Vinod Kumar Agarwal, Managing Director, GR Infraprojects, is all smiles as the company receives SEBI´s approval to raise funds through an IPO. The company filed IPO papers with SEBI on September 29, 2016, following which, the capital markets regulator issued its final observations on the draft offer documents on December 22. The issue will be managed by ICICI Securities, Motilal Oswal, HDFC Securities, IDFC Securities and SBI Capital Markets. As reported, proceeds of the IPO would be utilised towards purchase of equipment for the company´s EPC business, to retire debt and other general corporate purposes. As was reported in September 2016, the company was planning to raise about Rs 400 crore through an IPO to fund its growth and provide an exit route to some investors. The Narendra Modi Government coming into power has worked wonders for the 50-year-old Udaipur-based company. As Agarwal had shared with CW in mid-2016, the company´s order book in 2015 in EPC increased by Rs 5,000 crore; its construction turnover for 2015-16 was at around Rs 1,900 crore, and 25 per cent growth is the target for 2016-17.
Emergence of Integrated MEP business are basically encouraging small contractors as because in most of the cases the major equipments are bought by the developers (employer/client) and being given to the MEP contractors to erect or install. This type of projects are not suitable for large contractors as only erection sort of a job is left to be done which doesnt attract more much desired profits compared to the manpower investment. Also, from client/employer's point of view if they buy the major equipments themselves by taking engineering/technical help from consultants it will save them atleast 10 to 15% of value on each equiipments which the contractor might have costed for that particular project. Due to this reason MEP business is a big failure in eastern part of the country. But yes, Indian HVAC industry has a great future ahead.