Globe Civil Projects, a construction company based in Delhi, has recently filed its Draft Red Herring Prospectus (DRHP) with SEBI for an Initial Public Offering (IPO) amounting to ₹1.9 crore. This IPO will exclusively feature fresh issues, allowing all proceeds to directly benefit the company, as there is no Offer for Sale (OFS) involved. Notably, no promoters or existing shareholders are reducing their stakes, underscoring their confidence in the company’s potential.
Use of IPO Proceeds
The company has clearly outlined the deployment of funds from this IPO. A significant portion, ₹75 crore, will be allocated for working capital needs, while ₹14.06 crore will be directed towards acquiring essential equipment and machinery. The remaining funds will be utilized for various business expenses, indicating a structured approach towards operational enhancements and growth.
Promoters and Shareholding Structure
The promoters of Globe Civil Projects comprise Ved Prakash Khurana, Nipun Khurana, and Vipul Khurana. According to the DRHP, Nipun and Vipul Khurana are major shareholders, each holding 16,045,705 equity shares. In comparison, Ved Prakash Khurana holds a smaller share with 5,773,659 equity shares. This shareholding structure reflects a strong commitment from the promoters towards driving the company’s future endeavors.
Financial Performance Overview
In terms of financial health, Globe Civil Projects has reported an impressive total current asset value of ₹2,444.49 million for the year 2024, marking a steady increase from ₹1,968.57 million in 2023 and ₹1,698.64 million in 2022. The Return on Equity (ROE) ratio has shown remarkable growth as well, rising from 8.09% in FY 2023 to 21.95% in FY 2024. The company has successfully completed 37 projects over its 20-year history and currently has 12 ongoing projects, spanning various segments such as social, commercial, transportation, and logistics.
Dividend Decisions
Dividend policies will be determined based on both internal and external factors, including capital needs, profitability, cash flow adequacy, contract obligations, and future growth plans. The company boasts a strong client base and maintains a healthy order book, which could play a crucial role in sustaining its dividend performance.
Financial Report Summary
The following table illustrates Globe Civil Projects’ financial performance over recent years, highlighting key metrics such as revenue, expenses, and profit after tax:
| Period Ended | Revenue (₹ in Crores) | Expense (₹ in Crores) | Profit After Tax (₹ in Crores) |
|---|---|---|---|
| 2022 | ₹286.78 | ₹279.77 | ₹5.20 |
| 2023 | ₹235.17 | ₹228.43 | ₹4.85 |
| 2024 | ₹334.81 | ₹313.83 | ₹15.38 |
IPO Valuation Overview – FY2024
The IPO valuation metrics are crucial for potential investors. Below is a summary of key valuation figures for Globe Civil Projects:
| Earnings Per Share (EPS): | ₹3.58 (Basic) |
| Price/Earnings (P/E) Ratio: | N/A |
| Return on Net Worth (RoNW): | 19.80% |
| Net Asset Value (NAV): | ₹18.10 |
Peer Group Comparison
When analyzing Globe Civil Projects’ performance against its peers, the following table presents key financial ratios:
| Company | EPS | P/E Ratio | RoNW % | NAV | Income |
|---|---|---|---|---|---|
| B L Kashyap and Sons Limited | ₹2.33 | 45.65 | 10.58 | ₹22.02 | ₹1,256.77 Cr. |
| Ceigall India Limited | ₹19.37 | 19.86 | 33.57 | ₹57.68 | ₹3,066.19 Cr. |
| PSP Projects Limited | ₹34.16 | 20.65 | 13.49 | ₹222.50 | ₹2,530.01 Cr. |
| Capacit’e Infraprojects Limited | ₹16.09 | 24.30 | 7.93 | ₹179.30 | ₹1,963.65 Cr. |
| Ahluwalia Contracts (India) Limited | ₹55.95 | 20.73 | 23.43 | ₹238.84 | ₹3,891.94 Cr. |
Objects of the Issue
The primary objectives of this IPO are as follows:
- Funding working capital requirements of the company;
- Financing capital expenditures towards the purchase of equipment and machinery;
- General corporate purposes to enhance operational efficiency.
IPO Lead Managers
The esteemed financial firm, Mefcom Capital Markets Ltd., has been appointed as the lead manager for the IPO, indicating a strategic partnership aimed at successfully navigating the initial public offering process.
