GR Infraprojects makes outstanding debut; trades at 106.5% premium

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Udaipur-based infrastructure developer GR Infraprojects are in focus in today’s trade. As the counter got listed at Rs 1,715.85 on the National Stock Exchange, compared to the issue price of Rs 837, marking a premium of 105%. In noon trades (1:00 pm)  as well, the shares continued to trade higher and were quoting at Rs 1,728.50 (up 106.5%) and made an intraday high of Rs 1,777 apiece on the BSE.

Listing strategy

Most brokerages had a subscribe rating on the IPO and ahead of the listing, the shares were quoting at around 70% premium. Investors who got allotments have already doubled their money so what should be the strategy now. Here is what brokerages have to say.

“At the current price, the implied valuations for the EPC (Engineering Procurement & Construction) business are fair and hence we recommend short-term investors to book profits in the stock. Long term investors may book partial profits and hold the balance in their portfolios as it provides exposure to an EPC company with strong fundamentals,” said Milan Desai of Angel Broking.

Whereas Saurabh Joshi of Marwadi Shares and Finance is of the opinion that investors should continue holding this stock from a medium-term perspective as a company is a focused EPC player with a road project focus and has an established track record of timely execution. The company has a strong order book of Rs 19,025.8 cr as of Mar 31, 2021, comprising 16 road EPC projects, 10 HAM projects and three other projects and valuations are still in favour of investors.

About GR Infraprojects

GR Infraprojects is an integrated road engineering, procurement, and construction company with experience in designing and construction activities and road/highway projects. Till April 2021, it has completed 100+ road construction projects successfully, and currently, four BOT projects are under construction.

On the financial front, the company reported total revenue of Rs 7,906.94 crore in FY21 compared to Rs 5,325.53 crore in FY19. Whereas its profit after tax grew to Rs 953.22 crore versus Rs 716.63 crore during the same period.

(Disclaimer: The recommendations in this story are by the respective research and brokerage firm. Money9 & its management do not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)