Garuda Construction IPO Attracts Strong Investor Interest with 7.55x Subscription

Team FS

    10/Oct/2024

What's covered under the Article:

1. Garuda Construction and Engineering IPO witnessed a remarkable 7.55x subscription, driven mainly by retail investors.

2. The company aims to raise approximately ₹264.10 crore through the IPO, with substantial backing from institutional investors.

3. With a robust order book of ₹1,408 crore, Garuda's financials show impressive growth and increasing profitability.

Garuda Construction and Engineering has captured the attention of investors with its Initial Public Offering (IPO), which was subscribed 7.55 times by the end of its bidding period today, October 10. This remarkable interest highlights the strong demand primarily from retail and non-institutional investors. The three-day bidding process, which commenced on October 8, concluded successfully, showcasing the appetite for investment opportunities in the civil construction sector.

The IPO saw a significant portion of its non-institutional investors’ quota being subscribed 9.03 times, while retail investors exhibited an impressive subscription of nearly 10.81 times. In contrast, the portion reserved for qualified institutional buyers (QIBs) saw a subscription of 1.24 times. This diverse interest across different investor categories underscores the confidence in Garuda Construction’s growth potential.

Garuda Construction aims to raise around ₹264.10 crore through its IPO, which includes a fresh issue of up to 1.83 crore equity shares amounting to ₹173.85 crore and an offer for sale of up to 95 lakh equity shares aggregating to ₹90.25 crore. The proceeds from the fresh issue are earmarked for various purposes, including ₹100 crore towards working capital requirements and the remainder for general corporate purposes, which may include strategic inorganic acquisitions.

The company has already garnered ₹75 crore from institutional investors through its anchor book. Notably, AG Dynamic Funds emerged as the largest buyer, acquiring 21.05 lakh shares valued at ₹20 crore. Other significant investors, such as Trust Mutual Fund, Maybank Securities, and Bridge India Fund, each purchased 10.52 lakh shares worth ₹10 crore. The smallest buyer in this category was Cognizant Capital Dynamic Opportunities Fund, which picked up 5.26 lakh shares for ₹5 crore.

The shares of Garuda Construction are being offered in a fixed price band of ₹92 to ₹95 per equity share. In the unlisted market, the shares were trading flat today, with the grey market premium (GMP) recorded at ₹5, or 5.26%, relative to the upper limit of the price band on October 8. This reflects the market’s anticipation and interest surrounding the IPO, particularly as it moves toward allotment.

The company's financials have shown promising growth, with revenue from operations increasing from ₹77 crore in fiscal 2022 to ₹154 crore in fiscal 2024, representing a compound annual growth rate (CAGR) of 26.03%. Likewise, the profit after tax surged from ₹18.78 crore to ₹36 crore during the same period, achieving a CAGR of 24.72%. For the month ending April 2024, the revenue was reported at ₹11.87 crore, with a profit after tax of ₹3.50 crore. Garuda’s current order book stands impressively at ₹1,408 crore, reflecting its robust business pipeline.

Corpwis Advisors is the sole book-running lead manager for the IPO, while Link Intime India acts as the registrar. The allotment of shares for Garuda Construction and Engineering is expected to be finalized on October 11, 2024, with the tentative listing date set for October 15, 2024, on both BSE and NSE.

For investors keen on IPOs, the recent activity surrounding Garuda Construction and Engineering offers valuable insights into market trends and investor sentiment. Those looking to explore more about the IPO landscape can refer to our dedicated section for the best IPOs to apply now - Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

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