Prerna Infrabuild Limited is an Ahmedabad-based real estate developer incorporated in **1988**. The company specializes in the development of high-value residential and commercial properties, primarily concentrated within the state of Gujarat. With a history spanning over three decades, the firm is currently transitioning from a family-led enterprise into an aggressively scaling corporate entity. --- ### Core Operations and Revenue Drivers The company operates exclusively within the **Real Estate and Development** segment. Its business model is vertically integrated, focusing on the strategic acquisition of land followed by the development of premium residential and commercial assets. * **Revenue Composition:** Residential building construction is the primary driver, accounting for **93.79%** of total turnover in recent filings. * **Strategic Asset Monetization:** In **FY 2023-24**, the company executed a major land sale at **Tragad (Survey No. 86)** to M/s Shiv Ashish Infra for **₹17 crore**, a transaction representing more than **10%** of the entity's total revenue for the period. * **Geographic Focus:** Operations are **100% India-based**, with a heavy concentration in the **Ahmedabad** market, managed from its central registered office. ### Financial Performance and Growth Trajectory Prerna Infrabuild has demonstrated a significant recovery in top-line performance, though profitability remains sensitive to project cycles and operational costs. | Particulars (₹ in Lakhs) | FY 2023-24 | FY 2022-23 | FY 2021-22 | | :--- | :--- | :--- | :--- | | **Total Revenue** | **4,535.07** | **1,816.84** | **2,318.00** | | **Profit After Tax (PAT)** | **521.00** | **983.00** | **587.00** | | **Non-Current Assets** | **1,854.60** | **1,756.52** | — | | **Revenue Growth (Y-o-Y)** | **+33%** | **-30%** | — | **Dividend and Reserve Policy:** For **FY 2023-24** and **FY 2022-23**, the Board recommended **no dividend** payments and opted against transferring funds to the **General Reserve**. This decision was driven by the need to conserve capital for expansion and address **inadequate profits** during the transition phase. --- ### Capital Structure and Strategic Fundraising To support its aggressive expansion phase, the company has undergone a significant recapitalization and has secured approval for higher leverage. * **Rights Issue (2024):** The company successfully raised **₹48,17,00,400** through a Rights Issue of **2,40,85,020** equity shares. The issue was priced at **₹20 per share** (including a **₹10 premium**) with a rights entitlement ratio of **1:2**. * **Equity Base:** Following the issue, the **Authorized Share Capital** increased to **₹38,00,00,000** (3.8 crore shares), with the **Paid-up Share Capital** standing at **₹36,12,75,300** as of March 31, 2024. * **Enhanced Borrowing Limits:** Shareholders have authorized an increase in borrowing limits to **₹100 Crores**. This provides the Board with the flexibility to secure funding via **Term Loans**, **Bonds**, **Notes**, and **Debentures** (convertible or non-convertible) from banks, mutual funds, and institutional investors. --- ### Group Structure and Subsidiary Portfolio The company manages its diverse project portfolio through a mix of subsidiary firms and LLPs, allowing for focused capital allocation per project: * **Prerna Infrabuild (Subsidiary Partnership):** **90%** ownership stake. * **Prernamount Infrabuild LLP (Subsidiary):** **51%** ownership stake. * **Prerna Solitaire Infra LLP (Associate):** Capital contribution focused on specific residential projects. --- ### Debt Profile and Asset Security The company utilizes secured credit facilities to manage liquidity, shifting its security focus toward current financial assets. * **Security Shift:** The **First Charge** on non-current assets was reduced to **zero** in FY24 (from **₹1,581.00 Lakhs**), while the charge on current financial assets increased to **₹955.12 Lakhs**. * **Credit Instruments:** * **Overdraft against Fixed Deposits (FDOD):** Secured by the pledge of liquid fixed deposits. * **Vehicle Loans:** Secured by the **hypothecation** of motor cars. * **Solvency:** Auditors have confirmed there is no material uncertainty regarding the company’s ability to meet liabilities falling due within **one year**, though this is not a guarantee of long-term debt discharge. --- ### Governance and Management Oversight The company maintains a balanced board to ensure executive agility and independent oversight. * **Key Leadership:** * **Vijay Chandulal Shah:** Chairman, Managing Director, and **CEO**. * **Sanket Vijay Shah:** Managing Director and **CFO**. * **Board Composition:** Comprises **3 Executive Directors** and **3 Non-Executive Independent Directors**. * **Audit and Compliance:** * **Statutory Auditor:** Philip Fernandes & Co. * **Secretarial Auditor:** M/S GKV & Associates (Appointed for a **5-year term** through **FY 2029-30**). * **New Appointment:** A new **Non-Executive Independent Director** was appointed for a five-year term (effective **November 2024**) to strengthen governance during the expansion phase. * **Internal Audit Note:** As of **August 2024**, the company **does not have an Internal Auditor**, marking a specific area for future compliance strengthening. --- ### Risk Factors and Mitigation Framework Management operates a **Risk Management Mechanism** to navigate the capital-intensive and highly regulated Indian real estate sector. #### **Operational and Sectoral Challenges** * **Input Costs:** Exposure to **Price Risks** and "unfair practices" in the **Cement Industry** which can lead to sudden margin compression. * **Execution Bottlenecks:** Risks associated with **Land Acquisition**, **Land Use** conversions, and delays in obtaining **Construction Approvals**. * **Resource Scarcity:** Persistent **Shortage of Labour** and a lag in **Technology** adoption within the construction process. #### **Legal and Regulatory Exposure** The company is currently contesting the following tax demands: | Assessment Year (AY) | Nature of Dispute | Amount (INR) | Status | | :--- | :--- | :--- | :--- | | **AY 2017-18** | Income Tax Demand | **₹593.63 Lakh** | Appeal filed with **CIT(A)** | | **AY 2022-23** | Wrongful addition of Deferred Tax | **₹29.23 Lakh** | **Rectification Application** filed | * **Compliance Integrity:** There are no pending proceedings under the **Benami Transactions (Prohibitions) Act, 1988**, and all title deeds for immovable properties are held directly in the company’s name. * **Policy Risk:** The company remains vulnerable to **Retrospective Policy Changes** by government bodies that could impact project viability.