Total Issue Size: 43,00,200 shares

(aggregating up to ₹77.83 Cr)

Issue Type: Book Built Issue IPO

Listing Platform: NSE SME

Market Maker:  Badjate Stock And Shares Private Limited

Lead Manager: Kreo Capital Private Limited

Registrar: Bigshare Services Pvt Ltd

Promoters: Mr. Sunil Gyanchand RaisonI and Mr. Shreyas Sunil RaisonI, Shradha Infraprojects Limited and Riaan Diagnostic Private Limited 

Share Allocation Breakdown:

• QIB (Qualified Institutional Buyers): Up to 50% of the net issue

• Retail Investors: Up to 35% of the net issue

• Non-Institutional Investors (HNI): Up to 15% of the net issue

Share Holding Pre Issue: 99.99%

Share Holding Post Issue: 71.36%

IPO Timeline

Opening Date: Mar 21, 2025

Closing Date:Mar 25, 2025

Basis of Allotment: Mar 26, 2025

Refund Initiation: Mar 27, 2025 

Credit of Shares to Demat: Mar 27, 2025

Listing Date: Mar 28, 2025

Company Overview

Active Infrastructures Limited (AIL) operates primarily in two segments: Infrastructure Development and Commercial Construction.

• Infrastructure Development: AIL focuses on constructing critical infrastructure including roads, bridges, flyovers, irrigation systems, and water supply networks.

• Commercial Construction: The company is actively involved in developing office complexes, retail centers, exhibition halls, educational institutions, and various other commercial spaces.

Operating on a pan-India scale, AIL’s projects span several key states, including Maharashtra, Madhya Pradesh, Uttar Pradesh, and Tripura. The company prioritizes quality, safety, and customer satisfaction across its projects, leveraging its strong engineering capabilities, modern machinery, and skilled workforce. At the time of the offer document filing, AIL had 53 full-time employees along with 150–160 contractual staff across its project sites.

Objects of the Issue

Risk Factors

Investors should be mindful of several key risks associated with this IPO:

Geographic Concentration

AIL’s revenue is significantly concentrated in Maharashtra, Uttar Pradesh, and Madhya Pradesh. Economic or political disruptions in these regions could adversely affect the company’s financial performance.

Reliance on Government Contracts

A substantial portion of AIL’s business is driven by contracts awarded by government and government-owned entities. Changes in government policies, budget allocations, or political transitions could negatively impact future growth.

Competitive Bidding Environment

The company competes in a highly competitive bidding process. Failure to secure new contracts or win bids may lead to reduced revenue and impact cash flows.

Project Execution Challenges

The risk of construction delays, defects, or cost overruns remains inherent. Such challenges can result in additional costs or contractual liabilities, potentially harming the company’s reputation.

Regulatory Compliance

Compliance with numerous regulatory approvals and licenses is critical. Any delays or failure to secure these could disrupt operations and financial performance.

Material Supply Fluctuations

AIL is dependent on third-party suppliers for essential construction materials. Price volatility or supply disruptions can lead to increased project costs.

Municipal Regulations (FSI)

Changes in Floor Space Index (FSI) regulations could influence the feasibility and profitability of commercial construction projects.

Industry Competition

Both organized and unorganized competitors pose a threat, as they vie for projects based on pricing, quality, and timely execution.

Parent Company Influence

The holding company, Shradha Infraprojects Limited, is publicly listed. Fluctuations in its share price may indirectly influence investor sentiment towards AIL.

Market Landscape & Growth Drivers

India’s construction industry is witnessing robust growth due to both government initiatives and private investments. Key highlights include:

• Market Value: Currently valued at approximately USD 639 billion, the industry is anticipated to experience a CAGR of around 6%.

• Global Standing: India is the fourth-largest construction market globally and is on track to become the third-largest, potentially reaching USD 1.4 trillion by 2025.

• GDP Contribution: The sector contributes nearly 9% to India’s GDP.

Government Initiatives Fueling Infrastructure

Several government initiatives are set to drive further development:

• Enhanced Capital Expenditure: For FY24-25, the government allocated Rs 11.11 trillion (USD 133.9 billion) for capital expenditure, reflecting a 37% increase from the previous fiscal year.

• Focused Investments: There is a strong emphasis on transportation—particularly road, rail, and shipping—as well as energy and industrial infrastructure.

• Long-Term Investment Plans: With plans to invest approximately US$ 1.723 trillion in infrastructure from FY24 to FY30, the focus is on power, roads, and emerging sectors like renewable energy and electric vehicles.

• Global Partnerships: Collaborations, such as the India-Japan Coordination Forum for Northeast infrastructure development, underscore the momentum behind infrastructure investments.

Competitor Comparison

According to the offer document, the company listed AVP Infra and VL Infraprojects as their peers.

Competitive Strengths

Active Infrastructures Limited boasts several competitive advantages that position it favorably within a dynamic market:

Experienced Management Team

The company is led by a seasoned management team with over 25 years of combined industry experience. Guided by individual promoters Mr. Sunil and Mr. Shreyas Raisoni, along with corporate promoters Riaan Diagnostic Private Limited and Shradha Infraprojects Limited, AIL benefits from deep industry insights and robust operational oversight. This leadership is instrumental in driving strategic growth and maintaining operational excellence.

Quality Assurance and High Standards

AIL maintains a strong commitment to quality, ensuring that all infrastructure and commercial projects adhere to stringent standards. The company’s focus on quality not only enhances customer satisfaction but also builds a reputation for reliability in a highly competitive market. This dedication to excellence minimizes risks associated with construction defects and project delays.

Optimal Resource Utilization

The company is proactive in upgrading its operational processes, modernizing machinery, and continuously training its workforce. This approach ensures optimal utilization of resources, streamlines project execution, and helps in eliminating inefficiencies. Regular reviews and corrective measures further contribute to maintaining a competitive edge in project delivery.

Growing Order Book

In the construction industry, a robust order book is a key indicator of future revenue. AIL has consistently increased its order book, reflecting growing market confidence and demand for its services. The company’s strategic focus on projects with attractive margins and enhanced reputational value supports sustainable long-term growth.

Key Financial Information

For the reported periods, the company has posted PAT margins of 7.95% (FY22), 11.04% (FY23), 10.75% (FY24), and 16.49% (H1-FY25), along with RoCE margins of 0.09%, 14.84%, 14.90%, and 7.10% for the respective periods.

Conclusion: Is the Grand Continent Hotels IPO Worth the Risk?

AIL is actively involved in infrastructure and commercial construction projects, providing a diverse range of services. After establishing a solid foundation in FY23, the company has maintained relatively stable top and bottom lines for the past two fiscal years, with profits reflecting strong performance that supports its market valuation. However, the financial results from the first half suggest a slight decline in revenue, which may be a point for careful consideration. 

The small equity base following its IPO indicates that a longer timeline may be necessary for growth potential to materialize. Despite these factors and based on its recent impressive earnings, the company's offerings seem to be attractively positioned. Currently, AIL holds a robust order book of over Rs. 345 crore. Savvy investors might consider allocating moderate funds for the long term in this dividend-paying company, as it presents opportunities for future growth.

Investors considering participation in the IPO should review the company's financials and Active Infrastructures Limited IPO RHP thoroughly to make an informed decision. For more insights and detailed analysis, Whatsapp group, and visit www.stockknocks.com

DISCLAIMER

The information provided in this blog is for informational purposes only and should not be construed as investment advice. Readers are encouraged to conduct their own research and consult with financial advisors before making any Investment.