Integrity Infrabuild IPO: ₹12 Cr Fixed Price SME Issue

Integrity Infrabuild Developers Limited has launched its Initial Public Offering (IPO) on 13th May 2025, entering the capital markets through a fixed price issue. This IPO, aimed at raising ₹12 crore, has sparked mixed reactions among analysts and investors. Despite decent financial performance in recent fiscal years, the IPO is currently receiving a grey market premium (GMP) of ₹0, indicating neutral sentiment from the market. This comprehensive article provides a deep dive into the IPO’s details, GMP trends, financial health, and market positioning to help investors understand whether it holds potential or poses a risk.

IPO Overview and Key Details

Integrity Infrabuild Developers Limited is offering 12 lakh equity shares in its IPO, with a face value of ₹10 per share and an issue price fixed at ₹100 per share. This brings the total issue size to ₹12 crore. The IPO opens on 13th May 2025 and will remain open for three days until 15th May 2025. It is a fixed price issue, and the shares will be listed on the NSE SME platform.

Key Dates and Lot Size:

• IPO Opening Date: 13th May 2025

• IPO Closing Date: 15th May 2025

• Allotment Date: 16th May 2025

• Refund Initiation: 19th May 2025

• Listing Date: 20th May 2025

• Lot Size: 1,200 shares

• Minimum Investment (Retail): ₹1,20,000

• Registrar: Link Intime India Private Limited

• Market Maker Portion: 67,200 shares

Retail investors are required to invest in a minimum of one lot, which consists of 1,200 shares, translating into a minimum investment of ₹1,20,000.

Grey Market Premium (GMP) Analysis

As of 13th May 2025, the GMP for the Integrity Infrabuild Developers IPO stands at ₹0. This suggests that the market expects the shares to list at the issue price of ₹100, without any premium or discount. The table below tracks the GMP trend over the past week, which has shown no activity or change in sentiment.

The absence of a GMP suggests a lack of enthusiasm from grey market investors. This trend is often considered an early indicator of expected listing performance, though it is not always definitive.

Objectives of the IPO

Integrity Infrabuild Developers Limited has outlined three key objectives for utilizing the proceeds from this IPO:

1. Meeting Working Capital Requirements: A portion of the funds will be allocated to manage day-to-day operational liquidity and ensure the smooth functioning of business processes.

2. General Corporate Purposes: This includes funding general administrative costs, business development activities, and other strategic initiatives.

3. Purchase of Machinery and Equipment: The company plans to upgrade its existing machinery to improve efficiency and expand its production capabilities.

Company Background and Market Position

Integrity Infrabuild Developers Limited operates in the infrastructure development sector, with a focus on construction, civil engineering, and related works. It has positioned itself as one of the growing moulding companies in India, contributing to the development of roads, bridges, and industrial structures.

The company has recently reported notable growth in both revenue and profitability. However, its market share remains limited in comparison to established players in the infrastructure and construction segment.

Financial Performance and Growth Indicators

The company’s financials for FY2023-24 reflect a strong year-over-year improvement, particularly in revenue and profitability.

Despite the positive revenue and PAT growth, the overall profit margin remains modest at 1.47%. This narrow margin reflects industry-wide pressures, particularly in competitive pricing, rising input costs, and regulatory compliance.

Technical and Valuation Analysis

The technical indicators for Integrity Infrabuild Developers reveal a mixed picture. While the Return on Net Worth (RoNW) and Return on Equity (ROE) stand strong at 30.60%, the Price-to-Earnings (PE) ratio appears high when compared to peers.

A PE ratio of 32.68 may appear overvalued in comparison to SME sector norms, indicating the IPO is priced aggressively. However, post-IPO PE drops to 16.60, bringing it closer to acceptable industry standards.

Expert Review and Market Sentiment

The IPO has received a largely negative outlook from brokers, analysts, and institutional investors. Although the financial growth is noteworthy, the high valuation and low GMP have led experts to recommend caution. Many believe that the issue is not attractively priced for long-term or short-term investors.

Some experts have explicitly advised retail investors to skip this IPO to protect their capital, especially when other IPOs with stronger fundamentals and better pricing are available in the market.

Risk Factors to Consider

• Aggressive Pricing: The high pre-IPO PE ratio raises concerns about overvaluation.

• Low Profitability: Although revenue has grown significantly, PAT margin remains thin.

• Zero GMP: A stagnant GMP reflects weak investor confidence and could hint at flat or negative listing performance.

• High Entry Barrier for Retail Investors: With a lot size requiring a ₹1.2 lakh investment, participation may be limited to high-net-worth retail investors.

Registrar and Investor Support

The IPO process is managed by Link Intime India Private Limited, which handles allotment and refund processes. Investors can visit the registrar’s website or contact the helpline for updates regarding allotment status and other queries.

• Website: https://linkintime.co.in/Initial_Offer/public-issues.html

• Contact: +91-22-4918 6270

Listing Expectations and Outlook

The tentative listing date for the shares is 20th May 2025 on the NSE SME platform. Given the current GMP of ₹0, the listing price is expected to remain at ₹100 per share. While a surprise uptrend is not ruled out, the prevailing indicators do not support substantial listing gains.

Conclusion

The Integrity Infrabuild Developers IPO represents a bold move by a mid-sized infrastructure company looking to scale operations. While the company has demonstrated strong revenue growth and improved profitability in FY24, concerns over its aggressive pricing, low profit margins, and lack of grey market interest make this IPO a cautious bet for retail and institutional investors.

Until market conditions shift or the company secures stronger institutional backing, it may be advisable for risk-averse investors to adopt a wait-and-watch strategy. However, investors with a long-term view and higher risk tolerance may still explore the IPO after carefully assessing the company’s execution capabilities and industry developments.

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