Garuda Construction & Engineering IPO Set to Launch on October 8

Garuda Construction and Engineering, a subsidiary of PKH Ventures, is set to launch its initial public offering (IPO) for subscription starting October 8. The price band for the offering has been set between Rs.92 and Rs.95 per share, with the company looking to raise approximately Rs.264.1 crore through this public issue.

IPO Structure & Subscription Details

This IPO comprises 2.78 crore equity shares, which includes a fresh issue of 1.83 crore shares worth about Rs.173.85 crore and an offer-for-sale (OFS) of 95 lakh shares by PKH Ventures valued at Rs.90.25 crore. The subscription period will close on October 10, while the anchor book will open on October 7 for qualified institutional buyers (QIBs). In an allocation strategy, 50% of the IPO is reserved for QIBs, 15% for non-institutional investors, and the remaining 35% for retail investors.

The Garuda Construction and Engineering IPO allotment is expected to be finalised on October 11, 2024. Investors who applied for the IPO can check their IPO allotment status on the Link Intime India website, the IPO’s official registrar.

Order Book & Overview

Garuda Construction is into a variety of civil construction services, including projects in residential, commercial, infrastructure, and hospitality sectors. Alongside, they offer operations and maintenance (O&M) services, as well as mechanical, electrical, and plumbing (MEP) solutions. With an order book standing at Rs.1,408.27 crore as of September 28, 2024, the company seems positioned to expand in the construction industry.

Financials &  Prospects

However, it is to be noted that Garuda’s financial performance has been a bit shaky. In FY24, the company’s net profit fell by 10.7% to Rs.36.4 crore, down from Rs 40.8 crore the previous year. Similarly, revenue from operations dipped 4% to Rs.154.2 crore. The EBITDA margin also declined, dropping 230 basis points to 32.3%.

Despite these challenges, the company has a strong project management track record, successfully completing projects like the Golden Chariot Vasai Hotel & Spa. As Garuda prepares for its market debut, it aims to use Rs.100 crore from the fresh issue to boost working capital, with the remaining funds set aside for corporate expenses and potential acquisitions.

Conclusion: Garuda Construction IPO just around the corner, the IPO aims to attract investor interest and establish a presence on the stock exchange. As the subscription window opens, market watchers will be keen to see how this turns out.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.