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Industry : Capital Goods

Udayshivakumar Infra Limited View all IPOs

Price Band

Rs. 33– Rs. 35

UDAYSHIVKUMAR INFRA LIMITED is going public with a Fresh issue . The issue opens on 20th March 2023.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

One State Alone Accounts For All Revenues

The majority of the company's revenue comes from the state of Karnataka, and within that, primarily from local governments. The change in leadership or in state policy could have a significant impact on the company's income. Yet, the company is relatively small, with March 2022 sales of Rs 186 crore. However, the promoter provided the company a loan of up to Rs 58 crores. This loan was repaid by the end of the year, but it does suggest that the company may have working capital concerns. The promoter has also provided a loan to the company in the past.

A Microcap Company Will Not Attract the Interest Of Institutional Investors

Based on the higher price band, Udayshivakumar Infra will have a market capitalization of Rs 186 crore. This market capitalization is insufficient to excite institutional investors. Thus, institutional investors would not be interested.

Poor Market Sentiments

The current market sentiment is extremely negative. At this period, only companies with a distinctive business plan or reputable promoters can help create wealth. Unfortunately, Udayshivakumar Infra lacks a unique business model, and the investing community is unfamiliar with the company's promoters. This increases the likelihood that the company will not do well after its listing.

Issue Details

Issue Opens	20th March 2023
Issue Closes	23rd March 2023
Price Band	Rs. 33– Rs. 35
Issue size (Upper Band)	Rs. 66 Cr
Issue Type	FRESH ISSUE
Market cap (based on upper band)	186 Cr
Sales- March 2022 (Rs./Crs)	186 Cr
Net Profit - March 2022 (Rs./Crs)	12 Cr
Industry	Capital Goods
Promoters	Uday Shivakumar
Lead Manager	Saffron Capital Advisors

Objective of the Issue

Details

The Objectives of the Offer are to:

1. Funding the company's increased working capital requirements, amounting to Rs. 45 Crores.

2. General corporate purposes.

List of Existing Shareholders

Name	Type	Number of Equity Shares	% of Equity Share Capital
Udayshivakumar	Promoter	36127000	99%
Amrutha	Promoter Group	365000	1%

Business Operations

About Company

Udayshivkumar Infra is in the road construction business, which includes National Highways, State Highways, District Roads, Smart Roads (IOT-based roads with sensors, cameras, radar, and 5G equipped technology), and so on.

The company's primary projects include Smart Roads under PM’s Smart City Mission projects, Smart Roads under Municipal Corporations, Bruhat Bengaluru Mahanagar Palike (BBMP), and Local Area Roads in various Taluka Areas in Karnataka.

The company bids on Highways, Bridges, Irrigation & Canals, and Industrial Area Construction throughout Karnataka, including Government Departments.

Since Fiscal 2015, the company has executed 30 projects totaling Rs. 685 crores.

As of December 31, 2022, the company was working on 30 current projects with a total order book value of Rs. 854 Crores.

In the future, the company plans to form joint ventures with other infrastructure companies in the industry to bid on and execute larger projects.

Revenue from Operations:
	HY FY23	FY 22	FY 21	FY 20
Receipts from Sale of products	23%	10%	5%	8%
Sale of Services	2%	3%	5%	5%
Toll Receipts	7%	-	-	-
Revenue from Contracts with customers	68%	87%	90%	87%

Financials

Financial Overview

In H1 FY23, the company reported a revenue of Rs. 107 crore and a net profit of Rs. 10 crore.

In FY22, the company reported a revenue of Rs. 186 crore, compared to Rs. 210 crore in FY21.

The company reported net profit of Rs 12 crore in FY22, compared to Rs 9 crore in FY21, a growth of 33 per cent.

In FY22, the company reported a RoNW of 17.78%, up from 16.59% in FY21.

Financial Performance (Rs/crore)

Rs./Crs	H1 FY23	FY 22	FY 21	FY 20
Sales	107	186	210	194
Net Profit	10	12	9	10