Varindera Constructions, based in Haryana, has filed a draft red herring prospectus with the capital markets regulator SEBI, with the intention of raising Rs 1,200 crore through an IPO.
Prior to the IPO launch, the engineering, procurement, and construction (EPC) company may also raise up to Rs 180 crore through pre-IPO placement. The aforementioned sum will be subtracted from the new issue if it is successful in raising funds for the pre-IPO placement.
IPO structure
The IPO consists of an offer by current shareholders to sell shares valued at Rs 300 crore and a fresh issue of shares valued at Rs 900 crore, according to the draft papers filed on September 30.
Use of IPO proceeds
Out of the net fresh issue proceeds (IPO size less public issue expenses), the Varinder Garg-owned company will use Rs 160.1 crore for equipment purchases and Rs 155 crore for working capital needs. Moreover, debt repayment will take up Rs 359.9 crore, with the remaining money going towards general corporate needs.
Following the problem, the company's debt load appears to be drastically declining. As of July 2024, the total amount of outstanding debt was Rs 442.34 crore.
In pipeline and completed projects
Over the past ten years, Varindera Constructions has completed 31 construction projects in 11 Indian states as well as Mauritius, totalling a contract value of Rs 5,293.3 crore. It is currently working on seven projects in the Maldives and Mauritius. In FY24, overseas business accounted for almost 24 per cent of total revenue.
It had 20 active projects in India and abroad as of March 2024, and its order book was worth Rs 3,844.8 crore, including Rs 607.1 crore for projects abroad.
Company financials
Comparing the fiscal year 2024 to the previous one, revenue from operations climbed by 32.5 per cent to Rs 1,389 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 50.5 per cent to Rs 224.7 crore in FY24, while the margin increased by 200 basis points to 16.2 per cent from FY2023.
