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.

 

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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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