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Garuda Construction and Engineering Ltd IPO

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Synopsis:

Garuda Construction and Engineering IPO offers up to 27.8 million equity shares, with an offer for sale of 9.5 million shares. Opening on October 8, 2024, and closing on October 10, 2024, it seeks to fund expansion and repay debts, with a price band of ₹92-₹95 per share.

Overview of the Company

Garuda Construction and Engineering Limited is a major player in the infrastructure sector in India. Established in 2010, the company specializes in large-scale civil construction, engineering projects, and urban development. It has built a reputation for delivering high-quality projects in sectors like residential complexes, commercial buildings, and infrastructure development.

Core Business and Market Position

Garuda Construction operates across various regions in India, primarily focusing on high-value engineering projects. Its robust order book includes contracts from both government and private clients, ensuring a steady revenue stream. The company’s strong market position in the civil engineering space gives it a competitive edge, with a long-standing presence in the Mumbai Metropolitan Region (MMR).

Garuda Construction and Engineering IPO Details and Objectives

IPO Details

Description

IPO Size

Up to 2,78,00,000 equity shares

Offer for Sale (OFS)

95,00,000 equity shares

Fresh Issue

1,83,00,000 equity shares

Face Value

₹5 per equity share

Offer Price

To be determined

Listing

NSE, BSE

Purpose of the IPO
The IPO proceeds will be utilized to fund the company’s working capital requirements, further expansion into infrastructure projects, and to repay outstanding debts. Additionally, a portion of the funds will be used for general corporate purposes.

Timeline of Garuda Construction and Engineering IPO

Event

Date

IPO Open Date

Tuesday, October 8, 2024

IPO Close Date

Thursday, October 10, 2024

Basis of Allotment Finalization

Friday, October 11, 2024

Initiation of Refunds

Monday, October 14, 2024

Credit of Shares to Demat Accounts

Monday, October 14, 2024

Listing Date

Tuesday, October 15, 2024

Cut-off Time for UPI Mandate Confirmation

5 PM on October 10, 2024

Pricing and Lot Size of Garuda Construction and Engineering IPO

  • Face Value: ₹5 per share
  • Price Band: ₹92 to ₹95 per share

Price Band for the IPO

  • The price band for Garuda Construction and Engineering IPO is set between ₹92 and ₹95 per share, offering investors flexibility in choosing their bid price within this range.

Minimum Lot Size and Application Details

  • Minimum Lot Size: Investors can apply for a minimum of 157 shares, and in multiples thereof.
  • Retail Investor Application:
    • Minimum investment for retail investors is 1 lot, which consists of 157 shares, amounting to ₹14,915.
    • Maximum investment for retail investors is 13 lots (2,041 shares) amounting to ₹193,895.
  • Small HNI Application:
    • Minimum application for small HNIs is 14 lots (2,198 shares), amounting to ₹208,810.
    • Maximum application for small HNIs is 67 lots (10,519 shares), amounting to ₹999,305.
  • Big HNI Application:
    • Minimum investment for large HNIs starts from 68 lots (10,676 shares) and amounts to ₹1,014,220..

How to Apply for the Garuda Construction and Engineering IPO?

Online Application Process

  Step 1: Log in to your Bajaj Broking trading account.
  Step 2: Navigate to the IPO section and select "Garuda Construction and Engineering IPO."
  Step 3: Choose the number of shares and the price within the specified range.
  Step 4: Complete the UPI mandate or ASBA process to block the required funds.
  Step 5: Submit your application.

Financial Health and Performance

Key Financial Metrics

  • Assets: Grew from ₹111.03 crore in FY 2022 to ₹234.84 crore by April 2024, showing steady asset accumulation.
  • Revenue: Decreased by 4%, from ₹161.02 crore in FY 2023 to ₹154.47 crore in FY 2024, reflecting a slight dip in performance.
  • Profit After Tax (PAT): Dropped by 11%, from ₹40.8 crore in FY 2023 to ₹36.44 crore in FY 2024.
  • Net Worth: Increased significantly from ₹41.79 crore in FY 2022 to ₹122.51 crore by April 2024.
  • Reserves and Surplus: Improved from ₹29.34 crore in FY 2022 to ₹85.16 crore by April 2024.

Recent Performance and Growth Prospects

  • Revenue Decline: Garuda Construction's revenue decreased by 4% between FY 2023 and FY 2024 due to market conditions.
  • Profit After Tax: PAT experienced a notable decline of 11% in the same period, impacting overall profitability.
  • Growth Prospects: With increasing assets and a solid net worth, the company is well-positioned for future growth, especially in the infrastructure sector. Expected government contracts may boost future revenue and profitability.

Investment Risks and Opportunities

Potential Risks of Investing in the IPO

  • Exposure to volatile infrastructure markets.
  • Dependency on government contracts could lead to delays.
  • High competition in the engineering sector may affect profitability.

Opportunities and Growth Potential

  • Strong growth in urban infrastructure and housing development.
  • Increasing government spending on public infrastructure projects.
  • Long-term contracts ensuring stable revenue flow.

Key Performance Indicator (KPI)H2: Key Performance Indicator (KPI)

KPI

Value

Market Capitalization

₹883.9 crore

Return on Equity (ROE)

36.14%

Return on Capital Employed (ROCE)

46.69%

Return on Net Worth (RoNW)

30.62%

Price to Book Value (P/BV)

5.97

Profit After Tax (PAT) Margin

23.63%

Garuda Construction and Engineering IPO Registrar

Registrar

Details

Name

Link Intime India Private Limited

Contact Person

Shanti Gopalkrishnan

Telephone

+91 810 811 4949

Email

garudaconstructions.ipo@linkintime.co.in

Garuda Construction and Engineering IPO Lead Managers

Lead Manager

Contact Person

Corpwis Advisors

Nikunj Kanodia

Telephone

+91 22 4972 9990

Email

ipo@corpwis.com

Conclusion

The Garuda Construction and Engineering IPO offers potential investors a glimpse into the company’s financial health and market position. Key performance indicators reflect its operational efficiency and overall business performance. As with any investment, it’s essential for investors to carefully review the company's financials, market trends, and broader economic conditions before making any decisions. A thorough evaluation can help align the investment with individual financial goals and risk tolerance.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

 

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Frequently Asked Questions

What is the Garuda Construction and Engineering IPO date & price?

Answer Field

The Garuda Construction and Engineering IPO opens for subscription on October 8, 2024, and closes on October 10, 2024. The price band is set between ₹92 and ₹95 per share, offering investors flexibility within this range.

What is the Garuda Construction and Engineering IPO and why is it significant?

Answer Field

The Garuda Construction and Engineering IPO is a book-built issue of ₹264.10 crores, combining a fresh issue and an offer for sale. The proceeds from the IPO will help fund the company's growth and provide liquidity to selling shareholders.

How can I apply for the Garuda Construction and Engineering IPO?

Answer Field

You can apply for the Garuda Construction and Engineering IPO through your Demat account by selecting the IPO, entering your bid and UPI details, and confirming the mandate. Ensure you meet the minimum investment requirement of ₹14,915 for 157 shares.

What are the key risks and rewards of investing in the Garuda Construction and Engineering IPO?

Answer Field

Investors should consider potential risks such as market volatility and competition in the construction sector. However, the rewards may include the company’s strong market position and the potential for growth in infrastructure projects.

When will the Garuda Construction and Engineering IPO shares be listed?

Answer Field

The shares of Garuda Construction and Engineering are expected to list on the BSE and NSE on October 15, 2024, subject to final allotment and regulatory approvals.

What documents should I review before investing in the Garuda Construction and Engineering IPO?

Answer Field

Before investing, review the Red Herring Prospectus (RHP), financial statements, and disclosures regarding risks and opportunities. These documents provide detailed insights into the company's performance and future outlook.

Will Garuda Construction and Engineering IPO pay dividends?

Answer Field

The decision to pay dividends will depend on the company's future profitability and financial performance post-IPO. Investors should check the company’s dividend policy in the offer documents for further details.

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