The Garuda Construction and Engineering IPO is set to open for subscription on October 8, 2024, and will close on October 10, 2024. This initial public offering (IPO) presents a significant opportunity for investors looking to participate in a company that specializes in comprehensive civil construction services across various sectors, including residential, commercial, and infrastructure projects.
IPO Details
- Price Band: The price band for the Garuda Construction IPO has been fixed between ₹92 and ₹95 per equity share, with a face value of ₹5.
- Lot Size: Investors can apply for a minimum of 157 equity shares, with subsequent applications in multiples of this lot size.
- Fresh Equity Shares: The IPO includes 1.83 crore fresh equity shares along with 95 lakh equity shares offered for sale by promoter PKH Ventures Ltd.
Financial Performance
Garuda Construction has demonstrated impressive growth, with revenue from operations increasing from ₹7,702.08 lakhs in FY22 to ₹15,417.83 lakhs in FY24, reflecting a robust Compound Annual Growth Rate (CAGR) of 26.03%. Additionally, the company’s profit after tax rose from ₹1,878.22 lakhs in FY22 to ₹3,643.53 lakhs in FY24, showcasing a CAGR of 24.72%.
Competitive Position
The company boasts a leading operating profit margin of 34.80% in FY23, significantly higher than the peer average of 16.90%. Its listed peers include prominent firms such as PSP Projects Ltd and Capacite Infraprojects Ltd, which have P/E ratios ranging from 20 to 48.67.
Grey Market Premium (GMP)
As of today, the grey market premium (GMP) for Garuda Construction’s shares stands at +₹22, indicating strong investor interest and readiness to pay above the issue price. Based on this premium, the estimated listing price is projected at around ₹117, which is approximately 23.16% higher than the upper end of the IPO price band.
Allocation and Reservations
The IPO has allocated shares as follows:50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), 35% for Retail Investors
Important Dates
Allotment Date: The basis of allotment is expected to be finalized on October 11, 2024.
Refunds: Refunds will be initiated on October 14, 2024, with shares credited to demat accounts on the same day.
Listing Date: Garuda Construction shares are anticipated to be listed on both BSE and NSE on October 15, 2024.
Conclusion
The Garuda Construction and Engineering IPO represents an attractive investment opportunity for those looking to enter the construction sector. With strong financial performance and positive market sentiment reflected in the grey market premium, investors may want to consider their options carefully before participating. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and do not reflect the opinions of this publication. We advise investors to consult certified experts before making any investment decisions.
