Garuda Construction and Engineering IPO: Key Highlights and Investment Perspective 2024.

Garuda Construction and Engineering’s IPO shall open on 8th October 2024 and close on 10th October 2024, with a total issuance of 27.8 million equity shares for ₹264.10 crores. The Garuda Construction and Engineering IPO includes a fresh issuance of ₹173.85 cr and an offer-for-sale of ₹90.25 cr. Garuda Construction and Engineering Ltd., in contrast, will issue its shares at an issue price band of ₹92-95 per share, carrying a minimum lot size for allotment to retail investors of 157 shares-the investment needed here is as low as ₹14,915. Its scrip will be enlisted on both BSE and NSE on October 15, 2024.
Garuda Construction and Engineering Limited is one of the respected construction companies, which was found in 2010 and currently operates as a high-end house construction company to commercial and industrial infrastructure. MEP and O&M services are provided by the company.

Strengths of Garuda Construction and Engineering

Evidence of Success: Garuda has delivered projects across most sectors, with sizeable contributions to housing and commercial buildings in MMR, Karnataka and Tamil Nadu.
Increasing Market Footprint: The fact that Garuda is focusing on industrial and infrastructure projects, including hospitality and commercial development, is a reflection of its future growth prospects.
Good Financials: The company during FY 2023 registered revenues of ₹160.68 crores and PAT at ₹40.8 crores with healthy financials.

About Garuda Construction and Engineering IPO

IPO Open Date-October 8th, 2024
IPO Close Date -October 10th, 2024
Price Band-Negotiates @ ₹ 92 to ₹ 95
Lot Size – 157 Nos
Issue Size- ₹ 264.10 Crore
Fresh Issue- ₹ 173.85 Crore
Sale Offer- ₹ 90.25 Crore
Listing Date -October 15th, 2024
Minimum Investment -₹ 14,915 for one lot
Lead Manager -Corpwis Advisors Private Limited
Registrar: Link Intime India Private Ltd
IPO Time Table
IPO Opens on: October 8, 2024
IPO Closes on: October 10, 2024
Date of Allotment: 11/Oct/2024
Refund Initiation Date: 14/Oct/2024
Shares credit to Demat: 14/Oct/2024
Date of Listing on: 15/Oct/2024

Investment Outlook

Garuda Construction and Engineering is a new investment idea to support investors to be a part of India’s fast-growing infrastructure sector. The company had a strong base in construction, along with an order book that has grown continuously to ₹1,408.27 crores as of September 2024.

Why Invest in This IPO?

Portfolio Diversification: Garuda is present across more than one state and segment, which means residential, commercial, and infrastructure. This makes less dependence on a single market and it is more revenue-friendly.

Probability of Long-term Growth

Governments and the private sectors considerably increase spending on infrastructure. The company would, therefore, witness more construction activities primarily in metro cities such as Mumbai, Bangalore, and Pune.
Financial Health: The company has maintained a stable financial performance, as the revenues have clocked at Rs. 1,187.50 crores till April 2024. Even though the growth has gone down marginally from FY 2023, it remains healthy in comparison to industry averages.

IPO Allotment and Listing Strategy

There will be an open offer to Retail investors for 35% of the total issue size; 50% of the issue size is being reserved for Qualified Institutional Buyers, and the balance would be allocated to Non-Institutional Investors. A healthy project pipeline and expected response from the institutional space should keep the secondary market active post listing.

Traders should be keeping an eye on the market scenario and general economic trend, for there may be a bearing on stock price at the time of listing on October 15, 2024. The GMP would provide closer clues also to the listing date about how much demand is anticipated.

Risks to Be Considered

While there is strong potential from the IPO, the following risks must also be considered by the investors:

Sector Volatility: Construction is a sector that is intrinsically cyclical in nature and susceptible to economic slowdowns, changes in interest rates, and regulatory policies. The execution and profitability of any project can be directly affected by development in the real estate or infrastructure sectors.
Competition: As a player in an extremely competitive infrastructure market with regional and national players, it needs to maintain the edge of competition while ensuring delivery of projects to sustain growth.
Geographical Concentration: Though it has projects scattered everywhere, the maximum profits are still coming from Maharashtra. Any deceleration in one of its regional economies and regulatory issues might negatively impact performance.

Conclusion

For the potential investor interested in exploring the flourishing infrastructure sector, Garuda Construction and Engineering is providing a smart investment opportunity. Having proven its track record, time-tested financials, and a large order book, the foundation for the company has now been strongly created in the market. As with all other investments, an evaluation related to the risk-and-reward needs to be done prior to application. Gains from listing are indeed alluring for retail investors in terms of both short-term listing as well as long-term growth prospects.

Disclaimer:

All above recommendations are of the market analysts. Neither the author, nor the brokerage firm, nor Stockstoday.in will be responsible for any loss arising out of any such decision taken based upon this information. All users are cautioned to take their own expert advice prior to making any investment decision.