IPO Overview

Annu Projects does EPC for sewerage and telecom, with 96% of revenue traceable to government or PSU payers. We hold a negative view on government-facing EPC: the work is commoditised, orders are won on lowest price rather than capability, and the payer controls the collection cycle, keeping receivables high and cash generation weak. That shows here, with unbilled revenue rising from ₹16 cr to ₹77 cr over FY24 to FY26 and receivable days from 138 to 237. Order books have not been a reliable guide either: sector revenue grew 2.8% in FY26 against double-digit guidance, with only 29% of operating profit converting into cash against a historical 65% (India Ratings). Annu's ₹1,005 cr order book is 74% one sub-contracted BharatNet Kerala order at a scale it has not executed before, and largest customer A2Z Infra, 27% of FY26 revenue, is in distress with its contract already terminated. At 20x P/E the issue is priced below peers at 31x, with the O&M mix and government outlay offering growth levers. But a cheaper multiple does not compensate for the structural issues this business carries, and we would rather stay out. One can expect only flat to moderate listing gains as per current GMP ~4% (26 Aug 2026), provided the GMP sustains.