Construction IPOs in India offer investors a chance to invest in companies involved in large-scale infrastructure development, real estate and civil engineering. With rapid urbanization, government spending on infrastructure and demand for residential projects, these IPOs provide long-term growth opportunities.
Content:
- Overview of the Construction IPOs in India
- IPO Fundamental Analysis
- IPO Financial Analysis
- About the Company
- Advantages of Investing in Construction Sector IPOs
- Disadvantages of Investing in Construction Sector IPOs
- Role of the Construction Industry in the Economy
- How to invest in Construction IPOs?
- FutureOutlookk of Construction IPOs in India
- Construction IPOs in India – FAQ
Overview of the Construction IPOs in India
The construction sector in India benefits from increasing government investments in infrastructure, urban housing projects and smart cities. Companies in this sector are well-positioned to grow as demand for residential, commercial and industrial properties continues to rise, backed by public and private funding.
With projects spanning roads, bridges, residential buildings and industrial facilities, construction companies play a crucial role in India’s development. IPOs in this sector provide investors access to a booming industry with opportunities linked to the country’s growing infrastructure and urbanization needs.
IPO Fundamental Analysis
Atmastco Ltd
Atmastco Ltd showed a positive financial trajectory in FY24, with increased sales, rising profits and improved equity capital. The company experienced stable performance with marginal improvements in profitability metrics, despite facing challenges in managing its growing liabilities. Its financial position remains resilient.
Revenue Trend: Atmastco Ltd saw a steady increase in sales, rising from ₹93.61 Crores in FY22 to ₹241.95 Crores in FY23 and ₹224.01 Crores in FY24. Although sales slightly declined in FY24, the company’s revenue levels still reflect overall growth compared to FY22.
Equity and Liabilities: Equity capital increased from ₹14.81 Crores in FY23 and FY22 to ₹24.73 Crores in FY24, showing a positive trend. However, total liabilities rose to ₹291.19 Crores in FY24 from ₹236.18 Crores in FY23, indicating increased debt despite higher equity capital.
Profitability: Net profit increased from ₹3.23 Crores in FY22 to ₹12.78 Crores in FY23 and ₹16.71 Crores in FY24. This growth reflects better operational efficiency, with the company successfully expanding its profit margin despite a slight dip in sales.
Earnings per Share (EPS): EPS improved marginally to ₹6.75 in FY24 compared to ₹6.64 in FY23 and ₹1.68 in FY22. The improvement in EPS shows the company’s ability to generate higher earnings for shareholders despite challenges faced in the fiscal year.
Return on Net Worth (RoNW): RoNW decreased to 15.42% in FY24 from 23.14% in FY23, indicating a slight decline in return efficiency. However, it remains healthy compared to previous years, demonstrating continued profitability despite the increase in liabilities.
Financial Position: Net profit increased to ₹16.71 Crores in FY24 from ₹12.78 Crores in FY23 and ₹3.23 Crores in FY22. Despite rising liabilities, the company’s net profit and financial position indicate strong resilience and consistent performance.
Rachana Infrastructure Ltd.
Rachana Infrastructure Ltd showed positive growth in FY24 with increasing sales, profitability and improved EPS. While total liabilities rose, the company managed its capital efficiently, reflecting steady growth in its operational performance and financial health. The increase in equity capital indicates the company’s expanding presence in the market.
Revenue Trend: Rachana Infrastructure Ltd’s net sales grew from ₹63.2 Crores in FY22 to ₹63.52 Crores in FY23, then surged to ₹91.48 Crores in FY24. The consistent growth in sales reflects the company’s improved operational efficiency and demand for infrastructure services.
Equity and Liabilities: Share capital remained stable at ₹18.61 Crores across FY23 and FY24, up from ₹15.78 Crores in FY22. Total liabilities increased to ₹124.57 Crores in FY24, up from ₹113.29 Crores in FY23, showing moderate expansion in debt to finance growth.
Profitability: Net profit increased from ₹2.21 Crores in FY22 to ₹2.26 Crores in FY23, further improving to ₹3.63 Crores in FY24. This growth indicates better cost control, with the company’s focus on improving its margins and achieving profitability.
Earnings per Share (EPS): EPS improved to ₹1.95 in FY24, up from ₹1.22 in FY23 and ₹1.4 in FY22. The increase in EPS shows improved financial performance, enabling the company to generate higher returns for its shareholders despite rising liabilities.
Return on Net Worth (RoNW): RoNW improved to 6.79% in FY24 from 5.76% in FY23, but lower than 9.52% in FY22. This decline indicates a reduction in the efficiency of equity utilization, despite positive growth in net profit and EPS.
Financial Position: Current assets increased to ₹79.64 Crores in FY24, compared to ₹67.54 Crores in FY23 and ₹55.73 Crores in FY22, reflecting improved liquidity. Total assets rose to ₹124.57 Crores in FY24, indicating stable growth in the company’s financial position.
Teerth Gopicon Ltd
Teerth Gopicon Ltd showed remarkable growth in FY24 with significant increases in both sales and profitability. The company experienced impressive improvements in its equity capital and returns on net worth (RoNW), reflecting enhanced operational performance and a strong financial position.
Revenue Trend: Teerth Gopicon Ltd witnessed strong sales growth, with net sales rising from ₹31.17 Crores in FY22 to ₹39.08 Crores in FY23 and reaching ₹104.92 Crores in FY24. The robust revenue growth indicates substantial operational and market demand improvements.
Equity and Liabilities: Share capital increased from ₹5 Crores in FY22 and FY23 to ₹8 Crores in FY24, demonstrating a positive trend in equity base expansion. The company’s liabilities management remained stable, reflecting a balanced approach to financing its growth and operations.
Profitability: Net profit saw a significant increase from ₹0.15 Crores in FY22 to ₹1.7 Crores in FY23 and ₹11.56 Crores in FY24. This growth in profitability highlights improved efficiency and stronger market performance, contributing to overall business expansion and cost management.
Earnings per Share (EPS): EPS surged from ₹0.19 in FY22 to ₹2.13 in FY23 and further to ₹14.45 in FY24. This sharp increase in EPS reflects the company’s ability to generate greater value for shareholders and improve operational efficiency, resulting in better financial returns.
Return on Net Worth (RoNW): RoNW showed an impressive improvement, rising from 2.50% in FY22 to 22.72% in FY23 and reaching 59.95% in FY24. This dramatic increase indicates enhanced profitability and effective utilization of equity, signifying strong financial performance and business growth.
Financial Position: Current assets grew significantly to ₹120.28 Crores in FY24, compared to ₹43.6 Crores in FY23 and ₹39.74 Crores in FY22. Total assets also increased substantially to ₹136.23 Crores in FY24, reflecting a healthy balance sheet and strong financial management.
IPO Financial Analysis
Atmastco Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Net Sales | 224.01 | 241.95 | 93.61 |
| Total Expenditure | 184.98 | 210.86 | 79.62 |
| Operating Profit | 39.03 | 31.09 | 13.99 |
| Other Income | 1.08 | 0.84 | 1.07 |
| Interest | 12.5 | 9.89 | 7.84 |
| Depreciation | 4.46 | 3.83 | 2.59 |
| Exceptional Items | 0 | 0 | 0 |
| Profit Before Tax | 23.14 | 18.21 | 4.63 |
| Tax | 6.44 | 5.43 | 1.4 |
| Net Profit | 16.71 | 12.78 | 3.23 |
| Adjusted EPS (Rs.) | 6.75 | 6.64 | 1.68 |
All values in ₹ Cr.
Rachana Infrastructure Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Net Sales | 91.48 | 63.52 | 63.2 |
| Total Expenditure | 84.38 | 57.49 | 57.14 |
| Operating Profit | 7.1 | 6.02 | 6.06 |
| Other Income | 2.49 | 1.71 | 2.86 |
| Interest | 2.59 | 2.83 | 3.94 |
| Depreciation | 2.46 | 1.86 | 2.05 |
| Exceptional Items | 0 | 0 | 0 |
| Profit Before Tax | 4.54 | 3.04 | 2.93 |
| Tax | 0.91 | 0.78 | 0.72 |
| Net Profit | 3.63 | 2.26 | 2.21 |
| Adjusted EPS (Rs.) | 1.95 | 1.22 | 1.4 |
All values in ₹ Cr.
Teerth Gopicon Ltd
| Mar 2024 | Mar 2023 | Mar 2022 | |
| Net Sales | 104.92 | 39.08 | 31.17 |
| Total Expenditure | 86.81 | 36.08 | 30.45 |
| Operating Profit | 18.11 | 3 | 0.72 |
| Other Income | 0.18 | 0.07 | 0.06 |
| Interest | 0.97 | 0.23 | 0.03 |
| Depreciation | 1.27 | 0.45 | 0.42 |
| Exceptional Items | 0 | 0 | 0 |
| Profit Before Tax | 16.05 | 2.39 | 0.33 |
| Tax | 4.49 | 0.69 | 0.18 |
| Net Profit | 11.56 | 1.7 | 0.15 |
| Adjusted EPS (Rs.) | 14.45 | 2.13 | 0.19 |
All values in ₹ Cr.
About the Company
Atmastco Ltd
Atmastco Ltd is a leading construction and infrastructure development company focused on providing innovative solutions in civil engineering, residential and commercial projects. The company’s expertise lies in timely project delivery, quality construction and sustainable practices that cater to the growing demands of urban infrastructure.
The company’s diversified portfolio includes residential complexes, commercial spaces and industrial infrastructure. With a strong market presence, Atmastco Ltd is well-positioned to capitalize on the increasing demand for infrastructure development in India. Their focus on quality, reliability and cost efficiency helps maintain a competitive edge in the construction industry.
Rachana Infrastructure Ltd
Rachana Infrastructure Ltd is a prominent player in India’s construction sector, specializing in large-scale infrastructure projects like highways, bridges and residential buildings. Known for its commitment to quality, the company has established a strong track record of completing projects within deadlines and budget.
Rachana Infrastructure focuses on both public and private sector projects and has built a solid reputation for reliability and project execution. With the increasing demand for urban infrastructure and government projects, the company is poised for growth, offering potential investment opportunities in the Indian construction market.
Teerth Gopicon Ltd
Teerth Gopicon Ltd is a key player in the Indian construction industry, specializing in residential, commercial and industrial construction. The company has earned a reputation for its ability to deliver high-quality projects within timeframes and at competitive prices, ensuring client satisfaction.
The company’s diverse portfolio includes projects ranging from high-end residential complexes to large-scale commercial developments. Teerth Gopicon is well-positioned to capitalize on the growing demand for infrastructure development in India, particularly with the government’s push for urbanization and affordable housing in the coming years.
Advantages of Investing in Construction Sector IPOs
The main advantages of investing in Construction sector IPOs include strong growth potential driven by infrastructure demand, government initiatives, long-term returns and industry resilience. These factors make the sector an attractive option for investors seeking stable, long-term opportunities.
- Infrastructure Demand: Rapid urbanization and government initiatives like smart cities create sustained demand for construction projects, benefiting companies in the sector.
- Government Support: Programs like PMAY, Make in India and increased infrastructure spending create a favourable environment for construction companies to thrive.
- Long-Term Investment: The construction sector offers long-term growth as infrastructure development projects span several years, providing steady cash flow and returns.
- Industry Resilience: Despite economic downturns, the demand for basic infrastructure like roads, bridges and housing remains steady, providing some stability in the sector.
Disadvantages of Investing in Construction Sector IPOs
The main disadvantages of investing in Construction sector IPOs include market volatility, regulatory risks, capital-intensive operations and dependency on government projects. These factors should be considered carefully before committing to investments in this sector.
- Market Volatility: The construction industry is susceptible to market fluctuations and economic slowdowns can delay projects, affecting company earnings and stock performance.
- Regulatory Risks: Construction companies face frequent regulatory changes, land acquisition issues and delays in approvals, which can impact project timelines and profitability.
- Capital-Intensive: Construction projects often require significant upfront capital investment, leading to potential liquidity risks for companies and delays in returns.
- Dependency on Government Projects: Many construction companies rely heavily on government contracts, making them vulnerable to political changes, budget constraints, or policy shifts.
Role of the Construction Industry in the Economy
The construction industry is a major driver of economic growth, contributing significantly to GDP, employment and infrastructure development. It supports the creation of essential infrastructure, including roads, bridges, residential and commercial buildings and industrial facilities, enabling other industries to thrive.
In addition to its direct economic contributions, the construction sector fosters job creation across various skill levels, from labourers to engineers. It supports allied industries like cement, steel and real estate, creating a multiplier effect that benefits the entire economy.
How to invest in Construction IPOs?
- Research the Sector: Understand the construction company’s market position, growth prospects and past performance before making an investment decision.
- Review IPO Prospectus: Thoroughly analyze the prospectus for details about the company’s financial health, project portfolio and risk factors.
- Open a Demat Account: Ensure you have an active Demat account with a reliable broker like Alice Blue to apply for the IPO.
- Apply Through ASBA/UPI: Use the ASBA facility or UPI via a trading platform for submitting your IPO application.
- Track Allotment Status: Monitor the allotment status post-subscription and plan your strategy based on the IPO’s listing performance.
FutureOutlookk of Construction IPOs in India
The future outlook for Construction IPOs in India is positive, driven by increased government spending on infrastructure, urbanization and demand for affordable housing. Infrastructure projects like roads, airports and industrial zones will continue to provide significant growth opportunities for construction companies.
As India focuses on creating smart cities and improving transportation networks, the demand for construction services will rise. This presents long-term opportunities for investors in IPOs of companies that are well-positioned to capitalize on these trends and participate in the country’s growth story.
Construction IPOs in India – FAQ
A Construction IPO is an initial public offering where construction companies issue shares to raise capital for expansion, debt reduction, or project funding, giving investors ownership in the company.
Major construction companies in India that have launched IPOs include L&T, Shapoorji Pallonji and Ircon International, each raising capital for various infrastructure projects and expansion.
Construction IPOs provide access to infrastructure growth, stimulate economic development and offer investors a chance to benefit from the growing demand for urbanization, housing and industrial projects.
The largest construction IPO in India was the L&T Infotech IPO in 2016, raising over ₹1,000 crores. This was a major milestone for the infrastructure and engineering sector.
To invest in construction IPOs, open a Demat account, complete KYC, apply via online platforms like Alice Blue, choose IPOs and monitor allotment status after application submission.
Yes, construction IPOs can be suitable for long-term investment, especially if the company demonstrates strong growth potential, consistent profitability and a solid project pipeline in the growing infrastructure sector.
Construction IPOs can be profitable, but returns depend on company performance, sector trends and market conditions. Conduct thorough research before investing to ensure profitability and minimize risks.
Yes, several construction companies are planning IPOs, including those in infrastructure development, real estate and public sector projects. Stay updated through financial news and stock exchange notifications for details.
Detailed reviews and analyses of Construction IPOs can be found on financial websites, stock brokerage platforms like Alice Blue and through IPO rating agencies and market research reports.
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Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
