Weak debut on exchanges

Annu Projects, the New Delhi-based engineering, procurement and construction (EPC) company, made a lacklustre stock market debut on Wednesday, September 2, listing at a discount of up to 27 per cent to its IPO price. On the National Stock Exchange, the shares opened at ₹72, a 27.27 per cent discount to the issue price of ₹99, while on the BSE they listed at ₹75, a 24.24 per cent discount, as reported by multiple outlets.

The weak opening was not entirely unexpected. Ahead of the listing, the grey market had signalled caution, with the IPO trading at a discounted grey market premium of ₹7 against the issue price, according to Business Standard and CNBC TV18. Business Today similarly noted that shares were trading at a discount of ₹7-8 apiece in the grey market ahead of the debut.

The stock's weak start continued after the initial listing. Free Press Journal reported that selling pressure pushed the stock to an intraday low of ₹71.25, nearly 28 per cent below its IPO price. The Hindu Business Line noted that the stock scaled the upper circuit within seconds of listing, touching ₹75.60 on the NSE and ₹78.74 on the BSE, but continued to trade below its issue price.

Investor losses

For investors who were allotted shares, the poor listing translated into immediate losses. Business Today and Outlook Money both calculated that an investor who received the minimum lot of 151 shares would have lost about ₹4,077, based on the difference between the upper price band of ₹99 and the NSE listing price of ₹72.

The minimum investment for retail investors at the upper price band was ₹14,949, according to Outlook Business and Outlook Money.

IPO details and subscription

The IPO, which was open for subscription from August 25 to 28, raised ₹175.06 crore, according to CNBC TV18 and Outlook Money. It was a book-built issue comprising entirely a fresh issue of 1,76,83,000 equity shares of face value ₹10 each, with no offer-for-sale component, as reported by Business Standard and The Hindu Business Line.

The price band was fixed at ₹94-99 per share, with a lot size of 151 shares.

Despite the weak debut, the issue received decent demand. Multiple outlets reported that the IPO was subscribed 2.93 times overall, with investors placing bids for 5.18 crore shares against 1.76 crore shares on offer. The non-institutional investor portion saw the strongest demand at 3.55 times, while the retail portion was subscribed 2.68 times and the qualified institutional buyers' (QIB) portion 1.72 times, according to Business Standard and CNBC TV18.

The issue had a reservation of 10 per cent for QIBs, 50 per cent for retail investors and 40 per cent for non-institutional investors, Business Standard reported.

The company plans to utilise ₹115 crore of the net proceeds for working capital requirements and ₹15 crore for capital expenditure on purchase of machinery or equipment, with the remainder for general corporate purposes, as stated by Moneycontrol and The Hindu Business Line. Business Standard put the capex figure at ₹15.408 crore.

Mefcom Capital Markets Ltd was the book-running lead manager to the issue, while Kfin Technologies Ltd was the registrar, according to The Hindu Business Line and Business Today.

Company overview and risks

Annu Projects, established in 2003, is engaged in the design, development, implementation, operations and maintenance of essential overhead and underground utilities infrastructure across telecom, sewerage, gas pipeline and railway signalling verticals, as reported by multiple outlets including Business Standard and Moneycontrol.

In the telecom infrastructure vertical, the company is primarily involved in surveying, designing and installing cabling and tower infrastructure for communication, automation and electronic security systems, Business Standard reported.

The company's offer document highlighted its dependence on telecom and sewerage businesses, which together contributed 94 per cent of FY26 revenue, according to Free Press Journal. Government clients accounted for up to 65 per cent of FY26 revenue, and its top 10 customers contributed around 98 per cent of revenue in FY25 and FY26, the outlet added.

Brokerage firms had mixed views on the IPO, citing concerns over cash flows, dependence on government contracts and customer concentration as key risks, Business Today reported.

Following listing, the company's market capitalisation stood at ₹510.71 crore, with around 2.09 lakh shares changing hands, according to Outlook Business and Outlook Money. Before listing, at the upper end of the price band, the company commanded a market capitalisation of around ₹648 crore, CNBC TV18 reported.

The company competes with listed peers such as Likhitha Infrastructure, Bondada Engineering, EMS and Suyog Telematics, according to CNBC TV18 and Outlook Money.

Analyst perspective

Shivani Nyati, Head of Wealth at Swastika Investmart, said the post-listing valuation appeared reasonable at around 19.6 times price-to-earnings, which is below peers such as EMS at around 24.6 times and Likhitha Infrastructure at around 23.2 times, as reported by Outlook Business.

Nyati noted the company has a strong order book of ₹938.65 crore and visibility of ₹1,959 crore from ongoing projects. She advised existing investors to hold the stock with a stop-loss of ₹65, and suggested fresh investors could consider gradual buying on dips rather than chasing the stock after its weak debut. According to Nyati, the sharp listing discount has made valuations more attractive for long-term investors, although cash flows will need to be closely monitored.