19/02/2018 HG Infra Engineering IPO - Should you Subscribe? | Myinvestmentideas.

com

Home About Me Privacy Policy Terms and Conditions Suggest a topic Latest Interest rates

Stocks Mutual Funds Insurance Plans Taxation Fixed Income Latest Interest rates

You are here: Home > Stocks

1 Multi-Bagger Stock 2018

Intraday + MultiBagger Stock Tips ( No Advance - Join Free ) promo.safebulls.com

2 Easily Scale Web Apps

Build your next app on DigitalOcean with a free $100 credit. try.digitalocean.com

3 Submit Resume Now

Immediate Requirement. Sign up to Apply & Find Jobs monsterindia.com

4 7 Days Free Trial

Expert Advise with 90 % accuracy in Indian Stock Market niftyalert.com

HG Infra Engineering IPO – Should you Subscribe? Search your favorite article

February 19, 2018  Suresh KP

HG Infra Engineering IPO – Should you
Search …

Subscribe?

Ads by Google
Jaipur based HG Infra Engineering IPO would open
for subscription on 26th February, 2018. HG Infra IPO
Engineering is one of the leading infrastructure
construction, development and management
Invested

company in India. Its consolidated revenues grew

New Construction Cost
at 30% CAGR in the last 4 years. It generated
consolidated margins of around 5% in FY17. Due to Best Performing Mutual Funds
increased spending by Govt of India for Infra
Structure sector, Infra companies are expected to
gain. What are the positive factors in HG Infra Engineering Ltd IPO? What are some of the hidden factors Get these tips to your mailbox
in HG Infra Engineering IPO? Should you invest in HG Infra Engineering IPO?
Join 25,251 other subscribers
Also Read: Best Largecap Mutual Funds to invest in 2018
Email Address
About HG Infra Engineering Ltd
Subscribe

Person Behind this blog

They are an infrastructure construction, development and management company with extensive Suresh KP i.e. me, have written
1250+ articles on this Blog. I love
experience in company focus area of road projects, including highways, bridges and flyovers. company
doing analysis on various Best
main business operations include
Investment Plans like mutual funds,
(i) providing engineering, procurement and construction services on a fixed-sum turnkey basis and Stocks, IPO’s, NCD Bonds, Insurance
products. If you like our blog, you
(ii) undertaking civil construction and related infrastructure projects on item rate and lump sum basis, can share some of the good articles
primarily in the roads and highway sector. They have also forayed into executing water pipeline projects on your Facebook or Twitter. This
and are currently undertaking two water supply projects in Rajasthan on turnkey basis which includes would be the BIGGEST gift which
the designing, construction, operation and maintenance of the project.
you would be giving to us.

HG Infra Engineering IPO Issue details

Trending Posts
IPO opening date: 26-February-2018

IPO closure date: 28-February-2018 90 Good Small Business Ideas

with Low Investment
Face Value: Rs 10 per share
Top 10 Best Mutual Funds for SIP
Issue price band: Rs 263 to Rs 270 per share. to invest in 2018
Top 8 Best ELSS Tax Saving
Issue size: Approx Rs  457.7 Crores on higher price band Mutual Funds to invest for 2018-

https://myinvestmentideas.com/2018/02/hg-infra-engineering-ipo-should-you-subscribe/ 1/5
19/02/2018 HG Infra Engineering IPO - Should you Subscribe? | Myinvestmentideas.com
IPO Lot size: 55 shares and 55 shares there-off 2019
22 Best Manufacturing Business
Minimum investment: Rs 14,850 Ideas with low investment and high
profits
Leading Managers: SBI Capital Markets and HDFC Bank
Best Mutual Funds to invest in
Listing: BSE / NSE 2018 in Large Cap segment

Download HG Infra Engineering IPO RHP Prospectus at this link.

Objects of the HG Infra Engineering Ltd IPO issue Categories of Articles

Classroom Lessons (104)

Below are the objects of this IPO.
Fixed Income (209)
1) Offer for Sale: The Promoter Selling Shareholders propose to sell Equity Shares held by them. Insurance Plans (127)
Company will not receive any proceeds from the Offer for Sale. Millionare/Crorepathi Ideas (18)
Money Saving Ideas (32)
2) Purchasing capital equipment; Mutual Funds (143)
Other-Ideas (187)
3) Repayment/ prepayment in part or in full, of certain indebtedness; and
Retirement Planning (35)
4) General corporate purposes. Small Business Ideas (17)
Stocks (351)
Company Promoters: Taxation (93)
The Promoters of the Company are Mr. Harendra Singh, Mr Vijendra Singh and Mr Girish Pal Singh.

Company Financials (reinstated-consolidated) Recent Comments

Suresh KP on Latest NPS

Withdrawal Rules 2018 – Is NPS
now attractive compared to other
plans?
NRI US on Top 6 Best Investment
1) The company generated revenue of Rs 472.9 Crores for the year ended Mar-14 and Rs 1,058.5 Crores
Plans in India for NRIs
for the year ended Mar-17.   Suresh KP on Best Mutual Funds
to invest in 2018 in Large Cap
2) The company posted a profit of Rs 10.8 Crores for the year ended Mar-14 and profit of Rs 53.3 Crores
segment
for the year ended Mar-17.

3) Its FY17 EPS is Rs 9.87 and 3 years average EPS is Rs 7.65.

Company Financials (reinstated-standalone)

1) The company generated revenue of Rs 325.4 Crores for the year ended Mar-13 and Rs 973.9 Crores for
the year ended Mar-17. 

2) The company posted a profit of Rs 15.1 Crores for the year ended Mar-13 and profit of Rs 53.3 Crores
for the year ended Mar-17.

3) Its FY17 EPS is Rs 9.87 and 3 years average EPS is Rs 7.65.

https://myinvestmentideas.com/2018/02/hg-infra-engineering-ipo-should-you-subscribe/ 2/5
19/02/2018 HG Infra Engineering IPO - Should you Subscribe? | Myinvestmentideas.com

What are the key strengths of HG Infra Engineering Limited?

Here are the key strengths of the company.

1) Established roads and highways sector focused construction developer.

2) Efficient business modelStrong project management and execution capabilities.

3) Visible growth through company growing Order Book and improved pre-qualification credentials

4) Experienced management team.

What are the Strategies of HG Infra Engineering Ltd?

Here are the key strategies of the company.

1) Continue focusing on company EPC business in the roads and highways sector and enhancing execution
efficiency.

2) Selectively expand company geographical footprint.

3) Selectively explore hybrid annuity based model to optimize company project portfolio.

4) Diversify beyond projects in the roads and highways sector by leveraging existing capabilities.

Reasons to invest in HG Infra Engineering IPO

1) It posted consolidated revenue growth of over 30% in the last 5 years. Companies with consistent and
high growth over a period of time can be multibagger stocks.

https://myinvestmentideas.com/2018/02/hg-infra-engineering-ipo-should-you-subscribe/ 3/5
19/02/2018 HG Infra Engineering IPO - Should you Subscribe? | Myinvestmentideas.com
2) It posted consistent margins in the last 3 years (average of around 5%). Such consistent margins
provide good visibility of company profits in future and they can reward shareholders and investors.

3) With Govt of India focus on Infrastructure development, Infra companies like HF Infra would get
benefitted. 

Risk Factors / Reasons not to invest in a HG Infra Engineering IPO

1) Company revenue from execution of projects in the roads and highways sector constituted
approximately 86.00%, 86.02%, 89.57%, 85.95% and 92.89% of company total revenue for the six months
ended September 30, 2017 and for the years ended March 31, 2017, 2016, 2015 and 2014, respectively
and 95.34% of company standalone revenue in Fiscal 2013. Company business and company financial
condition would be materially and adversely affected if they fail to obtain new contracts.

2) Delays in the completion of construction of current and future projects could lead to termination of
EPC contracts or cost overruns or claims for damages, which could have an adverse effect on company
cash flows, business, results of operations and financial condition.

3) There are certain outstanding litigation involving company, which, if determined adversely, may
affect company business and operations and company reputation.

4) As of November 30, 2017, company ongoing projects in Maharashtra, Rajasthan, Arunachal Pradesh,
Haryana, Uttar Pradesh and Uttarakhand, constitute 51.13%, 44.59%,  1.51%, 0.55%, 1.19% and 1.03%,
respectively, of company Order Book. company business is relatively concentrated in northern and
western part of India and any adverse development in these regions may adversely affect company
business, results of operations and financial condition.

5) They are required to furnish financial and performance bank guarantees as part of company business.
company inability to arrange such guarantees or the invocation of such guarantees may adversely affect
company cash flows and financial condition.

6) Company ability to complete company projects in a timely manner and operate, maintain and expand
company roads and highway projects, is subject to performance of company contractors.

7) Construction faults may arise in company projects, which may result in delays in completion and
revision in estimated costs, thereby affecting company business and results of operations.

8) Other risk factors (Internal and external) can be viewed in the red hearing prospectus (RHP).

Also read: Top Sector Mutual Funds that can double your money quickly

Recommendation / Investment strategy – HG Infra Engineering IPO

1) On the upper price band of Rs 270 and on consolidated restated FY17 EPS of Rs 9.87, P/E ratio works
out to 27x. Even based on last 3 years restated consolidated EPS of Rs 7.65, P/E ratio works out to 35x.
Means, company is asking higher price band of Rs 270 in the P/E ratio of 27x to 35x. There are listed
peers like PNC Infra which is trading at P/E of 41x and Ashoka Buildcon at P/E of 23x, hence HG Infra
Engineering share price is reasonably priced.

2) Company consolidated revenues grew at 30% CAGR in the last 4 years. It is earning consistent profits.
Its issue price is also reasonably priced compared to the listed peers. Investors with 2-3 years time
horizon can invest in this IPO. One may or may not get listing gains in this IPO.

Disclaimer: I have an interest in investing in this IPO. The idea of giving positive and negative factors to
investors in this article is to create awareness and education about this IPO. One should NOT constitute
this as investment advice to buy or not to buy. Please consult your investment advisor before you invest
in such high risk investment options.

Readers, what is your view on this IPO? Do you feel one would get listing gains?

If you enjoyed this article, share it with your friends and colleagues through Face book and Twitter.

Suresh

HG Infra Engineering IPO – Should you Subscribe

https://myinvestmentideas.com/2018/02/hg-infra-engineering-ipo-should-you-subscribe/ 4/5
19/02/2018 HG Infra Engineering IPO - Should you Subscribe? | Myinvestmentideas.com

j s h q r y o 0
SHARES

 Leave a comment

« How Mutual Funds Returns are Taxed from 2018 in India?

Leave a Reply

Your email address will not be published. Required fields are marked *

Name *

Email *

Website

Post Comment

Notify me of follow-up comments by email.

Notify me of new posts by email.

© Myinvestmentideas.com (2013-2018)

:)

https://myinvestmentideas.com/2018/02/hg-infra-engineering-ipo-should-you-subscribe/ 5/5