Shivalaya Construction Limited IPO

01At a glance

What the company does — infrastructure EPC focused on roads, highways and bridges, with 41 projects executed across 19 states and union territories by July 2025; it works on EPC contracts and develops roads under HAM (DRHP p.27).

Who pays it — government entities, 95.80% of FY25 revenue; the "Nodal Authority" held 56.82% of the order book at July 2025 (DRHP p.44). HAM projects were 81.19% of the order book at March 2025 (DRHP p.46).

Why it is raising money — ₹3,400.00 million to repay borrowings, and the rest for general purposes (DRHP p.28).

How fast it has grown — revenue of ₹27,315 million in FY23, ₹35,376 million in FY24 and ₹31,245 million in FY25 (DRHP p.160).

The one thing to understand — a contractor in a squeeze between a shrinking book and rising debt. The order book fell from ₹65,922 million in FY23 to ₹28,359 million in FY25, while HAM projects tied up cash: operating cash flow was negative in FY24 and FY25 and net debt rose to 3.05 times EBITDA (DRHP p.160, DRHP p.389).

02The business, in plain words

A road contractor wins government highway contracts; under HAM it also finances part of the construction through project companies and is repaid by the authority over years, so it needs debt and equity up front.

A highway authority awards a HAM road project → Shivalaya's project company builds it, funding part of the cost with loans → the authority pays over the construction and annuity periods → the company earns construction margin and annuity income.

Earnings equation: Profit ≈ construction revenue × margin + annuity income − interest. EBITDA margin was 24.84% in FY25 (DRHP p.160).

03Where the money comes from

Source: DRHP p.44, DRHP p.46, DRHP p.160. The HAM shares are 100% minus the EPC shares given (our arithmetic, DRHP p.46). The order book was ₹36,269.90 million at July 2025 (DRHP p.44).

04The growth record

Source: DRHP p.160, DRHP p.389.

05What the growth is made of

Shrinking. Revenue fell 11.7% and profit 40.1% in FY25 as the order book was worked down and not replaced (our arithmetic, DRHP p.160). Finance costs rose from ₹2,040.54 million in FY24 to ₹3,393.36 million in FY25 (DRHP p.389, DRHP p.390).

06Earnings quality

Over FY23 to FY25 operating cash flow was negative ₹15,052.57 million against profit of ₹14,825.22 million (our arithmetic, DRHP p.160, DRHP p.389). Working-capital items, including contract assets, absorbed the cash (DRHP p.389, DRHP p.390). Net debt rose from ₹2,577.16 million in FY23 to ₹23,681.36 million in FY25 (DRHP p.160).

07The balance sheet

Source: DRHP p.160.

08What the money is for

Source: DRHP p.28. A pre-IPO placement of up to ₹900 million may be made before the RHP (DRHP p.28).

09Who is selling

Source: DRHP p.28, DRHP p.29. The shares offered are 5.27% of the company's equity (our arithmetic).

10Promoters

The promoters are Shripal Aggarwal, Pradeep Nandal, Sumitra Nandal, Sahil Aggarwal and Sumit Nandal, who hold 92.43%; the promoter group holds the rest (DRHP p.27, DRHP p.29). One criminal case involves promoters Sahil Aggarwal and Sumit Nandal, and one regulatory action involves Pradeep Nandal (DRHP p.31).

11Who already owns it

Source: DRHP p.29. The fourth row is our arithmetic.

12What changed just before the IPO

• Revenue and profit — both fell in FY25 (DRHP p.160).
• Order book — down 28% in FY25 before recovering to ₹36,270 million by July (our arithmetic, DRHP p.44, DRHP p.160).
• Debt — net debt doubled in FY25 (DRHP p.160).

13Capacity and expansion

Capacity is bidding and financing capacity. The proceeds repay debt (DRHP p.28).

14Market size and industry structure

The CARE report cited in the offer document expects India's infrastructure sector to grow about 8% a year from 2024 to 2030 and about ₹15,500 billion to be invested in national highways from FY2025 to FY2028 (DRHP p.27). Those projections are CARE's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• A national footprint — projects in 19 states and union territories (DRHP p.27).
• Margins above listed peers such as GR Infraprojects and HG Infra in FY25 (DRHP p.162).

Against that: dependence on government and one nodal authority, the cash demands of HAM, a falling order book and rising debt (DRHP p.44, DRHP p.160).

16Peers the company named

The peer set — G R Infraprojects, H.G. Infra Engineering, KNR Constructions, PNC Infratech, Ceigall India and Dilip Buildcon — has P/E ratios from 3.15 to 14.89, average 9.61; the KPI comparison shows GR Infraprojects (FY25 revenue ₹73,947.04 million, EBITDA margin 22.13%) and HG Infra Engineering (₹50,561.82 million, 20.90%) (DRHP p.159, DRHP p.162).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Government. 96% of revenue (DRHP p.44).
• HAM. Four-fifths of the order book, funded partly by debt (DRHP p.46).
• Cash. ₹9.4 billion operating outflow in FY25 (DRHP p.389).
• Order book. Less than one year's revenue at March 2025 (DRHP p.160).
• Debt. Net debt three times EBITDA (DRHP p.160).

18Litigation and regulatory matters

Source: DRHP p.31.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Who the "Nodal Authority" is, in the pages read.
• What the subsidiaries' claims of ₹2,731.53 million are for, in the pages read.
• How much equity the HAM project companies still need, in the pages read.
• What the criminal case against two promoters concerns, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why did the order book fall by more than half in two years?
2. When will HAM annuities start to bring cash back?
3. How much debt will remain after the ₹3,400 million repayment?
4. What are the ₹2.7 billion of claims made by subsidiaries?
5. What is the criminal case involving Sahil Aggarwal and Sumit Nandal?

1Sources and cited facts

This study was read from 1 document the company filed. The 21 figures it cites are listed under the document each came from, with the page and the sentence as printed.