Garuda Construction and Engineering Limited IPO: A Comprehensive Overview
The IPO (Initial Public Offering) landscape continues to evolve with new opportunities for investors looking to diversify their portfolios. One such upcoming offering is the Garuda Construction and Engineering Limited IPO, scheduled to open on October 8, 2024, and close on October 10, 2024. This blog post aims to provide a comprehensive overview of the IPO, including key details, financial performance, potential risks, and an overall investment recommendation.
Garuda Construction and Engineering IPO Details
Key Information
| Detail | Information |
|---|---|
| IPO Open Date | October 8, 2024 |
| IPO Close Date | October 10, 2024 |
| Price Band | ₹92 to ₹95 per share |
| Lot Size | 157 Shares |
| Total Issue Size | ₹264.10 Crores (27,800,000 shares) |
| Fresh Issue | ₹173.85 Crores (1.83 crore shares) |
| Offer for Sale | ₹90.25 Crores (0.95 crore shares) |
| Face Value | ₹5 per share |
| Listing At | BSE, NSE |
| Tentative Listing Date | October 15, 2024 |
Subscription Categories
The Garuda Construction and Engineering IPO will offer shares to different investor categories, as outlined in the table below:
| Investor Category | Shares Offered |
|---|---|
| Qualified Institutional Buyers (QIB) | Not more than 50% of the Net Offer |
| Retail Investors | Not less than 35% of the Net Offer |
| Non-Institutional Investors (NII) | Not less than 15% of the Net Offer |
Allotment Timeline
| Event | Date |
|---|---|
| Basis of Allotment | October 11, 2024 |
| Initiation of Refunds | October 14, 2024 |
| Credit of Shares to Demat | October 14, 2024 |
About Garuda Construction and Engineering Limited
Founded in 2010, Garuda Construction and Engineering Limited specializes in various construction services, including residential, commercial, and infrastructure projects. The company has carved a niche by focusing on high-quality construction services and has developed a solid track record, evidenced by notable projects such as the Golden Chariot Vasai Hotel & Spa and multiple residential initiatives in the Mumbai Metropolitan Region (MMR).
Strengths of Garuda Construction
- Focused Business Approach: The company is dedicated to residential and commercial construction while expanding into industrial and infrastructure projects.
- Proven Track Record: Garuda has successfully completed numerous projects since its inception, reflecting its ability to manage and execute high-quality construction.
- Strong Financial Performance: The company reported a Revenue from Operations of ₹1,187.50 Lacs for the period ending April 30, 2024, showcasing robust growth.
- Increasing Order Book: As of September 28, 2024, Garuda had an impressive order value totaling ₹1,40,827.44 lacs, which is expected to fuel future growth.
Financial Overview
Financial Performance (Restated)
Garuda Construction and Engineering Limited has shown fluctuating financial metrics over the past few years:
| Period Ended | Assets (₹ Cr) | Revenue (₹ Cr) | Profit After Tax (₹ Cr) | Net Worth (₹ Cr) | Reserves and Surplus (₹ Cr) |
|---|---|---|---|---|---|
| 30 Apr 2024 | 234.84 | 11.88 | 3.5 | 122.51 | 85.16 |
| 31 Mar 2024 | 228.49 | 154.47 | 36.44 | 119.01 | 81.65 |
| 31 Mar 2023 | 176.35 | 161.02 | 40.8 | 82.61 | 70.13 |
Key Performance Indicators
| KPI | Value |
|---|---|
| Market Capitalization | ₹883.9 Crores |
| ROE | 36.14% |
| ROCE | 46.69% |
| RoNW | 30.62% |
| P/BV | 5.97 |
| PAT Margin (%) | 23.63% |
Investment Considerations
While Garuda Construction has potential, it’s essential to weigh its financial inconsistencies, notably a 4% revenue decrease and 11% drop in profit between FY 2023 and FY 2024. Concerns about high trade receivables relative to reported revenue must be factored into investment decisions.
Investment Recommendation
Analyst Insights
Dilip Davda’s review suggests a cautious approach towards the Garuda Construction and Engineering IPO. He highlights the company’s historical financial inconsistency and concerns regarding its higher trade receivables than its reported revenues. Additionally, while the company has a sizable order book of ₹1,400+ Cr, the overall pricing of the IPO appears aggressive based on projected earnings for FY 2025.
| Recommendation Summary | Rating |
|---|---|
| Avoid | ⭐️⭐️⭐️⭐️⭐️ |
Conclusion
The Garuda Construction and Engineering IPO presents both opportunities and challenges for potential investors. With a focus on residential and commercial projects, a solid order book, and a history of significant projects, the company has established a reputation in the construction sector. However, the inconsistencies in its financial performance and high levels of receivables should not be overlooked.
As the IPO date approaches, investors should consider conducting further research and assessing their risk tolerance before making investment decisions.
Disclaimer
The information provided in this blog is for educational purposes only and should not be considered as financial advice. Investors are encouraged to conduct their research and consult with financial advisors before making investment decisions. The author does not guarantee the accuracy or completeness of the information and will not be liable for any losses or damages arising from the use of this blog.
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