Integrity Infrabuild IPO: Gujarat Infra Firm’s NSE Debut

The Indian infrastructure sector continues to gain prominence as public spending, government policies, and urbanization accelerate demand for civil engineering and construction services. Against this backdrop, Integrity Infrabuild Developers Ltd., a Gujarat-based infrastructure company, is tapping the capital markets with its ₹12 crore Initial Public Offering (IPO). The company, which focuses on executing government construction projects, plans to list on the NSE SME platform.

The fixed-price IPO is slated to open on May 13, 2025, and close on May 15, 2025, with shares priced at ₹100 each. The listing is expected to take place on May 20, 2025. This article offers a detailed breakdown of the IPO, including financial analysis, business potential, key strengths, associated risks, and a verdict on whether the IPO is worth subscribing to.

Company Overview

Founded in 2017, Integrity Infrabuild Developers Ltd. began as a partnership firm and was later incorporated as a public limited company in 2024. The company is engaged in civil construction work, including the construction of roads, bridges, buildings, and drainage systems, primarily under government tenders.

Key Facts:

• Registered Office: Vadodara, Gujarat

• Core Activities: EPC and contract-based civil works for government bodies

• License: Holds a Class-A contractor registration from the Gujarat Government

• Projects Executed: 111 civil construction projects as of March 2025

• Order Book (March 2025): ₹205.98 crore

The company works mainly for municipal corporations, government departments, and local public bodies.

IPO Details

Objectives of the IPO

The net proceeds from the issue will be allocated to the following objectives:

1. Capital Expenditure (₹5.03 crore)

Purchase of machinery and equipment to enhance in-house construction capabilities and reduce outsourcing.

2. Working Capital Requirements (₹3.64 crore)

Support operational liquidity to fund raw materials, labor payments, and other construction-related expenses.

3. General Corporate Purposes (₹2.40 crore)

Administrative overheads, compliance, and contingency needs.

Business Model

Integrity Infrabuild follows an EPC (Engineering, Procurement, and Construction) model, where the company executes government-awarded projects from start to finish. The contracts typically include:

• Civil construction (roads, footpaths, stormwater drains)

• Infrastructure development (canal work, bridges, public facilities)

• Renovation and upgradation of municipal infrastructure

Most contracts are fixed-bid, milestone-based payment terms with government departments. The Class-A license allows the company to tender for high-value contracts across Gujarat.

Financial Performance

The company has posted consistent top-line growth over the last three fiscal years, with a sharp rise in profit in FY24. This reflects improving operational efficiency and better execution margins.

Revenue and Profit Trends:

Other Key Financial Ratios (FY24):

• Earnings Per Share (EPS): ₹3.06

• Return on Net Worth (RoNW): 19.05%

• Net Worth: ₹4.98 crore

• Debt-Equity Ratio: 0.34

Analysis:

• The revenue CAGR from FY22 to FY24 stands at 39%, indicating robust growth.

• The increase in PAT (from ₹0.32 crore to ₹0.95 crore) suggests improving cost management and gross margins.

• The RoNW of 19% is respectable for a government-centric civil contractor.

Order Book and Future Revenue Visibility

As of March 2025, the company reported a pending order book of ₹205.98 crore, providing 2–3 years of revenue visibility. This includes ongoing projects with Gujarat government departments like:

• Urban development authority

• Rural development agencies

• State water and infrastructure boards

This backlog acts as a financial cushion and a forward earnings indicator.

Valuation

At an IPO price of ₹100 and FY24 EPS of ₹3.06, the stock is valued at:

• Price to Earnings (P/E): 32.68x

• Industry SME Infra P/E Range: 25x to 45x

Although the P/E appears slightly elevated, it can be justified by:

• Strong revenue pipeline

• Lower-than-industry debt

• Long-term government contract relationships

• Class-A contractor exclusivity

Peer Comparison:

The IPO is neither overvalued nor deeply discounted, suggesting a fair valuation given the company’s execution history and sector focus.

SWOT Analysis

Strengths:

• Government-focused projects ensure payment reliability.

• Strong order book gives revenue predictability.

• Class-A contractor license increases bid eligibility.

• Operating within Gujarat enables local expertise and logistical efficiency.

Weaknesses:

• Low profit margins typical of EPC business models.

• Limited operational scale compared to larger infra players.

• IPO size is small, implying limited institutional visibility.

Opportunities:

• Urbanization and Smart City Missions offer growth potential.

• Possible geographic expansion to neighboring states.

• Capacity expansion through new equipment can improve margins.

Threats:

• Regulatory delays or changes in public procurement laws.

• Price volatility in cement, steel, and labor could hurt profitability.

• Political instability may impact government project execution.

 Industry Outlook

India’s construction sector is projected to grow at a CAGR of 8.5% between FY25–FY30, led by government spending on infrastructure, including roads, water supply, and rural housing.

Key policy drivers include:

• PM Gati Shakti Master Plan

• AMRUT and Smart Cities Mission

• Bharatmala and Pradhan Mantri Gram Sadak Yojana

This positions regional contractors like Integrity Infrabuild to benefit from tier-II and tier-III infra expansion, particularly as central and state governments decentralize contracts to local firms.

Grey Market Sentiment and Subscription Trends

As of pre-opening day:

• Grey Market Premium (GMP): ₹3–₹5

• Subscription Rate: Awaited at the time of publishing

• Investor Sentiment: Mild to moderate enthusiasm from retail circles

Limited size and lower visibility may reduce HNI interest, but retail allotment is more probable.

 Investment Verdict

✅ Why You May Consider Subscribing:

• Strong growth in revenue and order book

• Reasonable RoNW and manageable debt

• Well-defined IPO utilization plan (capital + working funds)

• Government-backed contracts reduce default risk

• Potential for stable long-term compounding

❌ Why You May Exercise Caution:

• Limited geographic diversification

• Slim PAT margins typical of infra contractors

• SME platform listing may reduce post-listing liquidity

• High retail investment threshold (₹1.2 lakh minimum)

Final Conclusion

Integrity Infrabuild Developers Ltd. presents a niche opportunity in India’s booming infrastructure ecosystem. Its focus on government contracts in Gujarat offers safety, but it comes with limitations in terms of geography and scale. Financial performance is stable and promising, and while the IPO valuation is not cheap, it appears fair.

For long-term investors who understand the risks of SME listings and are looking to diversify into infrastructure through regional contractors, this IPO offers a decent value proposition.

ALSO READ: Virtual Galaxy Infotech IPO: Tech SME Targets High Growth