Oval Projects Engineering

• Oval Projects Engineering is coming out with an initial public offering (IPO) of 54,99,200 equity shares in a price band Rs 80-85 per equity share.
• The issue will open on August 28, 2025 and will close on September 01, 2025.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 8.00 times of its face value on the lower side and 8.50 times on the higher side.
• Book running lead manager to the issue is SMC Capitals.
• Compliance Officer for the issue is Nisha Kashyap.

Profile of the company

Oval Projects Engineering is primarily an infrastructure services company engaged in the business of providing engineering, procurement and construction (EPC) industrial infrastructure services and operations and maintenance (O&M) services to its PAN India customers especially in the Oil & Gas sector. Headquartered at Agartala-Tripura, it commenced its business operations as a project management consultancy company. Over the last decade, it has expanded and diversified its business services to EPC, O&M and other infrastructure services and constantly improved its business processes.

The company is run by its visionary Promoter, Goutam Debnath who is having technical experience of over a decade in the oil and gas pipeline infrastructure services business and is the guiding force behind the successful execution of its business strategies over the years. His industry knowledge and understanding, track record and relationship in the industry, has been instrumental in the growth of its business and gives it the competitive advantage to expand its geographical and client presence in existing as well as target markets, while exploring new avenues for growth in future. 

The company focuses on upstream, midstream and downstream facility development activities in Oil and Gas sector, such as processing plant, pipeline laying, horizontal directional drilling, terminal station, City Gas Distribution (CGD) work, O&M of PNG/PNG services and in other related EPC projects. It also provides O&M services for captive power plants. Beyond Oil & Gas, it actively undertakes civil projects catering to the urban development, including smart cities. It has been awarded a few projects in urban infrastructure which are funded by international financing organizations. It has a proven track record of delivering complex infrastructure projects.

Proceed is being used for:

• Meeting long-term working capital requirements
• General corporate purposes

Industry Overview

India holds a significant position in the global oil and gas industry due to its large and growing energy market. India has one of the largest refining capacities globally, ranking 4th in the world. It is a net exporter of refined petroleum products and a regional refining hub. India is focusing on increasing the share of renewable energy while reducing reliance on fossil fuels as part of its climate commitments. The government has launched initiatives like the Open Acreage Licensing Policy (OALP) to attract investment in oil and gas exploration and significant investments are being made in pipelines, LNG terminals, and city gas distribution networks to enhance domestic energy access.

In recent years the demand for natural gas in India has increased significantly due to its higher availability, development of transmission and distribution infrastructure, the savings from the usage of natural gas in place of alternate fuels, the environment friendly characteristics of natural gas as a fuel and the overall favourable economics of supplying gas at reasonable prices to end consumers. Power and Fertilizer sector remain the two biggest contributors to natural gas demand in India and continue to account for more than 55% of gas consumption. India can be divided into six major regional natural gas markets namely Northern, Western, Central, Southern, Eastern and North-Eastern market, out of which the Western and Northern markets currently have the highest consumption due to better pipeline connectivity. However, with the increasing coverage and reach of natural gas infrastructure in India, this regional imbalance is expected to get corrected.

Over the past decade, infrastructure investment in India has grown significantly, supported by increased budget allocations and private sector participation. Government infrastructure spending has increased at a CAGR of 11% over the last 10 years, with the FY2024-25 budget allocating Rs 10 lakh crore ($120 billion) for infrastructure projects. The government has earmarked substantial funds for oil and gas infrastructure, including pipeline networks, city gas distribution (CGD) projects, and LNG terminals. India’s pipeline network has expanded significantly, with projects such as the Jagdishpur-Haldia-Bokaro-Dhamra Pipeline (JHBDPL) and North East Gas Grid gaining traction. Further, Major refinery upgrades and capacity additions, including the Ratnagiri Refinery and Petrochemicals project, have bolstered EPC opportunities.

Pros and strengths

Strong project execution capabilities: The company’s technically qualified and experienced employee pool and strong project management systems and capabilities enable it to execute large as well as complex projects. Its execution capabilities, comprising strong in-house operations consisting of design, engineering, procurement, construction teams, enable it to execute large as well as complex projects. Its track record in oil & gas projects has been instrumental in its consistent sales and performance. Its management team ensures efficient and rapid construction and completion of its pipeline projects, and its procurement team works with vendors who have the scale to deliver and meet its requirements to procure construction materials and equipment. It places significant emphasis on cost management and rigorously monitor its projects to ensure that they are completed within committed timelines and budgeted amounts.

Optimal utilization of resources: The company constantly endeavours to improve its execution process, capabilities, skill up gradation of employees, modernization of plant and machineries to optimize the utilization of resources. It regularly analyses its material procurement policy and project execution process to de‐bottle neck the grey areas and take corrective measures for smooth and efficient working thereby putting resources to optimal use.

Visible growth through a robust order book: An order book is considered one of the key indicators of future performance as it represents a portion of anticipated future revenue. Its strategy is not focused solely on order book addition but, rather, on adding quality projects with potentially higher margins and/or prestigious projects that help enhance its growing reputation. By diversifying its skill set an order book across different sectors, the company is able to pursue a broader range of project tenders and consequently, optimize its business volume and profit margins. As of April 09, 2025, the company has more than 30 on-going projects for which Rs 45,299.61 lakh worth project execution is pending, suggesting its strong order book.

Risks and concerns

Maximum revenue comes from limited customers: A significant portion of its revenue from operations have been attributable to and will continue to be attributable to certain key customers. The company has garnered 79.25%, 69.21% and 76.49% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. There are several factors outside of its control that may result in a customer's decision to discontinue awarding projects to it or prematurely terminate existing projects, including changes in strategic priorities, a demand for price reductions, market dynamics and financial pressures. If its customers do not award additional projects to it or if the company fails to expand the size of its business with them, or expand to additional customers, its business, profits and results of operations could be adversely affected.

Dependent on a few suppliers for purchases of materials: The company’s top ten suppliers contributed 57.04%, 54.41% and 87.40% of its cost of material consumed for the period / financial year ended on March 31, 2025, March 31, 2024 and March 31, 2023, respectively based on Restated Consolidated Financial Statements. The company’s suppliers are not contractually bound to deal with it exclusively, it may face the risk of its competitors offering better terms to such suppliers, which may cause them to cater to its competitors alongside it. Though the company will not face substantial challenges in maintaining its business relationship with its suppliers or finding new suppliers, there can be no assurance that it will be able to maintain long term relationships with such suppliers or find new suppliers in time.

Maximum revenue comes from government controlled entities: The company’s substantial portion of revenue is dependent on government controlled entities including central and state government entities. It enters into contracts primarily with government-controlled entities for providing engineering, procurement and consultancy services. During the Fiscals 2025, 2024 and 2023, it generated Rs 9,223.36 lakh, Rs 6,060.16 lakh and Rs 5,078.13 lakh from government-controlled entities constituting 90.17%, 77.73% and 91.06% respectively, of its revenue from operations. In the event any one or more these customers cease to release tenders, its business may be adversely affected.

Outlook

Oval Projects Engineering is an infrastructure development company specializing in the Oil & Gas, City Gas Distribution, Urban Development, and Energy sectors across India. The company specializes in upstream, midstream, and downstream activities in the Oil and Gas sector, including pipeline laying, processing plants, CGS work, and O&M services for power plants and EPC projects. The company has strong project execution capabilities. It has visible growth through a robust order book. On the concern side, a significant portion of its revenue from operations is attributable to certain key customers and to projects located in India, and its business and profitability is dependent on its ability to win projects from such customers. Moreover, majority of its revenues are from oil and gas sector. Significant social, political, or economic changes in the oil and gas sector could adversely affect its business, results of operations, financial condition, and cash flows.

The company is coming out with a maiden IPO of 54,99,200 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 80-85 per equity share. The aggregate size of the offer is around Rs 43.99 crore to Rs 46.74 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 31.20% from Rs 7,796.54 lakh in the financial year ended March 31, 2024, to Rs 10,228.99 lakh in financial year ended March 31, 2025. Moreover, the profit after tax increase from Rs 440.11 lakh in financial year ended March 31, 2024, to Rs 933.25 lakh for financial year ended March 31,2025.

The company continues to maintain and strengthen its position in implementation of projects in oil & gas and specialized domain to improve operating margins. It will continue to focus on construction of existing projects while seeking opportunities to expand project. It intends to draw its experience and leverage its operating skills through its equipment and project management tools to increase productivity and maximize asset utilization in its ongoing projects. It has executed more than 30 projects and has developed a reputation for undertaking and completing challenging projects over the years. Its ability to effectively manage projects will be crucial to its continued success.