and monitoring.
• Compliance with various laws and regulations, including environmental, health, safety, and labour laws, is essential.
• Unsecured loans from related parties totalling Rs. 370.75 lakhs are subject to potential recall by the Promoter.
• Information about manufacturing capacity and production in the Prospectus is based on assumptions and estimates.
• Legal claims and litigation involving the company, its Subsidiaries, Directors, and Promoters exist.
• Insurance policies may not fully cover incurred losses.
• Previous instances of non-compliance and discrepancies in secretarial records exist.
• Approvals, licenses, registrations, and permits are crucial for operations, with potential adverse effects if not obtained or renewed in a timely manner.
• Contingent liabilities pose a potential adverse impact on financial condition.
• The company has experienced negative cash flows in the past.

 

 

IPO GMP Today

Latest GMP of Bondada Engineering Ltd. IPO is Rs. 15.

 

Conclusion

The Bondada Engineering Limited IPO presents a promising opportunity for investors. With the company demonstrating steady growth and a promising future outlook, seasoned investors seeking medium to long-term prospects may consider applying for the IPO.

 

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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