G R Infraprojects: Most oversubscribed IPO in the Road and Highway sector in over a decade
G R Infraprojects Limited (“GRIL” or “Company”), an integrated road engineering, procurement and construction (“EPC”) company with experience in design and construction of various road/highway projects; received bids of 83,33,04,538 shares against the offered 81,23,594 equity shares, as per the 5:00 pm data available on the bourses.
The portion reserved for retail investors was subscribed 12.57 times. While the Qualified Institutional Buyer category was subscribed 168.58 times, the Non-Institutional Investor category was subscribed 238.04 times and Employee Reserved category was subscribed 1.37 times.
The Offer was a complete offer for sale (“Offer for Sale”) at the upper price band of Rs. 837 per share.
Key brokerage houses like Angel Broking, IDBI Capital, Reliance securities, Prabhudas Lilladher and Phillip Capital had given recommendations of “Subscribe” to the issue for long term perspective.
From the total capital outlay provided in the budget estimates for FY 2022, the infrastructure segment occupies a share of 48.6%. In the infrastructure segment, majority of the capital outlay of 40.2% was allocated to the Ministry of Road Transport and Highways with a value of ₹1,082 billion. The total construction spend in the overall infrastructure segment from FY15-19 was valued at ₹17.93 trillion.
Roads had a share of 48.3% in FY15-19. Investments were largely driven by the government’s implementation of the National Highways Development Project (NHDP) and continued emphasis on improving the rural and state road network by various state governments. Bharatmala Pariyojana (BMP) is a new umbrella scheme, which supersedes the existing National Highways Development Programme (NHDP). The programme envisages to construct about 65,000 km of highways under National Corridor (North-South, East-West and Golden Quadrilateral), economic corridors, inter-corridor roads, feeder roads, international connectivity, border roads, coastal roads, port connectivity roads and expressways. The scheme will include the existing NHDP programme as well.
HDFC Bank Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, Motilal Oswal Investment Advisors Limited, SBI Capital Markets Limited, Equirus Capital Private Limited are the BRLMs to the Offer.
G R Infraprojects The Company’s principal business of civil construction comprises EPC and BOT projects in the road sector. The Company has, since 2006, executed over 100 road construction projects. As per the red herring prospectus of the Company dated June 26, 2021 (the “RHP”), out of its BOT projects, it has one operational road project which has been constructed and developed on a BOT (annuity) basis and 14 road projects which have been awarded to the company under the HAM, out of which five projects are currently operational, four projects are under construction and construction is yet to commence on five of these projects.
The Company also has experience in constructing state and national highways, bridges, culverts, flyovers, airport runways, tunnels and rail over-bridges and has recently diversified into projects in the railway sector.