Garuda Construction and Engineering Pvt. Ltd. is a reputable name in the construction sector, offering comprehensive Engineering, Procurement, and Construction (EPC) services. With an extensive background and a robust track record, Garuda has become a trusted partner for delivering turnkey solutions that consistently exceed client expectations.

The IPO for Garuda Construction and Engineering is a Book Built Issue amounting to ₹264.1 crores, which includes a fresh issue of 183.00 lakh shares worth ₹173.85 crores and an offer for sale of 95.00 lakh shares totaling ₹90.25 crores. The subscription period opened on October 08, 2024, and will close on October 10, 2024. Allotment is expected to be finalized on or about October 11, 2024, with shares listed on the BSE and NSE on a tentative date of October 15, 2024.

The share price band for the IPO is set between ₹92 and ₹95 per equity share, requiring a minimum investment of ₹14,915 for retail investors purchasing 157 shares. For High-Net-Worth Individuals (HNIs), a minimum investment of ₹2,08,810 is necessary for 14 lots (2,198 shares).

Corpwis Advisors Private Limited acts as the book-running lead manager, while Link Intime Private Limited is the registrar for the issue.

Grey Market Premium and Subscription Status

As of now, the Grey Market Premium (GMP) for Garuda Construction and Engineering shares is anticipated to be ₹0, based on the company's financial performance. The GMP is often an indicator of potential listing gains but is subject to fluctuations based on demand and supply dynamics in the unregulated market.

As of 02:00 PM on October 09, 2024, the IPO subscription status shows that the IPO has been subscribed 3.32 times on its second day, reflecting solid interest from investors.

Anchor Investor Participation

Garuda Construction and Engineering has successfully raised ₹75.00 crore from anchor investors, allocating 78,95,138 equity shares at the upper price of ₹95 per share. This substantial backing from institutional investors underscores confidence in the company’s prospects.

Allotment Process

The allotment date for the Garuda Construction and Engineering IPO is scheduled for October 11, 2024. Investors can check their allotment status by visiting the registrar’s website and entering their application number, PAN, or DP Client ID.

Objectives of the IPO

The proceeds from the fresh issue will be utilized for:

₹10,000.00 Lakhs for working capital requirements.

General corporate expenses and unidentified inorganic acquisitions.

Financial Performance Overview

Garuda Construction and Engineering has demonstrated strong financial growth, with revenues reaching ₹15,446.88 lakhs in Fiscal Year 2024, compared to ₹16,102.41 lakhs in Fiscal Year 2023 and ₹7,702.79 lakhs in Fiscal Year 2022. The EBITDA figures also reflect positive trends, with ₹5,008.56 lakhs recorded in FY2024. The profit after tax stood at ₹3,643.53 lakhs for FY2024, marking consistent growth over the years.

For the IPO, Garuda Construction and Engineering is offering shares with a pre-issue EPS of ₹4.87 and a post-issue EPS of ₹3.91. The pre-issue P/E ratio is 19.50x, and the post-issue P/E ratio is 24.29x, which is competitive compared to the industry P/E ratio of 27.58x. The company boasts a ROCE of 41.73% and a RoE of 30.62%, suggesting that the IPO is fairly priced.

Conclusion

Given the current financial metrics and market conditions, it is advisable for investors to approach the Garuda Construction and Engineering Limited IPO with caution, as the GMP indicates limited immediate listing gains. 

The current active IPO is  Shiv Texchem Limited IPO, Garuda Construction and Engineering Limited IPO.

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