On October 15, 2024, shares of Garuda Construction and Engineering Pvt. Ltd. made a commendable entry into the market, listing at ₹105 on the National Stock Exchange (NSE), which translates to a 9.5% increase from its initial public offering (IPO) price of ₹95. On the Bombay Stock Exchange (BSE), the shares opened at ₹103.20, reflecting an 8.63% gain over the issue price. This positive market reception highlights investor confidence in the company's operational capabilities and growth prospects.

Garuda Construction and Engineering is an EPC (Engineering, Procurement, and Construction) specialist, recognized for its expertise in delivering turnkey solutions across diverse sectors. The company aims to establish itself as a trusted partner in the construction industry, leveraging its extensive experience and a proven track record to exceed client expectations.

IPO Details and Subscription Highlights

The Garuda Construction and Engineering IPO, valued at ₹264.1 crores, comprised a fresh issue of 183.00 lakh shares worth ₹173.85 crores, alongside an offer for sale of 95.00 lakh shares totaling ₹90.25 crores. The IPO subscription period was open from October 08 to October 10, 2024, with allotment expected to be finalized by October 11, 2024.

The share price band was set between ₹92 to ₹95, with a minimum lot size of 157 shares. For retail investors, the minimum investment requirement was ₹14,915, while High-Net-Worth Individuals (HNIs) were required to invest in 14 lots, amounting to ₹2,08,810.

The company had a substantial backing from anchor investors, raising ₹75.00 crores at the upper price band of ₹95. A total of 78,95,138 equity shares were allocated to these institutional investors, reflecting strong confidence in the company's future.

Garuda Construction and Engineering IPO Live Subscription Status

As of 7:00 PM on October 10, 2024, the live subscription status of the Garuda Construction and Engineering IPO showed that it was oversubscribed by 7.55 times. This level of demand indicates strong interest from both retail and institutional investors, a positive signal for the company's market debut.

Understanding Grey Market Premium

The Grey Market Premium (GMP) for Garuda Construction and Engineering was reported at ₹0. It is important to note that GMP is often used to gauge potential listing gains but can be influenced by various factors including market conditions and supply-demand dynamics. The grey market operates in an unregulated environment, making it less reliable for actual pricing before an IPO’s listing.

Objectives of Garuda Construction and Engineering Limited IPO

The funds raised from the fresh issue will primarily be utilized for:

Working Capital Requirements - ₹10,000.00 lakhs

General Corporate Expenses and unidentified inorganic acquisitions.

Financial Performance Overview

Garuda Construction has demonstrated a robust financial performance over the past few years:

Revenue for Fiscal Years 2024, 2023, and 2022 was ₹15,446.88 lakhs, ₹16,102.41 lakhs, and ₹7,702.79 lakhs, respectively.

EBITDA figures for the same years were ₹5,008.56 lakhs, ₹5,599.17 lakhs, and ₹2,716.85 lakhs, respectively.

Profit after Tax for the three fiscal years stood at ₹3,643.53 lakhs, ₹4,079.53 lakhs, and ₹1,878.22 lakhs.

These figures illustrate steady growth, positioning the company favorably in the competitive landscape.

For the Garuda Construction and Engineering IPO, the company reported a pre-issue EPS of ₹4.87 and a post-issue EPS of ₹3.91. The pre-issue P/E ratio was calculated at 19.50x, while the post-issue P/E ratio was 24.29x, providing a comparative insight against the industry average P/E of 27.58. The Return on Capital Employed (ROCE) for FY24 is reported at 41.73%, and the Return on Equity (RoE) stands at 30.62%. These metrics indicate a fair valuation for the IPO.

Investment Recommendation

Despite the strong debut and appealing financial metrics, analysts recommend caution regarding investments in Garuda Construction and Engineering Limited IPO for both short-term gains and long-term holdings. Given the zero GMP and the mixed market signals, the recommendation leans towards avoiding the IPO for speculative trading or long-term investments.

Allotment Status Check Guide

For investors who participated in the IPO, the allotment date is scheduled for October 11, 2024. Investors can check their allotment status by following these steps:

Visit the IPO allotment status page.

Select Garuda Construction and Engineering Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the information to view your allotment status.

This streamlined process allows investors to quickly confirm their allotment and make informed decisions regarding their investments.

In conclusion, the successful listing of Garuda Construction and Engineering shares highlights investor confidence and the company's strong position in the construction sector. As it navigates through market challenges and opportunities, stakeholders will be keen to observe how the company evolves and capitalizes on its recent public offering.

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