Mason Infratech
- Mason Infratech is coming out with initial public offering (IPO) of 47,60,000 shares of Rs 10 each in a price band Rs 62-64 per equity share.
- The issue will open for subscription on June 24, 2024 and will close on June 26, 2024.
- The shares will be listed on NSE Emerge Platform.
- The face value of the share is Rs 10 and is priced 6.20 times of its face value on the lower side and 6.40 times on the higher side.
- Book running lead manager to the issue is Expert Global Consultants.
- Compliance Officer for the issue is Ravi Tiwari.
Profile of the company
Mason Infratech is real estate construction company providing construction services for Residential as well as Commercial buildings of new and redevelopment projects. It specializes in executing civil contracts. It is also working on lifestyle projects and high-value standalone buildings. Its team is well-versed in the latest industry practices, ensuring that it remains up to date with the technological advancements in construction. It understands the unique requirements of each project and tailors its services accordingly. Its comprehensive suite of offerings covers the entire project lifecycle, including planning, designing, procurement, construction, and post-construction services. It provides end-to-end construction services for residential buildings (Residential), corporate office buildings and buildings for commercial purposes (collectively, Commercial). Its capabilities include constructing concrete building structures as well as composite steel structures. It also provides mechanical, electrical, and plumbing (MEP) and finishing works.
The company’s primary operational focus lies within the Mumbai Metropolitan Region (MMR). As a construction Company, it is establishing long-term partnerships with its clients. It leverages its technical expertise, staying up to date with the industry trends and best practices. Its team of professionals is skilled in implementing solutions that address the challenges of each project. It strives for continuous improvement in every aspect of its operations, from project planning and execution to quality control and safety measures. By maintaining a high standard of workmanship, it ensures that its clients receive desired outcomes. It is committed to fulfil its client expectations, embracing new technologies.
Proceed is being used for:
- Meeting the working capital requirements.
- General corporate purposes.
Industry overview
The real estate sector is one of the most globally recognized sectors. It comprises of four sub-sectors -housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect, and induced effects in all sectors of the economy. In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It was also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. Bengaluru was expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun.
By 2040, real estate market will grow to Rs 65,000 crore ($9.30 billion) from Rs 12,000 crore ($1.72 billion) in 2019. Real estate sector in India is expected to reach $1 trillion in market size by 2030, up from $200 billion in 2021 and contribute 13% to the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for India's growing needs. India’s real estate sector is expected to expand to $5.8 trillion by 2047, contributing 15.5% to the GDP from an existing share of 7.3%. In FY23, India’s residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore ($42 billion), marking a robust 48% year-on-year increase. The volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095 units sold.
Pros and strengths
Customer-Centric Approach: The company focuses on understanding the specific requirements of each client and tailoring its services accordingly. Through personalized attention and clear communication channels, the company aims to build enduring partnerships with clients. Its commitment is to deliver projects meeting the required standards of quality. The company implements strict quality control measures and utilizes construction technologies and materials to ensure that every project meets or surpasses client expectations.
Ownership of modern system formworks and other Core Assets: The company’s construction capabilities involve the use of various technologies, such as temperature-controlled concrete for large-scale pours, self-compacting free-flow concrete for heavily reinforced structures, and specialized concrete for vertical pumping in skyscrapers and high-rise buildings. In project execution, it relies on core assets like formwork, tower cranes, passenger and material hoists, concrete pumps, threading and forging machinery, as well as cutting and bending machines. Additionally, it uses rack and pinion lift externals to enhance project efficiency. Ownership of diverse system formwork further sets it apart, including automatic climbing system formwork, aluminium formwork, table formwork, and composite panel formwork with both vertical and horizontal systems. This range allows it to tailor its approach to the specific construction requirements of different building types. The completion of each building, irrespective of its nature, requires a high level of skill, scalability, and speed.
Optimal Utilization of Resources: The company consistently works on enhancing its service process and plans to enhance its procurement process to optimize resource utilization. It has allocated significant resources and intends to further invest in its existing Supplier Relationship, Experienced Management Team, Existing Client Base, Optimal Utilization of Resources activities to develop customized systems and processes for effective management control. It regularly reviews its existing policies for operations of the company to identify the areas of bottlenecks, aiding in improved efficiency and optimal resource utilization.
Risks and concerns
The company’s primary operational focus lies within Mumbai Metropolitan Region: The company’s primary operational focus lies within the Mumbai Metropolitan Region (MMR), which poses a significant risk to its business. While the MMR offers numerous opportunities for growth and development, it also exposes it to various challenges and uncertainties. The performance and stability of its business are heavily dependent on the economic conditions within the MMR. Fluctuations in the local economy, such as changes in GDP growth, inflation rates, or consumer spending patterns, can impact the demand for construction projects. Economic downturns or recessions in the region could lead to reduced project opportunities and lower revenue generation. The construction industry is subject to a range of governmental regulations and policies. Changes in regulations, permits, licensing requirements, or zoning laws can significantly impact its operations. New regulations or delays in obtaining necessary approvals can disrupt project timelines, increase costs, and hinder its ability to execute projects successfully.
Business is manpower intensive: The company’s business is manpower intensive, and it is dependent on the availability of a sufficient pool of the labours from its sub-contractors to execute its construction projects. The number of contract labourers employed by it varies from time to time based on the nature and extent of work contracted to it and the availability of the labours. It may not be able to secure the required number of contractual labourers required for the timely execution of its projects for different reasons including possibility of disputes with sub-contractors, strikes, less competitive rates to its sub-contractors as compared to its competitors or changes in labour regulations that may limit availability of the labours. It is subject to laws and regulations relating to employee welfare and benefits such as minimum wage, working conditions, employee insurance, and other such employee benefits and any changes to existing labour legislations, including upward revision of wages required by such state governments to be paid to such contract labourers, limitations on the number of hours of work or provision of improved facilities, such as food or safety equipment, may adversely affect its business and results of its operations.
Do not have long-term agreements with suppliers for raw materials: The company offers the Service of Lock and Key as well as RCC (Reinforced Cement Concrete) services. In certain projects, it is necessary to supply the raw materials, either by it or by the contractor involved. In certain projects, it relies on the availability of raw materials to remain competitive and maintain cost effectiveness. However, its dependence on a few third-party suppliers for raw materials introduces risks to its business. The discontinuation of production or supply by these suppliers, their failure to adhere to delivery schedules or provide the required quality or quantity, can adversely affect its schedules and overall operations. This dependency also poses challenges in obtaining key materials at reasonable prices, impacting its profit margins and overall financial condition.
Outlook
Incorporated in 2020, Mason Infratech is a real estate construction company that provides construction services for both residential and commercial buildings, including new and redevelopment projects. The company offers comprehensive construction services for residential, corporate, and commercial buildings. The company mainly operates in the Mumbai Metropolitan Area. The company is young, but the management carries several years of experience in the infrastructure business throughout India. They have extensive expertise in the field of building Residential and Commercial Projects. It uses specialised formwork technologies, including vertical composite panel system for columns, horizontal composite panel system for slabs, crane enabled composite table formwork, aluminium composite panel formwork and automatic climbing system formwork. On the concern side, the company's work may be hindered during the monsoon season when starting construction due to the impact on the foundation and plinth until reaching the ground floor slab. This not only affects the allocation of more resources and working capital but also results in less work being done. Besides, the company cannot assure that its future project development initiatives will be successful or be completed within the anticipated period or budget, or that its newly developed or improvised projects will achieve wide market acceptance from its customers.
The company is coming out with an IPO of 47,60,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 62-64 per equity share. The aggregate size of the offer is around Rs 29.51 crore to Rs 30.46 crore based on lower and upper price band respectively. On performance front, the company's revenue from operations for the financial year 2022-23 is Rs 6,380.93 lakh. This represents Rs 3,371.53 lakh or 112.03% increase compared to the previous financial year's revenue from operations of Rs 3,009.39 lakh. Profit after Tax (PAT) saw a significant upswing, climbing to Rs 337.01 lakh in FY23 from Rs 152.11 lakh in FY22. Meanwhile, as a real estate construction contractor, the company’s primary focus is on the construction of high-rise and skyscraper buildings. Constructing such structures demands precision, innovation, and a deep understanding of structural dynamics. The process involves selecting materials like high-strength concrete, advanced steel alloys, cutting-edge facade materials, aluminium form shuttering, MS safety screens, and specialized tools.
