Markolines Traffic Controls SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 15 Sep 2021 – 20 Sep 2021
- Listing date
- 27 Sep 2021
- Face value
- ₹10 per share
- Issue price
- ₹78 per share
- Lot size
- 1,600 shares
- Total issue size
- ₹40 Cr
- Market cap at offer price
- ₹149 Cr
- Promoter holding
- 100.00% → 73.16% pre-issue → post-issue
- ISIN
- INE0FW001016
- Registrar
- Bigshare Services Pvt.Ltd.
- Lead managers
- Gretex Corporate Services Ltd.
- Registered office
- 502, A Wing, Shree Nand Dham, Sector 11, CBD Belapur, Maharashtra
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 2,57,600 | — | — |
Application size
Minimum 1,600 shares per lot, in multiples, at ₹78
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 1,600 | ₹1,24,800 |
| S-HNI (min) | 2 | 3,200 | ₹2,49,600 |
| S-HNI (max) | 8 | 12,800 | ₹9,98,400 |
| B-HNI (min) | 9 | 14,400 | ₹11,23,200 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| Market cap | — | ₹149 Cr |
About Markolines Traffic Controls SME
Markolines Traffic Controls Limited was incorporated as a private limited company on November 08, 2002, and converted to a public limited company in April 2021. The company has evolved from a single-product thermoplastic road marking business into a comprehensive Highway Operations & Maintenance service provider with 19 years of experience. The company generates revenue through three principal categories: Highway Operations (toll operations, route patrolling, incident management), Highway Maintenance (routine, preventive, and major maintenance & repairs), and Specialized Maintenance Services (microsurfacing, base/sub-base stabilization, cold in-place recycling). As of July 31, 2021, the company has an Order Book of ₹27,607 Lakh and manages approximately 943.31 km of National Highways across multiple states including Rajasthan, Uttar Pradesh, Maharashtra, Jharkhand, Bihar, Tamil Nadu, West Bengal, and Andhra Pradesh. The company has executed over 90+ highway operations and maintenance projects since 2002.
Company Analysis
from RHPMarkolines Traffic Controls Limited is a Highway Operations & Maintenance (O&M) service provider offering toll operations, routine and preventive maintenance, major maintenance & repairs, and specialized maintenance services including microsurfacing, base stabilization, and cold in-place recycling across Indian national highways.
Markolines Traffic Controls Limited was incorporated as a private limited company on November 08, 2002, and converted to a public limited company in April 2021. The company has evolved from a single-product thermoplastic road marking business into a comprehensive Highway Operations & Maintenance service provider with 19 years of experience. The company generates revenue through three principal categories: Highway Operations (toll operations, route patrolling, incident management), Highway Maintenance (routine, preventive, and major maintenance & repairs), and Specialized Maintenance Services (microsurfacing, base/sub-base stabilization, cold in-place recycling). As of July 31, 2021, the company has an Order Book of ₹27,607 Lakh and manages approximately 943.31 km of National Highways across multiple states including Rajasthan, Uttar Pradesh, Maharashtra, Jharkhand, Bihar, Tamil Nadu, West Bengal, and Andhra Pradesh. The company has executed over 90+ highway operations and maintenance projects since 2002.
Objects of the Issue
- Prepayment/Repayment of long-term debts availed by our company ₹380.00 Lakh p.19
- Working Capital Requirements ₹2,319.84 Lakh p.19
- General Corporate Purpose ₹900.00 Lakh p.19
- Prepayment/Repayment of certain debt facilities availed by our Company ₹380.00 Lakh p.68
- To Meet Working Capital Requirements ₹2,319.84 Lakh p.69
- General Corporate Purposes ₹900.00 Lakh p.68
- Funding working capital requirements
Issue Structure
- Total Issue
- 51,28,000 Equity Shares aggregating to ₹3,999.84 Lakh
- Fresh Issue
- 51,28,000 Equity Shares of ₹10.00 each for cash at a price of ₹78.00 per Equity Share (including premium of ₹68.00 per Equity Share) aggregating to ₹3,999.84 Lakh
- Price Band
- ₹78.00 per Equity Share (100% Fixed Price Issue)
- Lot Size
- 1,600 Equity Shares
- Face Value
- ₹10.00 per Equity Share
Business Model
The company earns revenue through project-based contracts for Highway Operations & Maintenance services. Clients award projects following a competitive bidding process. Revenue is generated from three segments: Highway Operations (including toll operations, route patrolling, and incident management), Highway Maintenance (routine maintenance, preventive maintenance, and major maintenance & repairs), and Specialized Maintenance Services (microsurfacing, base/sub-base stabilization, and cold in-place recycling). Highway operations revenue constituted 19.65% of total revenue for FY 2020-21, while major maintenance and repairs constituted 80.35%.
Business Segments
SWOT Analysis
- • 19 years of operational experience in Highway O&M services(p.18)
- • Significant growth in project scale and complexity over time(p.18)
- • Diversified service portfolio covering operations, maintenance, and specialized services(p.18)
- • Substantial order book of ₹27,607 Lakh as of July 31, 2021(p.18)
- • Over 90+ projects executed with geographic and service diversification(p.18)
- • Established brand and reputation in Highway O&M domain with 19 years of experience(p.97)
- • Diversified portfolio across three service categories: Highway Operations, Maintenance, and Specialized Services(p.97)
- • Proven track record of executing 90+ Highway O&M projects with significant growth in order book(p.97)
- • Rich management experience with approximately 2 decades in Highway O&M services(p.100)
- • Efficient business model with cost optimization and performance-based approach(p.100)
- • Pioneer in introducing advanced technologies like extrusion technology for road marking and Microsurfacing with Fiber(p.98)
- • Pan-India presence across 9 states with diversified geographical footprint(p.100)
- • Strong professional and execution team with qualified personnel(p.100)
- • Established expertise in specialized highway maintenance technologies including microsurfacing and CIPR(p.108)
- • Proven track record delivering large-scale projects with significant revenue impact(p.125)
- • Comprehensive infrastructure and machinery for cold-in-place recycling operations(p.109)
- • Strong safety and environmental certifications(p.116)
- • Experienced management with 20+ years in highway operations and maintenance(p.124)
- • Established brand with 19 years of O&M domain experience(p.191)
- • Proven track record of executing 90+ projects with significant scale expansion(p.191)
- • Strong management team with 200+ years combined senior management experience(p.192)
- • Diversified service portfolio across operations, maintenance, and specialized services(p.192)
- • Strong order book growth demonstrating market traction(p.192)
- • Heavy dependence on top 5 and top 10 customers for revenue(p.33)
- • Significant outstanding litigation including tax, CSR, and corporate compliance matters(p.24)
- • Non-compliance with corporate statutory provisions and missing RoC documents(p.27)
- • Negative cash flows from financing and investing activities in past years(p.31)
- • Failure to obtain No Objection Certificates from several lenders for the IPO(p.26)
- • Significant debt burden with secured loans of ₹2,013.28 Lakh and restrictive covenants(p.35)
- • CSR non-compliance with failure to utilize and deposit required amounts(p.28)
- • Revenue volatility and decline from FY2020 to FY2021(p.19)
- • Order book may not be representative of future results and actual income may be significantly less(p.97)
- • Heavy dependence on IT infrastructure and internal systems with risk of reliability failure(p.102)
- • Limited experience in non-highway sectors despite diversification efforts(p.102)
- • High customer concentration with top 5 customers representing 87% of sales(p.113)
- • High supplier concentration with top 5 suppliers representing 58% of purchases(p.113)
- • Significant debt levels relative to equity with long-term borrowings of Rs. 1,639.28 crores(p.164)
- • Outstanding CSR obligations not yet deposited within statutory timeframe(p.170)
- • Outstanding tax demands from past years(p.171)
- • Highly leveraged balance sheet with total debt-to-equity of 1.46 as of March 31, 2021(p.189)
- • Dependence on related party financing; unsecured loans from related parties of ₹841.91 Lakh(p.204)
- • Material related party transactions including loans from directors and relatives(p.172)
- • Significant concentration of top customers; top 5 customers represent 87% of revenue(p.205)
- • Profit before tax declined 36% from FY 2019-20 to FY 2020-21, impact of COVID-19 pandemic(p.200)
- • Expanding Indian road infrastructure with significant government investment(p.18)
- • Strong growth in road transportation and vehicle movement(p.18)
- • Transformation from single-product to multi-product service provider(p.18)
- • Aspiration to become an Indian MNC in Highway O&M sector(p.18)
- • Potential for business diversification and new service models(p.29)
- • Significant expansion potential given government focus and allocation for infrastructure development(p.88)
- • Growing TOT (Toll Operate & Transfer) model creating large scale O&M opportunities(p.97)
- • Diversification into related infrastructure sectors like airport runways, railways, metros and smart cities(p.102)
- • Government target to construct 60,000 km of national highways in next five years creating substantial project pipeline(p.88)
- • Expanding commercial vehicle production and freight movement creating demand for highway services(p.91)
- • Strategic acquisition and alliance opportunities to gain new clients and technology capabilities(p.103)
- • Expanding road network requiring highway maintenance services(p.109)
- • Growing adoption of advanced maintenance technologies like microsurfacing(p.118)
- • Established market position to leverage for geographic expansion and new services(p.111)
- • Potential to expand into adjacent infrastructure segments (airports, railways, ports)(p.125)
- • Large TAT (Toll Operate & Transfer) opportunity with 1000+ crores estimated business(p.191)
- • Expansion of National Highway network requiring increased O&M services(p.190)
- • Pan-India geographic expansion with projects across 9 states(p.192)
- • Growing adoption of specialized road surfacing technologies like Microsurfacing(p.191)
- • Dependency on winning new competitive bids for project awards(p.24)
- • Intense competition from larger, better-resourced competitors(p.29)
- • Project delays and liquidated damages exposure(p.25)
- • Vulnerability to seasonal and adverse weather conditions(p.26)
- • COVID-19 pandemic impact on business operations(p.27)
- • Regulatory changes and government policy shifts(p.40)
- • Shortage and availability of skilled labor and contract workers(p.25)
- • Economic slowdown and reduced infrastructure investment(p.29)
- • Natural calamities and external forces beyond company control(p.41)
- • Foreign exchange and currency fluctuation risks(p.41)
- • Business is working capital intensive with incremental working capital needs of ₹3,386.17 Lakh for FY 2021-22(p.70)
- • Pandemic lockdown has impacted project timelines, completion and costs(p.89)
- • Competition for qualified personnel and skilled labour is increasing among infrastructure companies(p.102)
- • Cost competitiveness is key to success in the industry with need for low execution costs(p.102)
- • Highway projects subject to adverse climatic conditions and regulatory delays(p.101)
- • Funding requirements and deployment dependent on external circumstances beyond management control(p.69)
- • Intense competition from other highway O&M service companies(p.112)
- • Price competition as primary factor in tender awards(p.112)
- • Weather and geographical conditions impact road maintenance requirements(p.106)
- • Regulatory complexity across multiple states with varying highway laws(p.117)
- • Dependency on government contracts and tender processes(p.117)
- • Intense competition from larger contractors with greater resources(p.192)
- • Price-based competition in tender awards may compress margins(p.192)
- • Dependence on government projects and PPP model vulnerabilities(p.190)
- • Material customer concentration and customer loss risk; top 10 customers represent 96% of revenue(p.205)
- • Exposure to general economic slowdown and commodity price fluctuations(p.204)
- • Outstanding litigation with customers (Sion-Panvel Tollways, Damoh-Jabalpur Toll Roads, Western MP Infrastructure)(p.214)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Sanjay Bhanudas Patil | Promoter | 48.78% | — |
| Mr. Karan Atul Bora | Promoter | — | — |
| Sanjay Bhanudas Patil | Promoter | 38.66% | 28.29% |
| Karan Atul Bora | Promoter | 10.12% | 7.40% |
| Mr. Sanjay Bhanudas Patil | Promoter | 38.66% | — |
| Mr. Karan Atul Bora | Promoter | 10.12% | — |
| Sanjay Patil | Promoter/Director | 38.66% | 35.23% |
| Kirtinandini Patil | Promoter/Promoter Group | 8.89% | 8.10% |
| Jaya Oswal | Promoter/Promoter Group | 9.94% | 9.04% |
| Kirti Oswal | Promoter/Promoter Group | 9.60% | 8.74% |
| Karan Bora | Promoter/Director/Promoter Group | 10.12% | 9.20% |
| Kunal Bora | Promoter/Promoter Group | 9.88% | 8.99% |
Leadership
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