Vision Infra Equipment Solutions Ltd. (VIESL) is making waves in the equipment rental and refurbishment sector, providing crucial services to industries like airports, smart cities, irrigation, building construction, mining, and railways. As a versatile player, VIESL offers a broad portfolio of services that includes renting road construction equipment and trading as well as refurbishing these machines. The company’s offerings streamline operations, boost efficiency, and help control costs—an attractive combination for companies involved in large-scale infrastructure projects.
VIESL’s rental services are designed with flexibility in mind, catering to the varying needs of infrastructure companies. The company offers two rental models:
1. Time-Based Pricing: This model allows customers to pay a fixed fee based on how long they use the equipment. It's popular in the infrastructure industry, especially for projects like road paving where usage time is predictable.
2. Output-Based Pricing: Here, customers pay based on the results delivered by the equipment, such as the volume of road milled or crushed. This performance-based approach aligns costs with outcomes, offering clients a value-driven option.
The company’s extensive fleet features leading brands like Wirtgen, Komatsu, Caterpillar (NYSE:CAT), and Volvo. VIESL rents out this equipment to major infrastructure firms such as Larsen & Toubro, Ashoka Buildcon Ltd., and Tata Projects Ltd., among others. The rental service allows clients to access the latest technology without the burden of ownership, offering a flexible solution for project needs. As of March 31, 2024, VIESL owned 395 pieces of road construction equipment and served 133 clients, up from 95 in FY 2022. The company also employs a total workforce of 990, with a mix of permanent and contractual staff.
VIESL is preparing for its initial public offering (IPO) to raise INR 106.21 crore. The IPO will be conducted via the book-building route, offering 6.51 million equity shares at a price band of INR 155-163 per share. The subscription window opens on September 6, 2024, and closes on September 10, 2024. The funds raised will be allocated towards capital expenditure (INR 46.81 crore), working capital (INR 36.50 crore), and general corporate expenses.
Financially, VIESL has posted steady revenue figures, with a significant increase in net profit in FY24, driven by higher other income. For FY24, the company reported a total income of INR 349.66 crore and a net profit of INR 26.69 crore. While its revenue growth has been stable, the recent jump in profitability suggests the company is on a solid footing.
For potential investors, VIESL offers exposure to the infrastructure equipment sector, a vital component of India’s growth story. However, the IPO appears fully priced, and while the company shows promise, especially with its recent profit surge, investors may want to consider a long-term perspective. With its growing client base, diverse rental models, and expanding fleet, Vision Infra Equipment Solutions Ltd. is positioning itself as a key player in the infrastructure equipment space.
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