K2 Infragen Limited IPO Review & Fundamental Analysis

K2 Infragen Limited IPO

K2 Infragen Limited is coming up with an IPO worth INR 40.54 crores, consisting of a fresh issue of 34.06 lakh shares. The company plans to use the funds raised to meet the working capital requirements, capital expenditure, and general corporate purposes.

K2 Infragen IPO – Important Dates

K2 Infragen IPO DateMarch 28, 2024 to April 3, 2024
K2 Infragen IPO Listing DateApril 8, 2024
K2 Infragen IPO PriceINR 111 to 119 per share
K2 Infragen IPO Lot Size1200 Shares
K2 Infragen IPO Total Issue SizeINR 40.54 crores
K2 Infragen IPO Basis of AllotmentApril 4, 2024
K2 Infragen IPO Initiation of RefundsApril 5, 2024
K2 Infragen IPO Credit of Shares to DematApril 5, 2024
K2 Infragen IPO Issue TypeBook Built Issue IPO
K2 Infragen IPO Listing AtNSE SME

K2 Infragen Ltd IPO  – Company Profile

K2 Infragen Limited is an integrated engineering, procurement, and construction (“EPC”) focusing on Power Engineering and Project Engineering having experience in the design and construction of various projects across 8 States in India viz. Uttar Pradesh, Rajasthan, Madhya Pradesh, Karnataka, Haryana, Gujarat, Punjab & Delhi. 

The company provides services across the value chain, ranging from design, procurement, construction supervision, subcontract management, and work order management to post-construction activities to the clients. The company is certified for ISO 14001:2015 (Environment Management System), 45001:2018 (Occupational Health & Safety Management System), and 9001:2015 (Quality Management System) by Globus Certifications Private Limited. 

As of 29th February 2024, the company’s order book value is INR 0.39 crores.

K2 Infragen IPO Review

ParticularAs of 31 March 2022As of 31 March 2023As of 30 September 2023
Revenue (₹ in lakhs)3,685.207,490.085,967.98
Equity (₹ in lakhs)133.841,392.452,535.32
Expenses (₹ in lakhs)3,987.835,966.115,139.66
Profit and Loss After Tax (₹ in lakhs)(306.88)1,131.15604.58
Diluted EPS only (₹)(6.04)15.406.83
Return on Net Worth (%)(253.7)81.423.9
NAV per Equity Share (₹)6.0462.1727.60
Total Assets (in lakhs)2,591.145,690.406,378.79
Total Liabilities (in lakhs) 2,457.304,297.953,843.47
Debt Equity Ratio (in times) 15.401.710.87
Current Ratio (in times) 1.051.111.48
Inventory Turnover Ratio (in times) 7.957.25NA

K2 Infragen Ltd IPO Fundamental Analysis

The financial analysis of the company preparing for an IPO reveals a complex trajectory. While there are positive indicators like significant revenue growth and improved profitability, concerns arise from fluctuating earnings per share (EPS) and return on net worth (RoNW) trends. Further evaluation of market conditions and growth prospects is essential before considering investment in the IPO.

  • 1. Revenue Trend: The company has shown a significant increase in revenue from ₹3,685.20 lakhs in March 2022 to ₹7,490.08 lakhs in March 2023, but it dropped to ₹5,967.98 lakhs by September 2023. The fluctuating revenue trend raises concerns about the company’s sales stability.
  • 2. Equity and Liabilities: The equity has increased substantially, indicating potential growth and investor confidence. However, total liabilities have also increased, albeit at a slower pace, resulting in a decreasing debt-equity ratio, which is a positive sign for financial health.
  • 3. Profitability: The company’s profitability has shown improvement, with a significant turnaround from a loss of ₹306.88 lakhs in March 2022 to a profit of ₹1,131.15 lakhs in March 2023, but it decreased to ₹604.58 lakhs by September 2023. This indicates varying levels of profitability and may require further analysis of cost management.
  • 4. Earnings per Share (EPS): The diluted EPS has also improved over time, starting at a negative value of ₹6.04 in March 2022, increasing to ₹15.40 in March 2023, but decreasing to ₹6.83 by September 2023. A decreasing EPS trend could impact investor sentiment.
  • 5. Return on Net Worth (RoNW): The RoNW has shown a similar fluctuation pattern, starting at a negative value in March 2022, increasing significantly to 81.4% in March 2023, but decreasing to 23.9% by September 2023. This suggests a decline in profitability relative to net worth after an initial improvement.
  • 6. Financial Position: The NAV per equity share has increased over time, indicating a stronger underlying asset value per share. The current ratio has also improved, reflecting better liquidity and ability to meet short-term obligations.

K2 Infragen Limited IPO Peer Comparison

K2 Infragen has a high revenue with good EPS and RoNW but lacks PE ratio data. Markolines have a moderate PE ratio with lower EPS and RoNW. W S Industries shows lower revenue and EPS but a decent RoNW. Udayshivakumar Infra and Advait Infratech exhibit similar revenue with varying PE ratios, EPS, and RoNW.

CompanyTotal Revenue (₹ in lakhs)Face Value (₹)PE Ratio (in times)Basic EPS  (₹)Diluted EPS  (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
K2 Infragen Limited7,479.0810NA18.0415.4081.3262.04
Markolines Pavement Technologies Ltd31,180.001012.688.248.2418.3544.91
W S Industries (India) Ltd7,967.25108.164.453.9930.2415.54
Udayshivakumar Infra Ltd28,689.8110NA4.374.3711.1125.52
Advait Infratech Ltd28,689.811017.9115.5915.5919.6050.01

K2 Infragen IPO Objective

The main objectives of K2 Infragen’s IPO is to utilize INR 16 crores for working capital needs, invest Rs. 8.31 crores in manufacturing expansion, and deploy remaining funds for general corporate purposes like strategic initiatives, branding, and acquisitions.

  1. To meet the working capital requirement: To support the incremental business requirements, the company requires additional working capital to fund its incremental working capital requirements in the Financial Year 2024. The company proposes to utilize INR 16 crores for the said purpose.
  1. To meet capital expenditure: To expand the manufacturing capabilities to support existing and/or new customers, the company intends to make capital expenditure towards the installation of additional machinery. The company proposes to use part of the net proceeds to the extent of Rs. 8.31 crores to meet capital expenditure.
  1. General Corporate Purpose: The Company plans to deploy the balance funds towards the general corporate goals, including but not restricted to strategic initiatives, partnerships, joint ventures and strategic entity/business acquisitions, branding, marketing, and new client referral fees meeting exigencies.

K2 Infragen Ltd IPO Risks And Challenges

The company’s risks include heavy dependence on Uttar Pradesh for revenue, supplier dependency on a few large suppliers, and uncertainty in project acceptance due to competitive bidding processes.

  1. Almost 97% of the revenue is generated from the state of Uttar Pradesh. Any adverse impact in this region may adversely affect the business, results of operations, and financial condition.
  1. The company is dependent on a few suppliers for the purchase of products. The loss of any of these large suppliers may affect the business operations.
  1. All projects that the company operates have been awarded primarily through a competitive bidding process. The company’s bids may not always be accepted. 

K2 Infragen Limited IPO – Industry & Market Potential

India’s high growth imperative in 2023 and beyond will significantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress. Infrastructure is a key enabler in helping India become a US $26 trillion economy. 

Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increasing efficiency and costs. Prime Minister Mr. Narendra Modi also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors. 

The “Smart Cities Mission” and “Housing for All” programs have benefited from these initiatives. Saudi Arabia seeks to spend up to US$ 100 billion in India in energy, petrochemicals, refinery, infrastructure, agriculture, minerals, and mining. 

K2 Infragen IPO – Type of Offer

K2 Infragen Limited intends to launch an IPO valued at INR 40.54 crores, comprising a fresh issue of 34.06 lakh shares. The company aims to utilize the raised funds for fulfilling working capital needs, capital expenditure, and general corporate objectives.

K2 Infragen Ltd IPO Offer Size

The issue size of Infragen Limited’s IPO is INR 40.54 crores, which includes a fresh issue of 34.06 lakh shares. The company plans to allocate these funds towards meeting working capital requirements, capital expenditure, and general corporate purposes.

K2 Infragen IPO Allotment Structure

K2 Infragen’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. A portion of the offer is reserved for market makers.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

 ● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

Market Makers Reservations: A portion of the issue, i.e., 2,49,600 shares is reserved for market makers.

How to apply for a K2 Infragen Limited IPO?

To apply for the K2 Infragen IPO through Alice Blue, you would typically follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

  1. Check for IPO Details: Once your account is active, you can check for the K2 Infragen IPO details in the IPO section of the Alice Blue platform.
  2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
  3. Submit the Application: Confirm all your details and submit your application.

You can apply for the K2 Infragen IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How do you check K2 Infragen’s IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

  1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
  2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
  3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
  4. Select the K2 Infragen IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the K2 Infragen IPO.
  5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, it’s recommended that you contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the K2 Infragen IPO:

 ● Registrar’s Website: Visit the website of Kfin Technologies Limited, the registrar of the K2 Infragen IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

●  NSE SME: You can also check the allotment status on the official websites of the National Stock Exchange (BSE) SME (Small Medium Enterprise) Platform. You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

K2 Infragen  Ltd IPO Offer Registrar

The registrar for the K2 Infragen Limited IPO is Kfin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

Kfin Technologies Limited

Selenium Tower-B, Plot 31 & 32, Gachibowli, 

Financial District, Nanakramguda,

Hyderabad – 500 032, Telangana,

Email: [email protected]

Website: www.kfintech.com 

K2 Infragen Limited IPO –  FAQs 

1. What is the allotment date of K2 Infragen Limited? 

The allotment date of the K2 Infragen Limited IPO is April 4, 2024.

2. What is the price band of the K2 Infragen IPO? 

The price band of the issue is INR 111- 119 per share.

3. What is the size of the K2 Infragen IPO? 

The issue size is INR 40.54 crores for K2 Infragen Limited’s IPO, involving a fresh issue of 34.06 lakh shares. The company plans to allocate these funds towards meeting working capital requirements, capital expenditure, and general corporate purposes.

4. What is the listing date of the K2 Infragen IPO? 

The listing date of K2 Infragen’s IPO is April 8, 2024.

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