IPO Debut: Shares of Garuda Construction and Engineering Surge 10% on Listing Day

Garuda Construction’s Tepid Listing 

On October 15, 2024, Garuda Construction and Engineering made a remarkable entry into the stock market. The company’s shares are listed at a premium of 10.5% on the National Stock Exchange (NSE), with an opening price of Rs 105 against the IPO issue price of Rs 95. On the Bombay Stock Exchange (BSE), the shares debuted at Rs 103.20, reflecting an 8.6% premium. By 10:20 AM on listing day, the stock was trading at ₹101.48 on the NSE, showcasing the positive reception by investors.

The upper circuit limit for the stock is set at Rs 126, while the lower circuit is at Rs 84. With the current trading levels, Garuda Construction’s market capitalization stands at Rs 947 crore, and the total trade quantity reached 151.08 lakh shares, reflecting robust trading activity.

Strong Investor Response to IPO

The IPO of Garuda Construction received an enthusiastic response from investors, with the issue being subscribed 7.55 times. Retail investors, in particular, showed immense interest, with the retail portion subscribed 10.81 times. Non-institutional investors also contributed significantly, subscribing their portion 9.03 times, while the qualified institutional buyers’ quota saw 1.24 times subscription.

The impressive subscription levels highlight investor confidence in the company’s future prospects, driven by its strong order book and solid reputation in the civil construction sector.

Fundraising and Utilization of IPO Proceeds

Garuda Construction raised approximately Rs 264.10 crore through its IPO, which included a fresh issue of 1.83 crore equity shares, amounting to Rs 173.85 crore, and an offer for sale of 95 lakh equity shares worth Rs 90.25 crore. Prior to the public offering, the company had already raised ₹75 crore from institutional investors through the anchor book process.

The proceeds from the fresh issue will primarily be used for working capital requirements, with Rs 100 crore allocated for this purpose. The remaining funds will be directed toward general corporate purposes and potential inorganic acquisitions that the company may pursue to fuel its growth.

Promising Order Book and Future Outlook

Garuda Construction’s order book currently stands at Rs 1,408 crore, positioning the company well for future growth. The strong demand during the IPO and the company’s strategic allocation of funds is expected to bolster its operational capabilities and expand its footprint in the civil construction sector.

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.