Garuda Construction’s IPO Set to Make a Strong Entrance in the Market

Garuda Construction’s IPO: Today marks the debut of Garuda Construction and Engineering Ltd in the primary market. The company, which specializes in civil construction services, raised. Rs. 75 crore from anchor investors on October 7, ahead of its initial public offering (IPO).

IPO Details

• Price Band: Rs. 92-95 per share
• Total Offer Value: Rs. 264.10 crore
• Subscription Dates: From today, October 8, to October 10
• Allocation:
  • 50% for qualified institutional buyers (QIBs)
  • 35% for retail investors
  • 15% for non-institutional investors (NIIs)

Investors can bid for a minimum of 157 equity shares, with additional shares in multiples of 157.

Company Profile

Garuda Construction provides full-service civil construction for various residential, commercial, and infrastructure projects. Their work involves constructing concrete and composite steel structures for diverse uses such as housing and hospitality.

Financial Performance

According to the red herring prospectus (RHP):

• Revenue Growth: Increased from Rs. 77.02 crore in FY 2022 to. 154.18 crore in FY 2024, a CAGR of 26%.
• Profit Growth: Rose from Rs. 18.78 crore in FY 2022 to. 36.43 crore in FY 2024, with a CAGR of 25%.

Market Comparisons The company's listed peers include:

• PSP Projects Ltd (P/E: 20)
• Capacite Infraprojects Ltd (P/E: 23.61)
• Vascon Engineers Ltd (P/E: 22.66)
• Ahluwalia Contracts (India) Ltd (P/E: 22.97)
• B L Kashyap & Sons Ltd (P/E: 48.67)

Use of Proceeds The funds from the fresh issue will be used for working capital needs and general corporate purposes, including potential acquisitions.

Market Sentiment As of today, Garuda Construction's grey market premium (GMP) is 22, suggesting strong demand. This indicates that the shares were trading at a premium of Rs. 22 in the grey market, which implies an estimated listing price of Rs. 117 per share—23.16% higher than the upper IPO price of Rs. 95.

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Today's IPO is generating positive sentiment in the market, and experts believe it may lead to a strong listing based on the grey market activity over the past week. Investors are interested in Garuda Construction, reflecting confidence in its growth potential.