Globe Civil Projects – IPO of a mid-size EPC firm

24 Jun 2025 , 11:51 AM

Globe Civil Projects is a New Delhi based EPC firm with a 20 year operational history. It executes projects across residential, commercial and industrial segments. While being a smaller player, it has shown consistent growth and improving profitability in the recent past. The IPO is aimed at strengthening its balance sheet and funding capex.

Offer Details of the IPO

The IPO consists of

• Fresh Issue: A total of upto 16,760,560 equity shares of face value of ₹10 each, aggregating to INR 1190 m.
• There is no offer for sale and all the proceeds would go to the company.
• Price Bank: The company has determined a price band of Rs. 387 to Rs. 414 per Equity Share that has been arrived via a reverse book building process.
• BRLM: Mefcom Capital Markets Limited is the BRLM for the issue.

Objectives of the IPO:

Strengthening the balance sheet is the purpose. Bulk of the proceeds are towards working capital financing. Some of them are for capital expenditures. Here are more details:

Working Capital Financing Requirements

INR 750.00 million of the proceeds will be utilized for meeting upcoming working capital requirements of the company.

Capital Expenditures

INR 142.55 million for capital expenditure related to construction equipment/machinery.

Indian Construction Industry – An overview

The modern Indian construction industry derived its origin after independence in 1947, when the government initiated a series of five-year plans for infrastructure development for economic growth. The industry has shifted from a sector that was predominantly government-driven, to one that is increasingly influenced by the private sector, and has seen the arrival of both foreign and private-owned banks. Advancements in technology, such as pre-engineering building systems and environmentally friendly construction, have also changed the industry.

End Customers:

The Indian building market caters to a broad spectrum of the following customers:

• Government: The government is also an important client for the construction industry, several ministries and departments are executing infrastructural projects.
• Developers: Real estate and infrastructure companies are among the biggest customers for the industry as they are private developers.
• Industrial Customers: Industrial firms like manufacturers and logistic service providers also need EPC.
• Private customers: Private customers have been an important customer segment of the industry and many have engaged residential construction services.

Market Segments

The Indian construction industry can be broadly segmented into:

• Residential Building: This sector involves the construction of housing buildings - apartments, houses.
• Commercial Construction: This category involves construction operations for office buildings, shopping centres, and other commercial buildings.
• Industrial Construction: This construction industry segment involves builds of factories, warehouses, and other industrial structures.
• Infrastructure Building: This category includes building of roads, bridges, highways, etc.

Other Important Details

• The government has announced various initiatives to accelerate the construction industry, such as National Infrastructure Pipeline and Smart Cities Mission.
• Technological Innovation: There has been numerous technology improvements in the sector such as prefabricated steel structures, green construction methods, and BIM (building information modelling).
• Sustainability: Sustainability is increasingly being focused on in the construction industry, and a number of companies are using green construction methods and sustainable building materials.

Overall, the Indian construction industry is a complex and dynamic sector, driven by changing government policies, technological advancements, and shifting market demands. Understanding the industry’s history, evolution, customers, market segments, and other important details is essential for investors to navigate this sector.

Market size and Growth

Construction is a major industry in India and it makes a considerable contribution to the national Gross Value Added (GVA) at around 9.1% in FY 2025. The output value of the industry increased with a CAGR of 6.7% during FY 2018-23, with the overall output of the construction sector valued at approximately INR 36,621 billion in FY 2023.

Size and Growth of Sub-Segments

The construction industry can be broadly divided into two categories: residential and non-residential. The non-residential segment, which includes road, bridge, and institutional construction, accounts for around 82% of the total output value, and the residential segment accounts for the remaining 18%.

The non-residential segment is likely to remain the growth engine of the industry, with the government’s focus on infrastructure development and increasing budgetary allocation for roads, railways, and urban infrastructure.

Key Driving Factors

There are various factors contributing to the growth of the Construction market in India:

• Government’s attention on Infrastructure Development: The government’s focus on infrastructure development, such as the National Infrastructure Pipeline (NIP) and PM Gati Shakti program, is anticipated to stimulate industry growth.
• Increasing Allocation in Budget: The government’s increasing budgetary allocation for infrastructure segments, including roads, railways, and urban infrastructure, is expected to boost the growth of the industry.
• Increasing Housing Demand: Rising demand for affordable housing is projected to drive the industry’s residential segment.
• Increased Private Sector Involvement: The government’s efforts to promote private sector participation in infrastructure development, particularly through PPPs, will also contribute to growth in the industry.

The Indian construction industry as a whole is likely to expand further, supported by the government’s focus, rise in budget allocation, and demand for housing and infrastructure.

An Overview of Globe Civil Projects Limited

Background and History

Globe Civil Projects Limited, a leading Indian construction company, has a rich history dating back to 2002. The company was founded by Ved Prakash Khurana, Nipun Khurana, and Vipul Khurana, who shared a vision to provide high-quality construction services to various sectors. Over the years, the company has evolved and grown, expanding its services to cater to the increasing demands of the construction industry.

Segments and Products/Services

Globe Civil Projects Limited operates in two primary segments: Construction Project Receipts and Trading of Goods.

• Construction Project Receipts: This segment accounts for the majority of the company’s revenue and includes the construction of buildings, roads, bridges, and other infrastructure projects. The company has expertise in executing projects across various sectors, including education, healthcare, and commercial.
• Trading of Goods: This segment involves the trading of goods, primarily TMT steel, which is used in the construction industry. The company sources TMT steel from various suppliers and sells it to construction companies, traders, and other end-users.

Geographical Presence

Globe Civil Projects Limited has a strong presence in India, with operations in multiple states, including Uttar Pradesh, Haryana, Delhi, Maharashtra, Andhra Pradesh, Karnataka, Gujarat, Chhattisgarh, Rajasthan, Uttarakhand, and Himachal Pradesh. The company has a strong network of suppliers, vendors, and subcontractors across the country, enabling it to access a diverse pool of resources.

Key Strengths

Some of the key strengths of Globe Civil Projects Limited include:

• Strong Project Management and Execution Capabilities: The company has a proven track record of successfully executing complex construction projects.
• Experienced Promoters and Management Team: The company’s promoters and management team have extensive experience in the construction industry.
• Growing Order Book and Higher Pre-Qualification Credentials: The company’s order book has been growing steadily, and it has higher pre-qualification credentials, enabling it to bid for larger and more complex projects.

Overall, Globe Civil Projects Limited is a leading construction company in India, with a strong presence in multiple states and a diverse range of products and services. The company’s experienced promoters and management team, combined with its strong project management and execution capabilities, make it a formidable player in the construction industry.

Competitive Landscape

The business faces intense competition with many large competitors. The key competitors include:

• PSP Projects Limited: The company is one of the leading construction companies in India with a focus on construction and development of industrial, institutional, residential, social, and commercial infrastructure.
• Ahluwalia Contracts India Limited: A reputed construction company operating in all over India.
• L. Kashyap and Sons Limited: It is a leading construction and infrastructure company in the country and known for timely execution of projects.
• Ceigall India Limited: An infrastructure company, mainly involved in road and highways constructions.
• Capactie Infraprojects Limited: An EPC company with a significant footprint in the real estate and infrastructure sectors.

Competitive Positioning

The company’s competitive position can be summarized as follows:

• Strengths:
• Proven project management and delivery skills

Globe Civil Projects Limited has attained a proven history of delivery across a range of construction works over the last twenty years. The Company has successfully delivered 37 projects and currently has 13 projects underway, proving its talent in handling and completing large, complex projects.

• Strong management team with a history of success

Promoters and Directors of the company have an overall 19 years of experience in the construction industry which helps the company to grow swiftly. The in-house engineer and designer team has a rich experience in all construction-related activities and is a contributing factor to our strength.

• Variety of projects in different industries

Globe Civil Projects Limited’s Order Book comprises the expected value of the construction projects not yet completed under existing contracts and funded construction project receipts, which is an indicator of the level of future revenue for Globe Civil Projects Limited. The Order Book of the company has improved substantially, and so have the pre-qualification credentials, which are well-supported by the excellent execution of the projects and financial performance.

• Weaknesses
• Smaller Scale than many competitors. Intensely competitive industry.

The Indian construction industry is intensely competitive, with several dominant players and new entrants vying for a share of the market. Globe Civil Projects Limited also competes with other larger competitors who have a greater financial capacity and reputation to secure new work and protect market share.

• Opportunities:
• Increasing investment in infrastructure and construction jobs in India
  Industry is progressively concentrating on quality and timely completion
  Growth opportunities in other industries and territories
• Threats:

·         Reliance on Government Infrastructure Works

The company’s business is vulnerable to changes in government policies, budget payouts, and bureaucratic hurdles that can delay government infrastructure projects. Such reliance on government projects exposes the company to external variables which are outside of its remit.

• Variations in the prices of raw materials and labor costs
• Economic and political factors that impact the industry

Financial Performance

Revenue: A traditional growth story.

The company’s revenue from operations has grown at a Compound Annual Growth Rate (CAGR) of 7.53% from ₹2,857.09 million in Fiscal 2022 to ₹3,321.62 million in Fiscal 2024. This increase has been due to the company growing its business in new markets, and diversifying its project line to include more high-margin projects. The ability to win fresh orders, especially in the infrastructure and non-infrastructure segments, has been the key driver for its topline. Added to that, more high-margin jobs on the contracted side of the business have put the company on a better profitability situation.

Profits: A Mixed Bag

Profit after tax (PAT) has risen from ₹52.01 million in Fiscal 2022 to ₹153.78 million in Fiscal 2024, depicting a strong growth.

Figure: Financial Summary

(in INR Millions)	Period Ending 31st March 2022	Period Ending 31st March 2023	Period Ending 31st March 2024	Period Ending 31st December 2024
Revenue from Operations	2857.09	2333.45	3321.62	2546.57
EBITDA	229.1	207.98	445.52	392.98
Profit After Tax (PAT)	52.01	48.51	153.78	177.89

Source: RHP

 

Figure: Comparison of Financials and Valuation

Company Name	Total Income (INR m)	P/E Ratio (x)	EPS (Diluted) (INR)	NAV per Equity Share (INR)
Globe Civil Projects Private Limited	3348.1	19.8	3.6	18.1
B L Kashyap and Sons Limited	12567.7	29.6	2.3	22.0
Ceigall India Limited	30661.9	12.9	19.4	57.7
PSP Projects Limited	25300.1	20.4	34.2	222.5
Capacit’e Infraprojects Limited	19636.5	20.6	16.1	179.3
Ahluwalia Contracts (India) Limited	38919.4	16.4	56.0	238.8

Source: RHP