Garuda Construction and Engineering IPO Day 1: Today marks the debut of Garuda Construction and Engineering Ltd in the primary market. The company, which offers comprehensive civil construction services, raised ₹75 crores from anchor investors on Tuesday, October 8, ahead of its initial public offering.
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Garuda Construction and Engineering IPO price band is set in the range of ₹92-95 per share, with a total value of ₹264.10 crore. The investors can subscribe to the initial share sale from today (Tuesday, October 8) until Thursday, October 10. The issue’s lot size is 157 equity shares and in multiples of 157 equity shares thereafter.
Half of the issue size has been allocated to qualified institutional buyers, while 35 per cent is set aside for retail investors, and the remaining 15 per cent is reserved for non-institutional investors. Interested investors can bid for a minimum of 157 equity shares and in multiples of 157 equity shares thereafter.
The company provides full-service civil construction for projects involving residences, workplaces, hotels, and infrastructure in addition to additional services for commercial and infrastructural projects. On the other hand, civil construction includes building the concrete and composite steel structures required for civil construction in addition to erecting buildings for use in commerce, industry, housing, and hospitality.
As per the red herring prospectus (RHP), the company’s listed peers are PSP Projects Ltd (with a P/E of 20), Capacite Infraprojects Ltd (with a P/E of 23.61), Vascon Engineers Ltd (with a P/E of 22.66), Ahluwalia Contracts (India) Ltd (with a P/E of 22.97), and B L Kashyap & Sons Ltd (with a P/E of 48.67).
The company’s revenue from operations increased from ₹77.02 crore in fiscal 2022 to ₹154.18 crore in fiscal 2024, representing a Compound Annual Growth Rate (CAGR) of 26%. Additionally, the profit after tax grew from ₹18.78 crore in fiscal 2022 to ₹36.43 crore in fiscal 2024, with a CAGR of 25%.
Garuda Construction and Engineering IPO subscription status
Garuda Construction IPO subscription for the public issue will open at 10:00 IST during Tuesday’s deals.
Garuda Construction IPO Review
Arihant Capital Markets Ltd
As per the brokerage report, Garuda construction has an order book worth ₹14 billion, which is approximately 9 times the revenue of FY24, indicating strong business visibility. The company is committed to maintaining an asset-light model, focusing on high-margin projects, and expanding its market presence. Notably, the company has successfully completed prestigious projects such as the Delhi Police HQ and the Golden Chariot Hotel in Mumbai, demonstrating its strong execution capabilities. At the upper price band of ₹95, the issue is valued at a P/E ratio of 24.24x post issue, based on the FY24 post-issue EPS of ₹3.92. The brokerage has assigned a “Subscribe for listing gains” rating for the issue.
Swastika Investmart Ltd
The brokerage firm highlights the company’s strong order book and diverse projects as its key strengths. Although its PE ratio is in line with industry standards, its return on net worth surpasses that of its peers. While FY23 saw significant growth in revenue and profit, FY24 experienced a slowdown due to the election year. The company’s exposure to risks is a result of its cyclical nature. Investors comfortable with higher risks may want to consider the IPO as an opportunity for potential long-term growth.
Garuda Construction IPO details
Garuda Construction and Engineering IPO consists of 1.83 crore new equity shares and an offer for sale of 95 lakh equity shares by promoter PKH Ventures Ltd.
The fresh issue’s proceeds will be used for fulfilling working capital requirements and general corporate purposes, such as potential inorganic acquisitions.
Corpwis Advisors Private Ltd is the sole book running lead manager for the issue, and Link Intime India Private Ltd is the registrar.
Garuda Construction IPO GMP today
Garuda Construction and Engineering IPO GMP today is +22. This indicates Garuda Construction share price was trading at a premium of ₹22 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Garuda Construction share price is indicated at ₹117 apiece, which is 23.16% higher than the IPO price of ₹95.
Today’s IPO GMP suggests a strong listing, based on the grey market activities from the last 8 sessions. The GMP ranges from ₹0 to ₹22, according to experts at investorgain.com.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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