Garuda Construction and Engineering Limited, a prominent player in the construction industry, recently concluded its initial public offering (IPO). The IPO, which opened for subscription on October 8 and closed on October 10, has garnered significant attention from investors. However, the response was somewhat muted compared to other recent IPOs. In this article, we will delve into the allotment status of the Garuda Construction and Engineering IPO, provide a step-by-step guide on how to check the allotment status, and discuss the implications of the grey market premium (GMP) and listing date.
1. Overview of the Garuda Construction and Engineering IPO
The Garuda Construction and Engineering IPO aimed to raise 264.10 crore through a mix of fresh issue and offer-for-sale (OFS). The fresh issue consisted of 1.83 crore equity shares aggregating to 173.85 crore, while the OFS included 95 lakh equity shares amounting to 90.25 crore. The IPO price band was fixed at 90 to 95 per share, with a minimum lot size of 157 shares for retail investors.
The IPO received an overall subscription of 7.55 times, with retail investors showing keen interest by subscribing 10.81 times. Non-institutional investors also subscribed 9.03 times, while qualified institutional buyers (QIBs) bid 1.24 times. This indicates a strong response from retail investors but a relatively subdued response from institutional investors.
2. How to Check the Allotment Status
Investors who have bid for the Garuda Construction and Engineering IPO can check their allotment status online through two primary channels: the BSE website and the website of Link Intime India Private Ltd, the registrar for the issue.
2. **Select IPO/FPO**: Choose 'Garuda Construction and Engineering' from the dropdown menu.
3. **Select Verification Mode**: Select either PAN, Application Number, DP/Client ID, or Account Number/IFSC to verify your allotment status.
4. **Enter Details and Submit**: Enter the required information based on your selection above and complete the Captcha accurately before hitting submit.
3. Implications of Grey Market Premium (GMP)
The grey market premium (GMP) for Garuda Construction and Engineering has seen a significant drop due to the lackluster investor interest. The latest reports suggest that the company is not commanding any premium in the unofficial market, indicating a minimal listing gain for investors.
This sharp correction in GMP reflects the muted investor response to the IPO. Typically, a higher GMP indicates strong market anticipation and potential listing gains. However, in this case, it suggests that investors may not expect substantial price appreciation upon listing.
4. Listing Date and Timeline
The shares of Garuda Construction and Engineering are set to list on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Tuesday, October 15, 2024.
Investors who have successfully bid for shares can expect notifications regarding the debit of their funds or revocation of their IPO mandate either over the weekend or by Monday, October 14. Refunds will also be initiated for unsuccessful bidders on Monday, October 14.
The company plans to utilize the funds raised via the public issue for working capital requirements, general corporate expenses, and funding inorganic acquisitions.
5. Financial Performance and Order Book
Garuda Construction and Engineering has shown robust financial performance in recent years. The company's revenue from operations rose from 77.02 crore in FY22 to 154.18 crore in FY24, registering a Compound Annual Growth Rate (CAGR) of 26%. Profit after tax increased from 18.78 crore in FY22 to 36.43 crore in FY24, growing at a CAGR of 25%.
The company is currently engaged in civil construction projects including residential, commercial, industrial, and infrastructure projects. It has an order book of 1,408.27 crore as of the latest available data.
Despite these positive indicators, brokerage firms have raised concerns about the company's sluggish financial performance and cyclical nature of its business. Additionally, negative cash flows have been a major concern for investors.
Conclusion
In conclusion, while Garuda Construction and Engineering has demonstrated strong financial performance and a robust order book, the muted investor response and lackluster GMP suggest caution for potential investors. It is essential for investors to thoroughly review the red herring prospectus and consult with financial advisors before making any investment decisions.
By following the steps outlined above to check the allotment status and understanding the implications of the GMP and listing date, investors can make informed decisions about their participation in this IPO.
