India needs to fully use its skills and entrepreneurial potential to achieve its dream of becoming a $10 trillion economy. In this transformation, small and medium-sized enterprises (SMEs) play a crucial part as growth drivers.
SME IPOs have performed well in 2024. As of June 13, 2024, there have been 100 issues worth ₹3,095 crores through the SME IPO platform compared to ₹4,686 crores raised from 182 issues in 2023.
This is the highest amount ever raised in the first half of any calendar year since the SME listing came into effect. Retail investors are excited about SME stocks because they have been performing well after listing. This excitement has been a big reason for robust fundraising in the SME segment.
One notable SME IPO that is making waves is Mason Infratech IPO.
About Mason Infratech
Mason Infratech is a leading real estate construction company specialising in new and redevelopment projects for residential and commercial buildings. They are also good at executing civil contracts apart from lifestyle projects and high-value standalone buildings.
Residential buildings, commercial structures, and corporate office buildings are among the end-to-end construction services that they offer. Also, they construct concrete or composite steel structures and provide mechanical, and electrical plumbing (MEP) services and finishing works.
Apart from that, they understand the unique needs of every project. Therefore, they offer made-to-order services to meet these demands. Included within their wide range of products are planning, procurement, design, construction and after-sales facilities for any customers’ post-construction needs.
Also read: Is real estate growth in India sustainable? Opportunities vs Challenges!
Mason Infratech IPO
Mason Infratech IPO, a fresh equity issue of 47.6 lakh shares, will help the company raise around ₹30.46 crores.
The Mason Infratech IPO date is June 24, 2024, with the closing date on June 26. Additionally, the shares of the company will be listed on the NSE SME Emerge Platform on July 1, 2024.
The price band of ₹62-₹64 per share has been specified in this case, though one must spend at least ₹1,28,000 to buy an IPO. The IPO lead manager is Expert Global Consultants, and its registrar is Kfin Technologies.
Retail investors take up 35% of the offer; QIB (Qualified institutional buyers) have 50%, while 15% remains for NII (Non-institutional investor) investors.
| IPO opening date | June 24, 2024 |
| Date of closure | June 26, 2024 |
| Face value | ₹10 |
| IPO price band | ₹62 – ₹64 |
| Lot size | 2,000 |
| Issue size | ₹30.46 crores |
| Fresh issue | ₹30.46 crores |
| Listing date | July 1, 2024 |
Source: Mason Infratech RHP
On June 25, 2024, the company’s shares were trading at par in the grey market, indicating that the Mason Infratech IPO’s GMP (Grey market premium) is currently zero.
Must read: What sets an SME IPO apart from a regular IPO?
Fund utilisation plan
The net proceeds from the IPO will be used by the company for:
- Working capital requirements and
- General corporate purposes
Source: Mason Infratech RHP
Mason Infratech financials
Here is a snapshot of the company’s key financial indicators:
| Financials (Amount in lakhs except per share data) | 9M FY24 | FY23 | FY22 |
| Revenue from operations | 5672.33 | 6380.93 | 3009.39 |
| Profit/loss | 509.01 | 337.01 | 152.11 |
| Basic EPS | 4.05 | 2.68 | 1.21 |
| Net worth | 1541.18 | 800.44 | 512.91 |
| Total borrowings | 1445.17 | 931.43 | 556.16 |
Source: Mason Infratech RHP
Mason Infratech – Investment considerations
Strengths
- The company’s focus includes understanding each client’s specific requirements and tailoring their services accordingly. They aim to create lasting partnerships with clients through personalised attention and clear communication channels.
They are dedicated to delivering projects that meet quality standards of the highest kind. For this purpose, they enforce strict measures for quality control, including using cutting-edge building technologies and materials.
- They excel in construction, offering a range of specialised concrete solutions. By leveraging diverse technological options, they streamline project timelines, aligning with their commitment to efficient and precise project delivery in today’s dynamic construction industry.
Weaknesses
- The company’s order book is filled with specific clients, which makes revenues highly concentrated. As of March 31, 2024, the top five customers’ projects account for 80.60% of the company’s order book. This means that it cannot be guaranteed that these same clients will continue to place project orders at the historical levels.
Additionally, there may be a loss of clients/customers, impacting the company’s ability to get new clients. External issues, including market adverse conditions, cash flow problems, and regulatory challenges can impact the company’s operations.
- The company weighs its reliance on manpower, which relies on a pool of subcontracted labourers at project locations. It follows that if there is any labour scarcity or shortage, work stoppages/strikes, alterations in laws affecting contract labour or increased wage claims may have dreadful outcomes on their cash flows and operating results.
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Bottomline
In conclusion, Mason Infratech stands out in terms of its upcoming IPO. The company provides a high-quality individualised construction service using advanced technology systems available today.
However, its revenue dependence upon few customers and the use of sub-contractual labour also present significant risks. Overall, strong performance by SMEs is a good sign towards India’s economic growth.
