AVP Infracon IPO GMP, Date, Price Band & Review

AVP Infracon IPO Details

AVP Infracon IPO is a 100% book-built issue of ₹52 crore, entirely a fresh issue of shares, with a face value of ₹10 per share. The company filed its DRHP with SEBI on January 6, 2024.

The price band of the issue was set at ₹71 to ₹75 per share and the minimum amount of investment required by an individual investor was ₹1,20,000 (1600 shares) (1 lot). The IPO opened for subscription from March 13 to 15, 2024, on the NSE SME platform, with a tentative listing date fixed as March 20, 2024

Share India Capital Services Private Limited acted as the Book Running Lead Manager, while Purva Sharegistry India Private Limited was appointed as the Registrar to the Issue.

AVP Infracon IPO Date & Timeline

The AVP Infracon IPO was officially set to open for subscription on Mar 13, 2024, and close on Mar 15, 2024. The company initially filed its Draft Red Herring Prospectus (DRHP) on January 6, 2024, and subsequently finalized its schedule following SEBI approval. Once the subscription window closed, allotment was expected on Mar 18, 2024. Following this, the firm was scheduled to initiate refunds and credit shares to successful investors' demat accounts on Mar 19, 2024. Finally, shares of AVP Infracon Ltd. were tentatively scheduled to list on the stock exchanges on Mar 20, 2024.

Company Background

AVP Infracon Ltd. was incorporated in Chennai as AVP Constructions Private Limited on September 9, 2009. The company subsequently changed its name to AVP Infracon Private Limited in October 2023 and was converted into a public limited company in November 2023 under the name AVP Infracon Limited. Its registered office is located at Besant Nagar, Chennai, Tamil Nadu.

The company's core business is infrastructure construction, with a particular focus on road projects. It undertakes projects using Bill of Quantities and Engineering, Procurement and Construction methods. Its activities include construction and development of roads, national highways, expressways, flyovers, bridges, viaducts and irrigation projects, as well as selected urban and commercial infrastructure works.

The company states that it has 14 years of experience in the business and more than 100 experienced employees, including contractual personnel and has completed around 40 projects.

Operations & Product Range

AVP Infracon operates primarily as an infrastructure construction contractor. Its project portfolio covers roads, bridges, irrigation and canal projects, flyovers and industrial areas, with projects undertaken mainly in Tamil Nadu. The company has executed road-over-bridge construction, culverts, drains, highway improvement and rebuilding work, retaining walls and flyovers.

Its operating model involves bidding for construction contracts and executing projects either independently or through joint ventures. The company describes itself as having in-house capabilities spanning project conceptualisation through completion. It also has exposure to ready-mix concrete through AVP RMC, an associated partnership firm in which AVP Infracon held a 90% profit-sharing interest.

The company has also entered into joint-venture arrangements for larger projects. JWP-AVP was established with Jawahar Constructions for four-laning road construction, with AVP Infracon holding a 10% share. Another joint venture, CDR-AVP, was formed for participation in an EPC contract, with AVP Infracon holding a 20% share in the construction aspect.

Facilities & Capacity

As a construction company, AVP Infracon's operational infrastructure is based around project sites, construction equipment, materials and supporting resources rather than a conventional manufacturing capacity model. Its registered office is located at Besant Nagar, Chennai. The company also owns an AVP Infracon property at Avurivakkam in the Trivellore district and has a leasehold registered office facility.

The company had completed 40 projects worth approximately ₹313.21 crore. As of March 2024, the company had done 14 projects, including 12 ongoing projects worth approximately ₹201.88 crore and two additional projects where it had emerged as L1, with an aggregate value of approximately ₹34.21 crore.

Its operational resources also include construction materials such as bitumen, aggregates, cement and LDO oil sourced from suppliers including Indian Oil Corporation, Hindustan Petroleum Corporation, VSR Infra and other vendors.

Brands & Market Presence

The company's business presence is centred on the AVP Infracon name and its infrastructure projects rather than a consumer-facing product brand. The company has made an application for registration of the trademark and “AVP Constructions” under Class 37.

Geographically, the company's project activity is concentrated mainly in Tamil Nadu. Its completed and ongoing work includes road and highway projects associated with government authorities, including projects relating to NH 48 and NH 209.

Revenue Streams & Business Model

AVP Infracon primarily generates revenue from construction contracts. Its business is mainly project-based, with revenue generated as construction projects are executed and billed. The company bids for infrastructure projects and undertakes work either independently or through joint ventures.

Government-related infrastructure forms an important part of the company's revenue profile, as AVP is primarily dependent on projects awarded by domestic governmental authorities and entities funded by the central or state governments.

Financial Performance

AVP Infracon reported revenue from operations of ₹63.88 crore in FY22 and ₹106.33 crore in FY23. Revenue therefore increased by 10.16% in FY22 and 66.44% in FY23. Profit after tax stood at ₹3.99 crore and ₹11.53 crore, respectively, over the same three financial years. Based on these figures, revenue recorded a CAGR of approximately 35.4% between FY21 and FY23, while PAT increased substantially over the period. For the period ended October 31, 2023, consolidated revenue from operations stood at ₹69.18 crore and PAT at ₹8.34 crore.

Management & Shareholding

The promoters of AVP Infracon are D Prasanna, B Venkateshwarlu, Vasanth D and D Bhagyavathy. Before the IPO, they collectively held 1.46 crore equity shares, representing 81.25% of the pre-issue paid-up equity share capital. Individually, D Prasanna held 46.46%, B Venkateshwarlu 31.67%, Vasanth D 2.08% and D Bhagyavathy 1.04%. But after the IPO, the promoters' shareholders will be slightly diluted, as the offering include entirely a fresh issue of share which re-generate the issue size of existing shareholders.

Board & Key Management

D Prasanna is the Chairman and Managing Director and is identified as a promoter, while B Venkateshwarlu is the Joint Managing Director and Chief Financial Officer. Vasanth D serves as Whole-Time Director, while D Bhagyavathy is a Non-Executive Director. The company also appointed Priyanka Singh as Company Secretary and Compliance Officer with effect from December 18, 2023. Rajan Ethiraja was appointed as an Independent Director in December 2023.

D Prasanna and B Venkateshwarlu have 18 years of overall experience, including more than 14 years in infrastructure, while Vasanth D has more than 13 years of experience in infrastructure and ready-mix concrete.