Teerth Gopicon Limited IPO Review
Teerth Gopicon Limited, a name that has become synonymous with infrastructure development, particularly in Madhya Pradesh, India, has carved out a niche for itself in the construction sector. Incorporated on October 10, 2019, in Ahmedabad, Gujarat, the company swiftly expanded its operations to become a key player in engineering construction and development.
At the helm of Teerth Gopicon Limited is the Kumbhani family, with Mr. Maheshbhai Kumbhani leading the charge as the founder. The company's journey began under his guidance, with the establishment of Gopi Construction as a proprietorship in 2009 before evolving into the entity we know today. Alongside Maheshbhai, Chandrikaben Kumbhani and Pallav Kumbhani form the core of the promoter family, steering the company towards growth and innovation.
Teerth Gopicon Limited's roots are firmly planted in Ahmedabad, Gujarat, where it was registered under the Companies Act of 2013. Despite its origin in Gujarat, the company's significant impact has been in Madhya Pradesh, where it has undertaken numerous projects, ranging from road construction to water supply and sewerage systems.
The inception of Teerth Gopicon Limited was driven by the vision to contribute to India's burgeoning infrastructure needs. Recognizing the critical role of infrastructure in economic development, the company started to participate in the nation-building process. It sought to leverage the expertise gained from Gopi Construction and scale operations to meet the growing demands of the construction industry.
Teerth Gopicon Limited operates primarily in the civil engineering sector, with a focus on building construction work, water supply, pipeline, sewerage network, sewerage treatment plant, and road work. The company has also made its mark as an EPC (Engineering, Procurement, and Construction) contractor, providing comprehensive services from detailed engineering to project execution.
The driving force behind the establishment of Teerth Gopicon Limited was to address the critical infrastructure gap in India. With a focus on sustainable development and quality construction, the company aimed to contribute significantly to the nation's growth. The need for improved roads, efficient water supply, and robust sewerage systems in Madhya Pradesh presented an opportunity for Teerth Gopicon Limited to apply its expertise and deliver solutions that would have a lasting impact on the community and the economy.
Teerth Gopicon Limited's journey from a modest proprietorship to a limited company is a testament to its commitment to quality, innovation, and nation-building. With a clear vision and strong leadership, the company continues to contribute to India's infrastructure landscape, paving the way for a more connected and developed nation.
Competitive Strengths
As investors and industry watchers, it's crucial to delve into the competitive strengths that set Teerth Gopicon apart in the infrastructure sector.
Revenue, Sale, and Profit
Teerth Gopicon Limited, a company incorporated in 2019, has shown a progressive financial performance over the recent fiscal years. For the financial year 2022-23, the company reported a revenue of Rs 39.15 crore and a net profit of Rs 1.80 crore. This was a significant increase from the previous year, indicating a strong growth trajectory for the company. In the following year, FY2023-24, the company's revenue saw a substantial rise to Rs 69.70 crore, with the net profit escalating to Rs 7.84 crore for the April-January period. This remarkable growth can be attributed to the company's strategic initiatives and expansion of its business operations. The company's financial reports are a testament to its robust business model and operational efficiency. The increase in revenue and profit margins reflects the company's ability to scale its operations while maintaining cost-effectiveness.
Distribution Network and Geographical Reach
The company's operations are primarily concentrated in the state of Madhya Pradesh, India, with significant activities in cities such as Indore, Chhatarpur, Sagar, Dindori, Jabalpur, and Ujjain. As part of its expansion strategy, Teerth Gopicon Limited has been gradually extending its presence beyond Madhya Pradesh, aiming to establish a more extensive distribution network and geographical reach. The company's growth plans include raising capital through a public issue to fund its working capital requirements and general corporate purposes, which indicates an ambition to broaden its operational footprint. With a robust order book and a history of working as a registered civil contractor for various Central and State Government departments, Teerth Gopicon Limited is poised to enhance its distribution network and geographical reach soon.
Unique Features
Teerth Gopicon Limited, established in 2019, has carved a niche in the construction sector of Madhya Pradesh with its specialized focus on infrastructure projects such as sewage systems, roads, and water supply. Teerth Gopicon Limited is demonstrating its commitment to both economic and social development. The company's impressive growth trajectory is highlighted by its doubled net worth from the previous fiscal year and a current market capitalization of Rs. 133.2 crores. Teerth Gopicon Limited's portfolio includes a variety of civil engineering projects, ranging from residential tower construction in Indore as a subcontractor to comprehensive civil works for central and state government contracts. This diversification of projects showcases the company's versatility and ability to handle complex engineering challenges. Moreover, Teerth Gopicon Limited's commitment to quality is evident in its ISO 9001:2015 certification, which underscores its adherence to international standards in EPC contracting and civil engineering projects. The company's strategic approach to capturing market share includes taking on contracts from registered contractors of the central and state governments, as well as engaging in private sector construction work, allowing it to maintain a steady stream of diverse and profitable projects.
Investment In Research and Development
Teerth Gopicon Limited, the company, that specializes in road construction, sewerage, and water distribution projects, primarily in the state of Madhya Pradesh, India, intends to use a significant portion of IPO funds to bolster its working capital requirements and for general corporate purposes. While the detailed allocation towards research and development (R&D) is not explicitly mentioned, the infusion of capital is indicative of the company's commitment to growth and innovation. With a robust order book valued at Rs. 904.98 crore as of January 31, 2024 and a history of executing various projects for government departments, Teerth Gopicon Limited is poised to leverage its increased financial flexibility to potentially enhance its R&D capabilities, driving further advancements in its specialized fields of engineering construction and development.
Teerth Gopicon Limited IPO Details
Issue Date: The issue date in an IPO, also known as the initial offering date, is when a company's stock is first made available for public purchase. This date is a significant milestone in the process of an initial public offering, marking the transition of a company from private to public status. (Issue Date: April 8, 2024 to April 10, 2024).
Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Tuesday, April 16, 2024).
Face Value of Shares: The face value of shares in an IPO, also known as the nominal or par value, is a predetermined fixed price set by the company and mentioned in its memorandum of association. It represents the initial capital contributed by the founders and is used for accounting and regulatory purposes. During an IPO, shares are typically offered at a price higher than the face value, which includes a premium based on market demand and the company's performance indicators. (IPO Face Value: ₹10 per share).
Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹111 per share).
Lot Size: In an Initial Public Offering (IPO), the lot size refers to the minimum number of shares an investor can apply for. It is a pre-determined set of shares that investors must bid for, and applications must be in multiples of this lot size. The lot size ensures a standardized bidding process and helps in the fair allocation of shares among investors. (Lot Size: 1200 Shares).
Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 3,999,600 shares (aggregating up to ₹44.40 Cr)).
Fresh Issue: A fresh issue of shares in an IPO refers to the creation and sale of new shares by a company to the public for the first time to raise capital. Unlike an Offer for Sale, where existing shareholders sell their shares, a fresh issue results in new funds going directly to the company, which can be used for various purposes such as expansion, debt repayment, or investment in new projects. This process dilutes the existing shareholding but does not provide an exit route for current investors. (Fresh Issue: 3,999,600 shares (aggregating up to ₹44.40 Cr)).
Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Fixed Price Issue IPO).
Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: NSE SME).
Retail Shares Offered: This refers to the portion of the total shares being made available specifically for individual investors, distinct from institutional investors like banks or hedge funds. Regulatory bodies often mandate a minimum percentage of shares be reserved for retail investors, aiming to promote broader public participation in the capital markets. (Retail Shares Offered: 1,899,600 (47.49%)).
Market Maker Shares Offered: Market Maker Shares in an IPO refer to the shares that a market maker commits to buy and sell to ensure liquidity for the stock once it starts trading on the exchange. Market makers are typically brokerage firms that agree to hold a certain number of shares of the new issue to facilitate trading and provide stability to the stock price. They play a crucial role in the SME (Small and Medium Enterprises) segment, where they help in price discovery and improve the liquidity of stocks by providing two-way quotes. (Market Maker Shares Offered: 200,400 (5.01%)).
Other Shares Offered: In an Initial Public Offering (IPO), a private company offers various types of shares to the public to raise capital. The two primary types of offerings in an IPO are Fixed Price Offering and Book Building Offering. In a Fixed Price Offering, the company sets a specific price for the shares, and investors know the exact price before they buy. On the other hand, a Book Building Offering involves a price range, and investors bid within this range. The final price is determined after considering all bids. Additionally, companies may allocate shares to different categories of investors, such as Retail Individual Investors (RIIs), Qualified Institutional Investors (QIIs), Non-Institutional Investors (NIIs), or High Networth Individuals (HNIs), and sometimes even employees as part of an Employee Stock Ownership Plan (ESOP). Each type of share offering and investor category has its own set of rules and allocation percentages during an IPO. (Other Shares Offered: 1,899,600 (47.49%)).
Competitors of Teerth Gopicon Limited
Teerth Gopicon Limited, a civil engineering and development company in Madhya Pradesh, India, faces competition from various players in the infrastructure sector. While the exact competitors might depend on the specific project being tendered, here's a breakdown of potential competitors based on Teerth Gopicon's areas of expertise:
Civil Engineering Projects:
Man Infraconstruction Limited: A larger competitor with a wider geographical presence and experience in similar projects like roads, sewerage systems, and water networks.
ITD Cementation India Limited: A significant player with a strong reputation, focusing on a broader range of civil engineering projects beyond Teerth Gopicon's core competencies.
Likhitha Infrastructure Limited: Another competitor with a presence in Madhya Pradesh, potentially competing for projects based on cost-effectiveness.
Udayshivakumar Infra Limited: A competitor that might target smaller projects based on their experience and scale.
EPC (Engineering, Procurement, and Construction) Services:
Companies that offer similar EPC services for government projects in Madhya Pradesh could be considered competitors. Researching companies registered with government agencies like ISCDL, IMC, USCL, UMC, and MPJNM might reveal some of Teerth Gopicon's competitors in this segment.
The competitive analysis also includes companies like CROPSTER AGRO and Shraddha Prime, each with their own financial standings and market positions. For instance, CROPSTER AGRO has a negative net worth and minimal assets, while Shraddha Prime has a modest net worth of INR 1.35 crores and total assets of INR 1.36 crores.
Regional Contractors:
Smaller regional contractors with experience in specific areas like building construction or road works could compete with Teerth Gopicon for tenders, particularly for smaller projects.
Understanding the competitive landscape is crucial for stakeholders, investors, and analysts to make informed decisions regarding their engagement with Teerth Gopicon Limited and its industry counterparts. The company's ability to innovate, adapt, and deliver quality projects will ultimately determine its success in the competitive construction sector.
Conclusion
In conclusion, the Teerth Gopicon Limited IPO presents a compelling opportunity for investors seeking to diversify their portfolio with a stake in the engineering construction sector. With a consistent track record of revenue growth and a robust pipeline of projects, particularly in the infrastructure domain, the company stands as a testament to the potential of emerging players in the Indian market. The IPO, priced at INR 111 per share, reflects the company's confidence in its future prospects, supported by a strong order book and an experienced management team. While the construction industry is known for its cyclical nature, Teerth Gopicon's strategic focus on essential infrastructure such as roads, sewerage, and water distribution positions it well to weather market fluctuations. As with any investment, potential investors should conduct thorough due diligence, considering the company's financials, market conditions, and long-term growth strategy. However, for those looking to invest in a company with a solid foundation and a clear vision for growth, Teerth Gopicon Limited's IPO warrants consideration. Investors are advised to keep an eye on the company's performance post-listing to gauge the market's reception and the stock's subsequent trajectory.
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Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the public for the first time. It allows the company to raise capital by selling shares to investors and get listed on a stock exchange.
Q: How can I apply for an IPO?
To apply for an IPO, follow these steps:
Open a Demat account with a registered Depository Participant (DP).
Choose the IPO you want to apply for.
Fill out the IPO application form through your broker or online platform.
Specify the number of shares you wish to apply for and the price range (if it’s a book-building issue).
Q: What is ASBA (Application Supported by Blocked Amount)?
ASBA is a payment method for IPOs where the bid amount is blocked in your bank account until the allotment process is complete. It ensures that you have sufficient funds to cover the shares you applied for.
Q: Can I make payments through UPI for an IPO?
Yes, you can use the Unified Payments Interface (UPI) to apply for an IPO. Many banks and brokers allow UPI-based payments during the IPO application process. Make sure your UPI ID is linked to your bank account.
Q: What is the difference between a fixed price issue and a book-building issue?
Fixed Price Method: The company determines a fixed price for issuing shares, and investors know the exact price before the IPO.
Book Building Method: The company offers a price range, and investors bid within that range. The final price is determined after the bidding process.
Q: What is the difference between the floor price and cut-off price in a book-building issue?
Floor Price: The lowest price at which an investor can bid within the price range.
Cut-off Price: An option where investors bid at the highest price (or cap price) without specifying a bid amount. They receive the allotment at the final determined price.
Q: What does ‘DP name’ mean in an IPO online form?
DP Name: It refers to the name of your Depository Participant (DP) with whom you hold your Demat account. You need to provide this information while applying for an IPO.
Q: What are the different investor categories in an IPO?
RII (Retail Individual Investor): Individual investors who apply for a small number of shares.
NII (Non-Institutional Investor): High-net-worth individuals, corporate bodies, and trusts.
QIB (Qualified Institutional Buyer): Institutional investors like mutual funds, banks, and foreign institutional investors.
Anchor Investors: Institutional investors who invest before the IPO opens for subscription.
Q: How is the allotment process done in an IPO?
The allotment process considers various factors, including investor categories, oversubscription, and the price at which bids are placed. The final allotment is based on demand and availability of shares.
Q: What happens if I don’t get the full allotment of shares in an IPO?
If the number of allotted shares is less than what you applied for, the excess funds are refunded to your bank account. You’ll receive the allotted shares, and any remaining funds will be returned.