IPO Details
Issue Date
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IPO Size
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Schedule of Varindera Constructions Ltd
Start date
End date
Allotment of bids
Refund Initiation
Listing on exchange
About Varindera Constructions Limited IPO
Varindera Constructions Limited is an IPO aggregating up to ₹1,200 crores. It consists of an offer for sale aggregating up to ₹300 crores and a fresh issue aggregating up to ₹900 crores. The shares will be allotted on TBA. The credit of shares to the demat account will take place on TBA and the initiation of refunds will take place on TBA.
Objective of Varindera Constructions Limited IPO
- Capital expenditure towards the purchase of equipment.
- Funding the working capital requirements of the company.
- Repayment/prepayment in full or in part, of certain outstanding borrowings availed by the company.
- General corporate purposes.
Varindera Constructions Limited IPO Valuation
| Detail | Information |
|---|---|
Upper Price Band (₹) | TBA |
Existing Shares to be Sold | Aggregating up to ₹300 crores |
Fresh Issue | Aggregating up to ₹900 crores |
EPS (₹) For the year ended March 31, 2024 | 9.25 |
Varindera Constructions Limited IPO Share offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs Share Offered | Not more than 50% of the Issue |
Non-Institutional Investors (NIIs) | Not less than 15% of the Issue |
Retail Individual Investors | Not less than 35% of the Issue |
Industry Outlook
The Indian construction industry is a pivotal sector contributing significantly to the nation's economic growth, accounting for 9.13% of total GVA as of fiscal 2024. It includes residential, commercial, industrial, and infrastructure projects, and has seen a steady rise at 5.25% CAGR from fiscal 2012 to 2024, driven by rapid urbanisation, government initiatives, and increased investments.
Over the long term, CRISIL MI&A projects the overall construction investments to rise by ~1.61 times between fiscals 2024-28 compared with those over fiscals 2019-23.
The share of infrastructure investments is expected to increase to 68-70% of the overall construction investments for the five years (fiscals 2024-28) as against 62.43% in the past five years (fiscal 2019-23), as infrastructure investments are expected to see faster growth than the other two segments (building construction and industrial) due to the government's focus on infrastructure under the National Infrastructure Pipeline (NIP), National Monetisation Pipeline (NMP) and the Gati Shakti initiative.
Between fiscal 2019 to fiscal 2023, building construction industry has seen an investment of ~₹12,45,000 crores, driven by rise in urbanisation, growth in employment, stabilisation of income of the organised workforce, preference of larger homes and government incentives for affordable housing. Of the overall investments, during the aforementioned period, investments in residential occupy the lion’s share of 87.55%, while the rest is occupied by commercial and social segment.
Company Information
Varindera Constructions Limited is an integrated engineering, procurement and construction (EPC) company with experience in construction of buildings projects including residential units, commercial complex, office, railway stations, hospitals, high court and library as well as undertaking infrastructure projects such as metro depot, aircraft hangar and roads. In the last 10 fiscal years (ended March 31, 2024), they have executed and delivered 31 construction projects with an aggregate contract value of ₹5,293.27 crores, across 11 states in India and overseas, in Mauritius. They undertook their first overseas project in 2018, in Mauritius, and have currently 7 ongoing projects in Mauritius and Maldives.
Varindera Constructions Ltd Strengths
One of the fastest growing construction companies with a proven track record of successful execution and focus on building construction.
They are one of the fastest growing construction companies in terms of revenue from operations, compared to all major listed construction companies (i.e. the companies with revenue from operations greater than ₹500 crores), between fiscal year 2019 to fiscal year 2024, with revenue from operations growth at a CAGR of 39.40 % during this period (Source: CRISIL Report).
Robust order book with central government/multilateral institutions funded projects.
During the last three fiscal years, their order book value was ₹3,844.79 crores as of March 31, 2024, ₹3,223.84 crores as of March 31, 2023, and ₹1,929.52 crores as of March 31, 2022. This continued momentum in order book value provides them financial as well as operational benefits, such as clarity regarding future revenue potential and work requirements.
Consistent financial performance and credit rating.
Their business growth has contributed significantly to their financial strength. Their integrated execution capabilities, project management efficiency and equipment ownership model have led to a significant year over year growth in their revenue and net profit and led to improvement in their other financial metrics as well including PAT margin and return on equity.
Risks of Varindera Constructions Limited IPO
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Their global business operations are subject to global and local risks related to economic, regulatory, social and political uncertainties, any of which could have a material adverse effect on their business, financial condition and results of operations.
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They are subject to risks arising from interest rate fluctuations, which could reduce the profitability of their projects and adversely affect their business, financial condition and results of operations.
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Political, economic or any other prevailing conditions in India that are beyond their control may hurt their business, results of operations, financial condition, and cash flows.
All Financial Information about Varindera Constructions
Particulars (in Rs. crores)
Particulars (in Rs. crores)
Comparison with peers
| Parameter | Varindera Constructions Limited | Ahluwalia Contracts (India) Limited | Capacite Infraprojects Limited |
|---|---|---|---|
P/E | - | 21.26 | 24.90 |
EPS (Basic) (₹) | 9.25 | 55.95 | 16.09 |
Return on Net Worth (%) | 33.02 | 26.51 | 9.29 |
NAV per share (₹) | 32.62 | 238.84 | 179.31 |
Anchor Investor Information
The Anchor Investors shall Bid during the Anchor Investor Bidding Date, i.e., one Working Day prior to the Bid/ Offer Opening Date.
IPO Registrar and Book Running Lead Managers
Book running lead managers:
ICICI Securities Limited Equirus Capital Private Limited IIFL Securities Limited
Registrar for the IPO is Link Intime India Private Limited
Business Model
The company earns its revenue through the following sources:
- Construction of building projects, including residential units, commercial complexes, offices, railway stations, hospitals, high courts, and libraries, including infrastructure projects such as metro depots, aircraft hangars, and roads.
Company Growth Trajectory
As a result of their integrated execution capabilities, project management efficiency and equipment ownership model, they have delivered a PAT Margin of 10.32%, 10.40% and 7.66%, as of fiscal year that ended as on March 31, 2024, March 31, 2023 and March 31, 2022, respectively.
Their total revenue from operations and net profit for the year grew at a CAGR of 18.19 % and 37.22%, respectively, between fiscal 2022 and fiscal 2024.
Company Market Position
According to the CRISIL Report, they are one of the fastest growing construction companies in terms of revenue from operations, compared to all major listed construction companies (i.e. companies with revenue from operations greater than ₹500 crores for the fiscal year 2024), between the fiscal year 2019 to the fiscal year 2024 with growth in revenue from operations at a CAGR of 39.40% during this period.
Varindera Constructions Limited Company Profit & Loss
| Parameter | FY22 | FY23 | FY24 |
|---|---|---|---|
Revenue from operations (₹ crores) | 994.329 | 1048.551 | 1388.928 |
Profit/loss Before Tax (₹ crores) | 100.658 | 136.731 | 188.345 |
Net profit / (loss) (₹ crores) | 76.147 | 109.014 | 143.382 |
EBITDA (₹ crores) | 119.162 | 164.546 | 239.760 |
EPS (₹) | 4.91 | 7.03 | 9.25 |
Varindera Constructions Limited Cash Flow
| Parameter | FY22 | FY23 | FY24 |
|---|---|---|---|
Profit/(loss) before tax (₹crores) | 100.658 | 136.731 | 188.345 |
Net Cash from Operating Activities (₹ crores) | (52.024) | 53.913 | 41.668 |
Net Cash from Investing Activities (₹ crores) | (25.779) | (98.937) | (100.604) |
Net Cash from Financing Activities (₹ crores) | 46.881 | 69.287 | 77.845 |
Cash and Cash Equivalents (₹ crores) | 8.821 | 33.084 | 51.993 |
How To Check Allotment Status of Varindera Constructions Limited IPO?
You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar Link Intime India Private Limited. To check the status on the BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt (Equity in this case)
- Select the Issue Name from the drop-down. The issue name is the company’s name, which is Varindera Constructions Limited
- Enter your application number or PAN number
- Check the box which says “I’m not a Robot” and click on “Search” to know the allotment status
Follow these steps to know the allotment status on the registrar’s website:
- Visit the Link Intime India Private Limited website
- Choose “Public Issues” from the “Investor Services” drop-down
- Select Varindera Constructions Limited from the drop-down
- Enter your PAN number or Application number
- Click on “Submit” to know the allotment status
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
Varindera Constructions Ltd IPO FAQs
What is the Varindera Constructions Limited IPO?
The Varindera Constructions Limited IPO has an issue size aggregating up to ₹1,200 crores. The IPO opens for subscription on TBA and closes on TBA.
Who is the Registrar for Varindera Constructions Limited IPO?
Link Intime India Private Limited is the registrar for this IPO.
