Annu Projects IPO: Diversified Utilities-Infrastructure EPC Player Taps the Market – Should You Subscribe?

At a Glance

Company and its Business Operations

Annu Projects Limited, originally incorporated as Annu Infra Construct (India) Private Limited on June 19, 2003 (later renamed Annu Projects Private Limited), was converted into a public limited company in June 2024. It is headquartered at Vasant Kunj, South Delhi, New Delhi. The company is an engineering, procurement and Construction (EPC) player specialising in the design, development, implementation, operation and maintenance of overhead and underground utilities infrastructure, with more than 90 per cent of revenue drawn from its telecom infrastructure and sewerage infrastructure verticals, alongside gas pipeline and an emerging Railway-signalling vertical. Core services span telecom towers and optical-fibre cabling, sewerage pipe-laying, treatment plants and pumping stations, and MDPE gas-distribution networks. Marquee customers include Bharat Sanchar Nigam Limited, Bharat Broadband Network Limited, G R Infraprojects Limited, Indraprastha Gas Limited, Gujarat Gas Limited and GAIL (India) Limited. As on June 30, 2026, it was executing 23 ongoing projects, which are 4 telecom, 14 sewerage, 4 gas pipeline and 1 railway-signalling — having grown revenue at a 25.16 per cent CAGR between Fiscal 2024 and Fiscal 2026.

Industry Outlook

Annu Projects operates across three government-anchored utilities-EPC segments, and the CARE (CareEdge Research) industry report cited in the RHP frames the opportunity in India-specific terms. The company's largest vertical, sewerage, maps to India's water and wastewater management market, valued at Rs 256.20 billion in FY26 and projected to reach Rs 378.10 billion by FY30E at a 10.20 per cent CAGR — the effective TAM for the core business. The telecom vertical rides a sector expected to grow at an 8 to 9 per cent CAGR over the next three years, with the broadband subscriber base having expanded at a 6.43 per cent CAGR from 743.20 million in March 2020 to 1,080.15 million in May 2026. The gas vertical is supported by City Gas Distribution expansion, with PNGRB having authorised 307 geographical areas. Three structural demand drivers stand out: BharatNet Phase-III under Digital India (telecom fibre to all gram panchayats); acute urban water stress and sanitation deficits — NITI Aayog estimates roughly 50 per cent of the population faces high-to-extreme water shortage (sewerage); and the national CGD network build-out (gas). Global figures are not separately quantified as the report is India-centric.

Objects of the Issue

• The issue is a 100 per cent Fresh Issue aggregating up to Rs 175.06 crore (1,76,83,000 equity shares); there is no offer-for-sale component.
• Funding capital expenditure for purchase of machinery/equipment: Rs 15.41 crore
• Funding working capital requirements of the company: Rs 115.00 crore
• General corporate purposes: residual (unallocated balance of net proceeds)
• Purpose: the proceeds are directed at working-capital funding, growth capex and general corporate purposes. As the entire issue is fresh, the company receives the full proceeds; there is no exit for existing shareholders.

SWOT Analysis

Strengths

• Strong growth and returns: revenue CAGR of 25.16 per cent (FY24–FY26), with FY26 RoNW of 21.27 per cent and RoCE of 22.66 per cent.
• Order Book of Rs 1,005.06 crore as on June 30, 2026 — about 4.17x FY26 revenue — anchored by a BharatNet Phase-III consortium mandate alongside G R Infraprojects.
• Diversified four-vertical model (telecom, sewerage, gas, railway signalling) with blue-chip customers (BSNL, BBNL, IGL, Gujarat Gas, GAIL).

Weaknesses

• Negative operating cash flow — CFO of Rs -0.25 crore in FY26 and Rs -35.38 crore in FY25 — despite rising profits, signalling weak cash conversion.
• Trade receivables nearly tripled to Rs 156.77 crore in FY26 from Rs 58.04 crore in FY24, with receivable days rising from 138 to 237.
• Total borrowings rose about 167 per cent over two years to Rs 52.54 crore, lifting debt-to-equity to 0.34.
• High concentration: over 90.00 per cent of revenue from two verticals and 57.09 per cent from government customers, with more than 70.00 per cent from a few states.

Opportunities

• Sewerage TAM expanding to Rs 378.10 billion by FY30E at a 10.20 per cent CAGR.
• BharatNet Phase-III pipeline (16 packages bid via the BSNL RFP) plus CGD roll-out across 307 authorised geographical areas.
• Railway signalling as a new fourth growth leg beyond the three core segments.

Threats

• Competitive, tender-driven bidding against Bondada Engineering, EMS, Likhitha Infrastructure and Suyog Telematics keeps pricing pressured.
• Government payment cycles directly stretch the receivables cycle and cash flow.
• Dependence on third-party supply of optical-fibre cable, TMT steel and cement exposes margins to input-cost and sourcing risk.

Financial Performance

All figures in Rs crore. Margins in per cent. Source: RHP (Restated Consolidated Financials).

(a) Profit & Loss

 
(b) Balance Sheet

(c) Working Capital & Cash Flow

Peer Comparison

Outlook & Relative Valuation

Avoid. At 14.33x FY26 earnings at the upper price band, Annu Projects is valued at a discount to all its listed peers, which trade at P/E multiples of 16.11x–24.65x. The company also has a healthy EBITDA margin of around 20.81 per cent and a strong RoNW of 21.27 per cent, the second-highest among its peers after Bondada Engineering. Its long-term prospects remain constructive, supported by growth in India’s water, sewerage, telecom and city gas distribution infrastructure, while the order book of Rs 1,005.06 crore, equivalent to around 4.17x FY26 revenue, provides good revenue visibility. The fresh issue proceeds are expected to support working capital and enhance execution capacity. However, weak operating cash flows, elevated receivables and working-capital requirements remain key concerns. While the pre-issue valuation appears reasonable, the post-issue P/E of around 19.64x offers limited valuation comfort as it moves closer to the peer range. Hence, we recommend investors to avoid the issue from a listing-gains perspective and wait for better entry opportunities after listing.