The Annu Projects initial public offering (IPO) is now open for subscription, with the New Delhi-based engineering, procurement, and construction (EPC) company aiming to raise Rs 175 crore. The offering, available from August 25 to August 28, has attracted varied opinions from brokerage firms, highlighting both the company's strengths and potential risks.
IPO Details and Company Overview
Annu Projects is an EPC firm specializing in the design, development, implementation, operations, and maintenance of critical overhead and underground utility infrastructure. This includes projects in telecom, sewerage, and gas pipeline verticals. The company is offering its shares within a price band of Rs 94-99 apiece, with investors required to apply for a minimum of 151 shares.
The entire IPO consists of a fresh issue of 1,76,83,00 equity shares. Proceeds from the sale are earmarked for funding capital expenditure to purchase machinery and equipment, supporting working capital needs, and for general corporate purposes. Post-issue, Annu Projects is expected to command a market capitalization just under Rs 650 crore.
Brokerage Insights and Risks
Brokerage firms have provided a mix of "subscribe" and "neutral" ratings for the Annu Projects IPO. BP Equities recommended a 'subscribe' rating for the long term, citing the company's rapid revenue growth, strong profitability compared to peers, healthy capital efficiency, and robust order visibility. They view the valuation as reasonable despite acknowledging working-capital intensity and customer concentration as risks.
Conversely, SBI Securities assigned a 'neutral' rating. While recognizing Annu Projects' diversified EPC capabilities, strong execution, and healthy earnings growth (revenue, EBITDA, and PAT CAGR of 25%, 33%, and 38% respectively for FY24-26), they raised concerns. These include high customer concentration, significant dependence on government contracts, and a stretched working capital cycle, which could affect the quality and durability of future earnings. Anand Rathi Share & Stock Brokers also suggested a 'subscribe for long term' but noted the IPO valuation appears fully priced at the upper band.
Financial Performance and Listing Outlook
For the financial year ending March 31, 2026, Annu Projects reported a net profit of Rs 33.03 crore on revenues of Rs 244.59 crore. Its return on equity (RoE) stood at 21.27%, return on capital employed (RoCE) at 22.66%, and EBITDA margins at 20.8%. The issue is valued at a Price-to-Earnings (P/E) multiple of 19.6 times its FY26 earnings on a post-issue basis, which analysts consider in line with industry peers.
Ahead of its official listing, Annu Projects has seen a muted grey market premium (GMP) of Rs 2-4 per share, suggesting a modest listing gain of 2-4 percent for investors. The company has reserved 10% of shares for Qualified Institutional Bidders (QIBs), 40% for Non-Institutional Investors (NIIs), and 50% for retail investors. Mefcom Capital Markets is the sole book-running lead manager, with Kfin Technologies serving as the registrar. Shares are slated to list on both the BSE and NSE on Wednesday, September 2.