Garuda Construction and Engineering IPO opens on October 8: Check price band, lot size & more

Garuda Construction and Engineering IPO (Garuda Construction and Engineering Limited IPO) is scheduled to open for subscription on Tuesday, October 8. The construction firm aims to raise ₹264.1 crore via its initial public offering (IPO).

The promoters of the company are Pravinkumar Brijendra Kumar Agarwal, PKH Ventures Limited and Makindian Township Private Limited. The promoters of the company collectively hold a 96.81% stake in the company ahead of the public issue.

Before the opening of the subscription window, here are five key details to know about Garuda Construction and Engineering IPO:

Garuda Construction and Engg IPO: Business model and key competitors

Garuda Construction and Engineering is a civil construction company. It provides end-to-end civil construction services for residential, commercial, residential cum commercial, infrastructure and industrial projects.

The construction firm also provides Operations and Maintenance (O&M) and Mechanical, Electrical, and Plumbing (MEP) services. According to the company’s RHP, it has strong project management and execution capabilities.

As of September 28, 2024, the total order book of the company’s ongoing and pending projects stood at ₹1,408.2 crore.

The company mentioned in its Draft Red Herring Prospectus that its key competitors include companies such as PSP Projects Limited, Capacite Infraprojects Limited, Vascon Engineers Limited, Ahluwalia Contracts (India) Limited and BL Kashyap and Sons Limited.

Garuda Construction and Engg IPO: Offer size, price band and lot size

Garuda Construction IPO is a book-building offer comprising a fresh issue of 1.83 crore shares, amounting to ₹173.85 crore, and an offer-for-sale (OFS) of 95 lakh shares, amounting to ₹90.25 crore.

Garuda Construction and Engg has reserved 50% of the net offer for Qualified Institutional Buyers. As much as 35% of the net issue has been set aside for retail investors, and the remaining 15% will be available for Non Institutional Investors (NIIs).

Garuda Construction and Engineering IPO price band has been fixed at ₹92 to ₹95 apiece.

Retail investors interested in applying for the mainboard issue can place bids for a minimum single lot size of 157 shares, aggregating to an investment of ₹14,915. On the other hand, the minimum lot size for investment for Small Non Institutional Investors (sNII) is 14 lots, or 2,198 shares, which amounts to an investment of ₹2,08,810. The lot size for Big Non-Institutional Investors(bNIIs) is 68 lots, or 10,676 shares, aggregating to an investment of ₹10,14,220.

Garuda Construction and Engg IPO dates

The mainboard issue will be available for subscription from Tuesday, October 8, to Thursday, October 10. The share allotment status of the mainboard issue is likely to be finalised on Friday, October 11.

Subsequent to the finalisation of IPO share allotment, refunds will be initiated for unsuccessful bidders on Monday, October 14, and successful bidders will receive shares of Garuda Construction and Engineering in their demat accounts the same day. Garuda Construction and Engineering shares will be listed on the NSE and BSE. The tentative listing date for the IPO is October 15.

Garuda Construction and Engg IPO: Key financials

Garuda Construction and Engineering’s revenue fell by over 4% to ₹154.47 crore in FY24 compared to ₹161.02 crore in FY23. The company’s profit-after-tax decreased more than 10% to ₹36.44 crore in FY24, compared to ₹40.8 crore in FY23. Garuda Construction and Engineering’s net worth increased over 44% to ₹119.01 crore against ₹82.61 crore in the preceding financial year.

Garuda Construction and Engg IPO: Key strengths

• Garuda Construction and Engineering maintains high construction quality and timely delivery through its project management capacity, using a fleet of modern construction equipment managed through third-party vendors.
• The company employs third-party vendors for equipment and keeps its asset base light, to enhance cost efficiency and minimise operational disruptions.
• The company has a strong track record of successfully completing construction projects, such as the Golden Chariot Vasai Hotel & Spa and Golden Chariot Boutique Hotel in 2015. The company has also undertaken residential projects in Major Maintenance and Repair (MMR) mode and completed two of them between 2017 and 2024.

Garuda Construction and Engg IPO: Risk and threats

• In its DRHP, the company said that while its order book has substantial contracts with unrelated entities and for construction projects, it does not have a large exposure to work orders or Engineering Procurement Contracts (EPC) outside the company’s promoter group entities.
• The company does not have non-compete agreements in place and that exposes it to the risk of related group entities competing directly with Garuda Construction, potentially jeopardising future business opportunities and growth.
• According to the DRHP, its financial condition may be affected if it fails to obtain new contracts, its current contracts are terminated, or it faces delays.
• Garuda Construction and Engineering said that it relies on third parties for services and the supply of raw materials for its projects, and the third party’s inability to provide these could adversely affect the company’s business.

About Garuda Construction and Engineering

Garuda Construction and Engineering Limited was founded in 2010. The company is a provider of comprehensive construction services. The company had 65 permanent employees as of September 28, 2024.