- Date 23rd Feb
- IPO Opens 26-28th Feb with price range Rs. 263-270
- Small Cap: Rs. 1,760 cr. Mkt cap
- Industry – Roads Construction
- Valuations: P/E 32.9 times TTM, P/B 3.7 times (Post IPO)
- Advice: SUBSCRIBE
SUMMARY of IPO
- Overview: HGI is a Jaipur based infrastructure construction, development and management firm with a focus on road projects, including highways, bridges and flyovers.
- Revenues and profit for FY17 were Rs. 1,059 cr. and Rs. 53 cr. HGI’s revenues, EBITDA and PAT grew at 34.3%, 27.5% and 37.0% CAGR in 5 years.
- HGI has a good 5 years performance where it has emerged as a rising star. The healthy order book, roster of completed roads projects and fair financial controls are impressive.
- At a P/E of 32.9 times (adjusted post IPO), the valuations of the IPO appear to be high. However earnings growth is likely to be at a faster pace due to reduced interest costs, better efficiencies and sectoral traction. Good track record, robust financial performance, sectoral tailwinds and an experienced management team makes this IPO attractive.
- Key Risks: 1) Project execution delays 2) Labor unavailability 3) Intense competition.
- Opinion: Investors can SUBSCRIBE to this IPO with a 3 year perspective.
Investors may read the rest of this report on www.jainmatrix.com
Punit Jain, founder JainMatrix Investments