Teerth Gopicon Limited IPO: Detailed Analysis

Teerth Gopicon Limited, an engineering construction and development company, is set to launch its SME IPO. This offers an opportunity for investors to explore investments in road construction, sewerage, and water distribution projects in Madhya Pradesh.

IPO Key Details

IPO Dates: April 8, 2024, to April 11, 2024.

Price Band: ₹111 per share.

Lot Size: The minimum order quantity is 1200 shares, totaling ₹133,200 for retail investors.

Offer Details: A fresh issue of 4,000,000 equity shares, aggregating to ₹44.40 Crores, without any offer-for-sale component.

Listing: Proposed on the NSE SME platform, tentatively set for April 16, 2024.
Promoter Holding Pre-Issue: 96.5 %

Promoter Holding Post-Issue: 64.33%
Lead Managers & Market Makers: Interactive Financial Services Ltd & Giriraj Stock Broking.

Company Overview

Established in 2019, Teerth Gopicon Limited specializes in civil engineering projects encompassing a wide range of areas, including road construction, sewage systems, and water distribution works. The company operates primarily in Madhya Pradesh, a region witnessing significant growth in infrastructure development.

Key aspects of their business include:

• Diverse Project Portfolio: The company has undertaken various construction projects, ranging from residential buildings to large-scale public infrastructure works. This diverse portfolio showcases their ability to handle a variety of projects, enhancing their reliability and market appeal.

• Government Contracts and Subcontracting: Teerth Gopicon has successfully secured contracts from central and state governments, such as ISCDL, IMC, USCL, UMC, MPJNM, etc. Additionally, their involvement as a subcontractor underlines their capability to collaborate and deliver on larger projects.

• Specialized Services: Beyond general construction, the company has delved into specialized areas like sewage treatment plants, water supply systems, and road construction. Their expertise in these niche areas adds value to their service offerings.

Financial Performance

The company has shown significant growth in total assets, revenue, and profit after tax over recent years.

Key Performance Indicators

Return on Net Worth (RoNW): 22.72%.

Net Asset Value (NAV): ₹15.77 per equity share.

Price/Earnings (P/E): 49.55 based on 2022-23 earnings.

IPO Objectives

 Funding working capital requirements.

 General corporate purposes.

Strengths

• Rapid Growth and Expansion: Since its inception, Teerth Gopicon has shown rapid growth, both in terms of financial performance and project scale. This rapid expansion is a positive indicator of the company's capabilities and market position.

• Robust Order Book: As of September 30, 2023, Teerth Gopicon boasted an impressive order book of Rs. 114034.00 lakhs, reflecting strong demand for their services and a healthy pipeline of future projects.

• Strong Foothold in Madhya Pradesh: Their established presence in Madhya Pradesh, a state actively pursuing infrastructural development, places them in a strategic position to capitalize on new opportunities.

Risks

• Market Competition: The construction sector in India is highly competitive. Teerth Gopicon faces competition from both established players and new entrants, which could impact their market share and profitability.

• Regulatory and Compliance Risks: Being in the construction industry, the company is subject to various regulations and compliance requirements. Any changes in these regulations or non-compliance issues could affect their operations.

• Project Execution Risks: Construction projects carry inherent risks, including delays, cost overruns, and challenges in procurement. Effective management of these risks is crucial for the timely and profitable completion of projects.

Peer Comparison

The company stands alongside peers such as Man Infraconstruction Limited, ITD Cementation India Limited, Likhitha Infrastructure Limited, and Udayshivakumar Infra Limited, with varying financial metrics like EPS, P/E ratio, and RoNW.

Closing Thoughts

It's essential to scrutinize their financial records, market reputation, and project sustainability. With the construction industry's dynamic nature, understanding the specific risks and opportunities this IPO presents is key. We believe that thorough, personalized research is imperative for anyone considering  investment, ensuring alignment with individual financial goals and risk profiles.

For more information, visit the company website.

Teerth Gopicon Limited IPO GMP aka Grey Market Premium is ₹10.

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