Annai Infra Developers Pvt. Ltd, a Tamil Nadu-based engineering, procurement and construction company, has received regulatory nod to float an initial public offering (IPO).
The Securities and Exchange Board of India (SEBI) issued final observations to Annai’s IPO proposal on 12 July, according to information on the capital markets regulator’s website.
Annai Infra is the 17th company to receive regulatory clearance this year to float an IPO. SEBI had approved 72 IPO proposals last year and 46 in 2017.
Annai Infra had filed its IPO proposal on 30 March, joining a half-dozen engineering companies to opt for the capital markets route.
The public offering involves a sale of 10 million new 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 around Rs 755 crore ($109 million), VCCircle estimates show.
After the IPO, the promoter holding in the company may drop from 99.99% to below the 75% threshold of minimum public shareholding mandated by the capital markets regulator for listed entities.
Subramaniam Ashokkumar and Duraisamy Kalaiselvi are the company’s promoters.
An IPO and market listing will see Annai join peers Indian Hume Pipe Co. Ltd and RPP Infra Projects Ltd on the stock exchanges.
Pantomath Capital Advisors is the sole merchant banker arranging the share sale.
Annai Infra was incorporated in November 2008 and operates in areas of 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. It received orders worth Rs 464 crore between October 2018 and January 2019.
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, Coimbatore City Municipal Corporation and Public Works Department.
Annai Infra posted Rs 16.24 crore in consolidated net profit for the six months ended September 2018 on revenue of Rs 247.19 crore. Its net profit for full 2017-18 stood at Rs 30 crore on revenue of Rs 467.92 crore, as per its draft red herring prospectus.