UdayShivakumar Infra IPO Weathers Weak Market to Storm into Oversubscribed Category

UdayShivakumar Infra IPO response and details

UdayShivakumar Infra Gets Oversubscribed

The latest company about to get listed on Indian bourses is UdayShivakumar Infra Limited. It is a road construction company based out of Karnataka. Despite weak global equity market sentiments, the IPO has been well-received.

The Investor Response

The IPO achieved 58% subscription on its first day of the offer. By noon of 21 March 2023, the IPO was fully subscribed. This was the second day of the three-day-long IPO. This is significant, considering that the broad market indicator Sensex has slipped by over 4.4% in the last two weeks. In the grey market, UdayShivakumar Infra shares were commanding a premium of Rs 10 consistently.

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IPO Details

  • Dates - The IPO opened on 20 March 2023 and will close on 23 March 2023. Allotment will be made on 28 March 2023, while refunds will be initiated on 29th. Allotted shares will reflect in Demat accounts on 31 March 2023. The share itself will get listed on the stock exchange on 3 April 2023. 
  • Price and Volume - The face value of the share is Rs 10, while the shares are offered within the price range of Rs 33 and Rs 35. The lot size is 428 shares. The total issue size is 2 crore fresh issues, amounting to an estimated Rs 66 crores.
  • Reservation – Retail investors will be allotted at least 60% of the issue. 30% of shares are earmarked for non-institutional investors including HNIs. Qualified institutional investors can invest in 10% of the total issue.
  • Company - Incorporated in 2019, UdayShivakumar Infra Limited has been engaged in the construction of national and state highways, district roads, municipal smart roads, PM Smart City roads etc. By August 2022, UdayShivakumar Infra Limited had executed over 30 projects and they are presently working on 25 new projects. 

The main objectives of the IPO are the funding of the incremental working capital requirements and general corporate purposes.

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Financials – As disclosed in its draft red herring prospectus, here are the financial results of UdayShivakumar Infra Limited in the last three financial years,

 financial results of UdayShivakumar Infra Limited

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The revenue and profit growth of the company shows an inconsistent pattern in the last three years. In FY22, the EBITDA margins of the company were 13.41% and profit after tax was 6.54%, which pales in comparison to other road construction competitors. Nevertheless, the promising grey market premium and the oversubscription indicate a positive sentiment among investors. 



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