Annai Infra Developers Pvt. Ltd has filed a draft prospectus with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO). The Tamil Nadu-based engineering, procurement and construction company operates in the sphere of water management which includes irrigation projects.
The IPO is a fresh sale of 10 million shares by the company, including 1.6 million shares in a pre-IPO private placement.
The issue size is pegged at Rs 200-225 crore ($29-32.6 million), and the IPO may result in a 25-30% stake dilution on a post-issue basis. The IPO, as and when it happens, may value the company at Rs 755 crore ($109 million), VCCircle estimates show.
After the IPO, the promoter’s holding may drop from 99.99% to below 75% -- a threshold mandated by the capital markets regulator as part of minimum public shareholding norms for listed entities.
An IPO and market listing will see Annai join peer companies Indian Hume Pipe Co. Ltd and RPP Infra Projects Ltd on the stock exchanges.
Pantomath Capital Advisors is the sole merchant banker arranging and managing the share sale process.
Incorporated in November 2008, the company’s operations include building dams, laying pipelines and waste water plants.
As on September 2018, its order book was Rs 652.08 crore comprising 19 projects that included three irrigation projects, besides receiving orders to the tune of Rs 464 crore between October 2018 and January 2019.
The company has executed 79 projects between fiscal 2014 and 2018 in water management and irrigation, road, building, electrical & power segments.
Annai predominantly operates in Tamil Nadu and Kerala, and undertakes projects planned by governmental authorities such as Chennai Corporation, Tamil Nadu Water Supply and Drainage Board (TWAD), Coimbatore City Municipal Corporation, Public Works Department (PWD) and other government organisations.
Subramaniam Ashokkumar and Duraisamy Kalaiselvi are the company’s promoters. Subramaniam has more than 15 years of industry experience.
According to a report by research and rating agency CRISIL, the government’s spending in the water supply and sewage sector will touch Rs 2.6 lakh crore in the next five years, of which Rs 10,500 crore will be spent in Tamil Nadu.
Annai Infra posted Rs 16.24 crore in consolidated net profit for six months ended September 2018 on revenue of Rs 247.19 crore for the same period.
Its full year fiscal 2017-18 net profit stood at Rs 30 crore on revenue of Rs 467.92 crore, as per its DRHP.