**NSE/BSE Listed | Sector: Engineering & Industrial Trading** Raunaq International Limited (formerly **Raunaq EPC International Limited**) is a diversified industrial entity established in **1965** as part of the **Surinder Paul Kanwar Group**. The company has recently undergone a strategic rebranding and operational pivot to transition from a legacy Engineering, Procurement, and Construction (EPC) firm into a multi-sector player involved in high-end power infrastructure, auto-component trading, and machining services. --- ### **Strategic Rebranding and Business Model Pivot** On **January 10, 2024**, the company officially changed its name to **Raunaq International Limited**. This shift reflects a move away from a pure-play EPC model toward a more resilient, dual-revenue structure: * **The EPC Segment:** Focuses on specialized industrial piping, cross-country pipelines, and storage systems for the power, chemical, and hydrocarbon sectors. * **The Trading & Machining Segment:** Focuses on **alloy steel for auto components** and machining activities. This segment was scaled to sustain the company during periods of low EPC activity; in the 2023 calendar year, trading accounted for **98.68%** of total revenue. --- ### **Core Engineering Capabilities and Project Pipeline** The company maintains significant technical expertise in **Ultra Supercritical Thermal Power Plants**, which are essential for high-efficiency energy production. Despite historical constraints in bidding for large-scale tenders due to banking norms, the company has recently secured a robust order book. **Key Recent Project Wins:** | Project Name | Client | Value (Rs. Cr) | Status/Phase | | :--- | :--- | :--- | :--- | | **Raigarh Ultra Supercritical Project** | **Adani Power Limited** | **16.80** | Awarded Jan 2025 (Phase-II) | | **Mahan Ultra Supercritical Project** | **Mahan Energen Limited** | **15.40** | Awarded FY 2025-26 (Phase-III) | | **Mahan Phase-II Project** | **Adani Power** | **14.98** | Secured FY 2023-24; Revenue in FY 25 | | **NUPPL Ghatampur (3x660 MW)** | **GE Power Systems** | - | Completed FY 2022-23 | | **NTPC Ramagundam (2600 MW)** | **NTPC** | - | Completed FY 2022-23 | --- ### **Financial Turnaround and Capital Structure** The company achieved a significant financial recovery in **FY 2024-25**, driven by the execution of new EPC orders and steady trading volumes. **Comparative Financial Performance:** | Metric (Rs. in Crores) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :---: | :---: | :---: | | **Total Revenue** | **22.06** | **4.65** | **7.79** | | **Trading Revenue Contribution** | **9.00** | *Included* | *Included* | | **Equity Share Capital** | **334.32** | **334.32** | **334.32** | | **Other Equity** | **439.46** | **318.04** | **422.31** | | **Total Equity** | **773.78** | **652.36** | **756.63** | | **Long Term Debt** | **170.00** | **-** | **25.00** | | **Profitability Status** | **Profit-Generating** | Transitioning | Loss-making | **Revenue Recognition Policy:** * **EPC Projects:** Recognized via the **percentage of completion** method. * **Trading:** Recognized immediately upon delivery of goods. --- ### **Market Outlook and Growth Drivers** Raunaq International is positioning itself to benefit from India’s aggressive infrastructure and energy targets: * **Power Demand:** India’s installed capacity is projected to reach **817 GW by 2030** (from **442.85 GW** in 2024). * **Infrastructure Multiplier:** The company aligns with the **National Infrastructure Pipeline (NIP)**, supported by a **37%** increase in government CAPEX in the current fiscal year. * **Sector Diversification:** To mitigate the cyclicality of the power sector, the company is exploring **Irrigation and Water System** projects, which often receive more favorable credit support from banks. --- ### **Critical Risk Factors and Mitigation** #### **1. Promoter-Level Legal Disputes** The company is currently involved in a complex family litigation (**CS (OS) 329/2023**) in the **Delhi High Court**. * **The Dispute:** **Mr. Sachit Kanwar** has filed a suit against the Chairman, **Mr. Surinder Paul Kanwar**, regarding a **Memorandum of Family Settlement (MOFS)** from **2012**, seeking the transfer of shares. * **Regulatory Oversight:** The **Ministry of Corporate Affairs (MCA)** is reviewing communications from **Gulab Merchandise Private Limited** (a promoter entity) regarding governance issues. #### **2. Liquidity and Banking Constraints** A primary bottleneck for the EPC business is the availability of **Bank Guarantees (BG)** and working capital. * **Historical Impact:** Lack of banking facilities led to a **24%** revenue decline in **FY 2022-23**. * **Statutory Delays:** Management has noted past delays in depositing **Provident Fund, Wages, TDS, and GST** due to cash flow shortages. * **Credit Exposure:** Total credit risk exposure increased to **Rs. 16.08 Crore** as of March 31, 2025. #### **3. Operational and Actuarial Risks** * **Execution Risk:** Potential for cost/time overruns in large EPC contracts. * **Employee Benefits:** The company’s unfunded **Leave Encashment Scheme** is sensitive to **Discount Rate Risk** and **Salary Escalation Risk**, where a fall in discount rates increases the ultimate liability. * **Governance:** To strengthen oversight, the company proposed the appointment of **Mr. Virender Pal Jain** as a **Non-Executive Independent Director** for a **5-year term** starting **December 26, 2025**. --- ### **Operational Synergy and Resource Base** The company leverages its position within the **Surinder Paul Kanwar Group**, maintaining close ties with **Bharat Gears Limited** and **Clip-Lok Simpak (India) Private Limited**. While the company does not hold significant immovable property, it maintains a specialized fleet of tools, plants, and a technical workforce capable of executing complex industrial piping and fire water systems. Management’s current focus remains on **optimizing the cost of capital** and improving **Net Debt to Equity ratios** to restore full bidding capacity.