| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 92 to ₹ 95 | 157 | 08th Oct, 2024 – 10th Oct, 2024 | ₹ 264.10 Cr |
About Garuda Construction and Engineering Ltd IPO
Garuda Construction and Engineering, a subsidiary of PKH Ventures, specializes in offering end-to-end civil construction services across various sectors, including residential, commercial, infrastructure, industrial, and hospitality projects. The company’s expertise covers a wide range of construction activities, such as the development of residential and commercial complexes, industrial facilities, and infrastructural works, as well as hospitality buildings. The services span the full spectrum of construction processes, from detailed route surveys, engineering, and design to resource mobilization, micro-scheduling, and obtaining construction permissions. This includes soil and water testing, contractor and manpower hiring, procurement of materials, laboratory testing, and the execution of construction activities in line with approved project plans. In addition, the company procures concrete building structures and composite steel structures through a network of sub-contractors based on designs provided either by developers or by in-house engineering teams. Beyond construction, the company also offers a range of supplementary services, such as Operations and Maintenance (O&M) services, Mechanical, Electrical, and Plumbing (MEP) services, and finishing works, ensuring a comprehensive suite of construction solutions under one roof.
Objective of the Garuda Construction and Engineering Ltd IPO
The net proceeds from the fresh issue will be used towards the following purposes:
- Working capital requirements and;
- General corporate purposes and unidentified inorganic acquisitions.
Rationale To Invest In Garuda Construction and Engineering Ltd IPO
Exclusive and focused business approach
The primary focus of the company is civil construction of residential and commercial buildings, with recent expansion into industrial and infrastructural projects. This specialized approach has allowed the company to build a skilled team with domain-specific knowledge and experience, while developing core competencies and technical expertise in the construction industry. The company’s capabilities in civil construction position it as a provider of comprehensive construction services, primarily focusing on building construction rather than land or infrastructure development. However, the company has entered a Memorandum of Understanding (MoU) to act as a joint developer for a residential project in Thane, Maharashtra, which has yet to commence. Additionally, the company has agreements for other projects where it will assume the role of a developer. The company’s concentrated focus on building construction has strengthened its order book, resulting in a high degree of specialization in the field, contributing to the growth of operating revenues and profits
Visible growth through increasing order book
In the construction industry, an order book is a key indicator of future performance as it reflects a portion of anticipated future revenue and provides a list of projects undertaken and to be undertaken by the company. Maintaining an order book allows the company to evaluate and improve the quality of its projects. The company aims to select projects with higher margins and those that enhance its reputation, market penetration, and perception. The quality of construction and strong client relationships have contributed to the growth of the company’s order book. As of the filing of the Red Herring Prospectus, the total contract value of the company’s ongoing and upcoming projects amounts to Rs. 1,408.3 Crores. With projects across the Mumbai Metropolitan Region (MMR), Arunachal Pradesh, Karnataka, Rajasthan, and Punjab, the growing number of construction works supports the company’s continued growth and enhanced reputation
Valuation of Garuda Construction and Engineering Ltd IPO
The company provides complete civil construction services across different sectors, including residential, commercial, infrastructure, industrial, and hospitality projects. Its main focus has been on building residential and commercial properties, but now it is expanding into industrial and infrastructure projects as well. The company has a solid track record of successfully completing various types of construction projects, such as residential, commercial, and hospitality buildings. The construction sector plays a big role in India’s economy, being the second-largest contributor after agriculture. In FY23, it made up 8.4% of the country’s total Gross Value Added (GVA). From FY18 to FY23, the sector grew at an average yearly rate of 10.6%, increasing from Rs. 2,37,500 crores to Rs. 3,92,200 crores. The sector is expected to continue growing, reaching Rs. 6,49,400 crores by FY30, with a yearly growth rate of 7.5%. With rising demand for infrastructure and strong government support, India could become the third-largest construction market in the world, and the sector could contribute 15% to the economy by 2030. Financially, the company’s revenue doubled from Rs. 77.0 crores in FY22 to Rs. 154.2 crores in FY24, showing an impressive annual growth rate of 26.0%. Its profit after tax also grew from Rs. 18.8 crores in FY22 to Rs. 36.4 crores in FY24, with an annual growth rate of 24.7%. The average debt-to-equity ratio of other companies in the industry ranged between 0.23x and 0.66x during FY19-FY23, but in FY23, company has reduced its debt & is debt-free. With an order book worth Rs. 1,408 crores, which is 9.2 times its sales, and an IPO priced at a reasonable Price-to-Earnings (P/E) ratio of 19.5x based on FY24 earnings, we recommend a “SUBSCRIBE” rating for this IPO from a long-term perspective
What is the Garuda Construction and Engineering Ltd IPO?
Garuda Construction and Engineering IPO is a book built issue of Rs 264.10 crores. The issue is a combination of fresh issue of 1.83 crore shares aggregating to Rs 173.85 crores and offer for sale of 0.95 crore shares aggregating to Rs 90.25 crores. Login to your account now.
How to apply for the Garuda Construction and Engineering Ltd IPO through StoxBox?
To apply for the Garuda Construction and Engineering Ltd IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Garuda Construction and Engineering Ltd IPO open?
Garuda Construction and Engineering Ltd IPO is opening on 08th October 2024. .Apply Now
What is the lot size of the Garuda Construction and Engineering Ltd IPO?
The Lot Size of Garuda Construction and Engineering Ltd IPO is 157 equity shares. Login to your account now
When is the Garuda Construction and Engineering Ltd IPO allotment date?
The allotment Date for Garuda Construction and Engineering Ltd IPO is 11th October 2024. Login to your account now.
When is the Garuda Construction and Engineering Ltd IPO listing date?
The listing Date for Garuda Construction and Engineering Ltd IPO is 15th October 2024. Login to your account now
What is the minimum investment required for the Garuda Construction and Engineering Ltd IPO?
In the Retail segment the minimum investment required is Rs. 14,915. Login to your account now
What is the maximum investment allowed for the Garuda Construction and Engineering Ltd IPO?
In the Retail segment the maximum investment requirement is Rs. 193,895. Login to your account now
What are the risks associated with investing in the Garuda Construction and Engineering Ltd IPO?
- As a construction company, the limited experience in working with third-party entities outside of the promoter group presents challenges to the company’s growth. If the company is unable to establish a strong presence as a developer or contractor beyond group companies and related entities, its long-term growth, operational performance, and profitability could be restricted. A significant portion of the company’s revenue is dependent on construction projects linked to group companies and promoters, contributing 100.00% for the period ended April 30, 2024, 44.82% for Fiscal 2024, 94.62% for Fiscal 2023, and 86.65% for Fiscal 2022
- One of the company’s promoters, Mr. Pravin Kumar Brijendra Kumar Agarwal, is involved in a criminal case filed by the Airport Police Station, which is still pending before the Metropolitan Magistrate in Andheri, Mumbai. If any negative outcome arises from this case, it could impact the reputation of the promoter and, in turn, affect the company’s business.
- The promoter group, PKH Ventures Limited, had to withdraw its previous IPO because it wasn’t fully subscribed. The Draft Red Herring Prospectus was filed on March 23, 2022, to list shares on the National Stock Exchange and Bombay Stock Exchange. Although the Non-Institutional Investor category was oversubscribed, the Qualified Institutional Buyers (QIBs) didn’t meet their commitments, so the overall subscription fell short. Since the 90% minimum subscription wasn’t reached, PKH Ventures Limited decided to withdraw the IPO and informed the Registrar of Companies, National Stock Exchange, and Bombay Stock Exchange.
When will the Garuda Construction and Engineering Ltd IPO shares be credited to my Demat account?
The Garuda Construction and Engineering Ltd IPO be credited to the account on allotment date which is 14th October 2024. Login to your account now
Where can I find the Garuda Construction and Engineering LtdI PO prospectus?
The prospectus of Garuda Construction and Engineering Ltd IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Garuda Construction and Engineering LtdIPO?
| IPO Open Date | Tuesday, October 8, 2024 |
| IPO Close Date | Thursday, October 10, 2024 |
| Basis of Allotment | Friday, October 11, 2024 |
| Initiation of Refunds | Monday, October 14, 2024 |
| Credit of Shares to Demat | Monday, October 14, 2024 |
| Listing Date | Tuesday, October 15, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on October 10, 2024 |
