Garuda Construction and Engineering Limited IPO: Key Details and Subscription Status

Garuda Construction and Engineering Limited, a Mumbai-based Engineering, Procurement, and Construction (EPC) company, has recently launched its initial public offering (IPO). The IPO aims to raise up to Rs 264.1 crore, with a fresh issue of Rs 173.85 crore and an offer for sale of Rs 90.25 crore.

Issue Details

The IPO opened on October 8, 2024, and will close on October 10, 2024. The issue price is set between Rs 92 to Rs 95 per share, with a minimum lot size of 157 shares.

The funds raised from the IPO will be utilized for working capital requirements, general corporate expenses, and unidentified inorganic acquisitions. Specifically, Rs 100 crore will be allocated towards working capital requirements.

Subscription Status

As of the second day of the IPO, the subscription status is as follows: Qualified institutional buyers have subscribed 0.02 times, non-institutional investors have subscribed 1.35 times, and retail investors have subscribed 4.20 times. Overall, the IPO has been subscribed 2.34 times as of 10:15 a.m. on Wednesday.

Grey Market Premium (GMP)

The grey market premium (GMP) of Garuda Construction and Engineering was Rs 5 as of 6:30 a.m., implying a 5.26% gain over the IPO price. This indicates a slight uptick in the GMP, although it is essential to note that GMP is not an official price quote and is based on speculation.

Listing Details

The shares of Garuda Construction and Engineering will list on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The tentative listing date is fixed as Tuesday, October 15, 2024.

Company Profile

Garuda Construction and Engineering provides end-to-end civil construction services for residential, commercial, residential cum commercial, infrastructure, and industrial projects. The company has reported growth in revenue from operations, with Rs 154.17 crore in fiscal 2024, Rs 160.6 crore in fiscal 2023, and Rs 77 crore in fiscal 2022.

Expert's Take

Tarun Singh, Founder and MD of Highbrow Securities, has expressed caution regarding the IPO. He noted that the company's finances have been marked by significant fluctuations, leading to average results. Additionally, substantial unpaid customer invoices pose a significant cash flow risk, compounded by its group company PKH Ventures' failed IPO attempt in July 2023.

Investors are advised to carefully scrutinize the IPO due to these concerns and to consult with financial advisors before placing bids.

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