Avoid Garden Reach Shipbuilders & Engineers Ltd: Choice Broking

The other IPO which also received huge responses were Happiest Minds Technologies and Chemcon Speciality Chemicals, which was subscribed 150.98 times and 149.3 times respectively. Interestingly, both these stocks have seen bumper listing gained over 100 percent. Let's see how the IPO subscription and listing happened in 2020 so far, considered only IPOs issue size over Rs 100 crore.

Garden Reach Shipbuilders & Engineers Ltd. (GRSE), a “Mini Ratna - Category - 1” firm specializing in production of ship and warship for Indian Navy and Indian Coast Gaurd, is planning to raise around Rs. 3.4bn through an IPO by offering 29.21mn share between the price range Rs. 115 - 118 per share. The issue is fully OFS, the company will not receive any proceeds from it.

Key competitive strengths

• Modern manufacturing platform and integrated shipbuilding facilities
• End-to-end solutions provider
• Strong and established relationships with Indian Navy and Indian Coast Guard
• Strong order book

Valuation and Outlook

There are no comparable listed companies in India that engage in the same line of business as the company. At the higher price band of Rs. 118 per share, GRSE’s share is valued at a P/E multiple of 15.6x (to its restated FY18 EPS of Rs. 7.6).

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