Introduction
The Garuda Construction and Engineering IPO is set to open for subscription on October 8, 2024, and will remain available until October 10, 2024. As a subsidiary of PKH Ventures, Garuda aims to raise approximately Rs 264.10 crore through this public offering, with a fixed price band of Rs 92 to Rs 95 per share. This marks a significant opportunity for investors, especially following the previous attempt by PKH Ventures to launch a Rs 379 crore IPO in July 2023, which was withdrawn due to inadequate institutional interest.
About Garuda Construction IPO
The IPO will feature 1.83 crore fresh equity shares valued at Rs 173.85 crore. Additionally, 0.95 crore shares worth Rs 90.25 crore will be available through an Offer for Sale (OFS). The allocation of shares is organized strategically, with 50% reserved for Qualified Institutional Buyers (QIB), 15% for non-institutional investors, and 35% for retail investors. Notably, up to 60% of the QIB allocation may be set aside for anchor investors to encourage early commitment.
Key Features of the IPO
- Promoters: The initial promoters include Praveenkumar Brijendra Kumar Agarwal, PKH Ventures Limited, and Makindian Township Private Limited.
- Lead Manager: Corpvis Advisors Pvt Ltd is the book running lead manager for this IPO.
- Registrar: Link Intime India Pvt Ltd will act as the registrar for the issue.
Important Dates and Lot Size
The Garuda Construction IPO will open for one day on October 7, 2024, exclusively for anchor investors. The allotment of shares to successful applicants is expected by October 11, 2024, with the equity shares reaching eligible investors’ demat accounts by October 14, 2024. The anticipated listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) is scheduled for October 15, 2024.
The minimum lot size for this IPO is set at 157 shares, requiring retail investors to make a minimum investment of approximately Rs 14,915. According to the red herring prospectus, promoter holdings in Garuda Construction stand at 96.81%, with public shareholders accounting for 3.19%.
Utilization of Funds
Garuda Construction plans to allocate Rs 100 crore of the funds raised from the IPO towards its working capital requirements. Additional proceeds will be utilized for general corporate purposes, which may include funding for undisclosed inorganic growth opportunities to further enhance business operations and market reach.
Business Overview
Headquartered in Mumbai, Garuda Construction & Engineering specializes in civil construction services across various sectors, including residential, commercial, infrastructure, industrial, and hospitality projects. The company also provides operation and maintenance (O&M) services, as well as mechanical, electrical, and plumbing (MEP) services, thus offering a comprehensive suite of solutions to its clients.
Financial Performance
Over recent years, Garuda Construction has experienced volatility in its financial performance. In the fiscal year 2024, the company’s net profit fell by 10.7% to Rs 36.4 crore, down from Rs 40.8 crore the previous year. This decline was attributed to challenging topline growth and operating efficiency issues. Revenue from operations decreased by 4% to Rs 154.2 crore in FY24, compared to Rs 160.7 crore in the previous fiscal year. Additionally, the company recorded a 10.5% year-on-year decrease in EBITDA, amounting to Rs 49.8 crore during FY24, with margins contracting by 230 basis points to 32.3%.
