Udayshivakumar Infra IPO Sees 45% Subscription On Day 1
The initial public offering (IPO) of road construction firm Udayshivakumar Infra got subscribed 45 per cent on Monday, its first day of bidding, despite the larger turmoil in the equity market stoked by the crisis in the banking sector.
Retail investors bought 36 per cent of the portion set aside for them, while non-institutional investors bought 45 per cent of their assigned quota.
Qualified institutional investors bid for 97 per cent of the shares allotted to them.
The construction firm plans to raise Rs 66 crore via public issue at the higher end of the price band at Rs 33-35 per share.
The proceeds from the offer will be utilised for incremental working capital requirements and general corporate purposes.
Udayshivakumar Infra is engaged in constructing roads, bridges, and flyovers in the state of Karnataka.
“The company has a strong order book and great execution capabilities with industry experience. Over the last three years, the company has reported a mixed set of financial results. The company is operating in a limited geographic location where it is dependent on a limited number of clients, especially government projects, which could be a risk,” says Anubhuti Mishra, Equity Research Analyst, Swastika Investmart.
Analysts noted that projects are exposed to various implementations and other risks, such as time and cost overruns and uncertainties.
The firm, though, has a strong order book of roads, bridges, flyovers and irrigation projects from the Karnataka state government.
