Garuda Construction and Engineering Pvt. Ltd. is a highly regarded EPC (Engineering, Procurement, and Construction) specialist with a wealth of experience. The company offers turnkey solutions across various sectors, focusing on delivering quality and exceeding expectations. The upcoming Garuda Construction and Engineering IPO presents an opportunity for investors to be part of a rapidly growing enterprise.

This Book Built Issue amounts to ₹264.1 Crores, consisting of a Fresh Issue of 183.00 Lakh Shares valued at ₹173.85 Crores and an Offer for Sale of 95.00 Lakh Shares, totaling ₹90.25 Crores. The subscription period opens on October 08, 2024, and closes on October 10, 2024. Corpwis Advisors Private Limited is the book-running lead manager, while Link Intime Private Limited will serve as the registrar for the IPO.

IPO Price and Allotment Details:

The price band for the Garuda Construction IPO is set at ₹92 to ₹95 per share, with a minimum investment lot size of 157 shares, amounting to a retail investor requirement of ₹14,915. High-Net-Worth Individuals (HNIs) must invest a minimum of 14 lots (2,198 shares), with a minimum investment of ₹2,08,810. The allotment date for this IPO is October 11, 2024, with shares expected to list on the BSE and NSE by October 15, 2024.

The issue is designed to raise funds primarily for working capital requirements (₹10,000.00 Lakhs) and general corporate expenses, with provisions for potential inorganic acquisitions.

Subscription Status and Grey Market Premium (GMP):

As of 7:00 PM on October 10, 2024, the live subscription status shows that the Garuda Construction and Engineering IPO has been subscribed 7.55 times, reflecting substantial demand from investors. For real-time updates, you can check the Garuda Construction IPO Live Subscription Status on the BSE website.

Interestingly, the Grey Market Premium (GMP) for Garuda Construction and Engineering Limited IPO is ₹0, which means no trading activity is anticipated on this front. It's important to note that the GMP serves as an informal indicator, but it should not be the sole factor driving investment decisions. No price discovery is expected before the shares officially list on the stock exchange.

Anchor Investor Allocation:

Garuda Construction and Engineering Limited secured ₹75.00 Crore from Anchor Investors at ₹95 per share before the public subscription phase. The company allocated 78,95,138 equity shares to these institutional investors. This allocation reflects confidence in the company from key financial players.

Financial Performance and Valuation:

Garuda Construction and Engineering has demonstrated steady financial growth over the years. The company's revenue for FY24, FY23, and FY22 stood at ₹15,446.88 Lakhs, ₹16,102.41 Lakhs, and ₹7,702.79 Lakhs, respectively. The EBITDA for the same periods was ₹5,008.56 Lakhs (FY24), ₹5,599.17 Lakhs (FY23), and ₹2,716.85 Lakhs (FY22). The Profit after Tax (PAT) shows a consistent upward trend, with figures of ₹3,643.53 Lakhs for FY24, ₹4,079.53 Lakhs for FY23, and ₹1,878.22 Lakhs for FY22.

For this IPO, Garuda Construction has a pre-issue EPS of ₹4.87 and a post-issue EPS of ₹3.91. The pre-issue P/E ratio is 19.50x, while the post-issue P/E ratio is 24.29x. The company's Return on Capital Employed (ROCE) for FY24 stands at 41.73%, and its Return on Equity (RoE) for the same period is 30.62%. Compared to the industry P/E ratio of 27.58x, the Garuda Construction IPO is competitively priced, though slightly above average in valuation.

Should You Invest?

Despite the solid financial performance, Garuda Construction and Engineering's IPO shows no GMP movement, signaling zero listing gains. While the company has a healthy growth trajectory and offers significant ROCE and RoE, its valuation may deter investors looking for quick returns. As such, we recommend investors avoid this IPO for both listing gains and long-term investment. The current market environment, coupled with a flat Grey Market Premium, suggests that the IPO may not offer substantial returns post-listing.

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