Garuda Construction and Engineering IPO to hit Dalal Street on October 8

Garuda Construction and Engineering IPO

Garuda Construction and Engineering, the subsidiary of PKH Ventures, has decided to launch its initial public offering for subscription on October 8. The price band has been fixed at Rs 92-95 per share.

Promoter PKH Ventures had launched its Rs 379-crore IPO in July 2023, but due to lack of interest from institutional investors, it had withdrawn the said public issue.

The IPO of 2.78 crore equity shares is a combination of fresh issue of 1.83 crore equity shares and an offer-for-sale of 95 lakh shares by promoter PKH Ventures.

Total promoters' shareholding in the civil construction company stood at 96.81 percent, while public shareholders' stake was 3.19 percent, as per the red herring prospectus.

The public issue will close on October 10, while the anchor book, the part of qualified institutional buyers' (QIBs) portion, will be opened for a day on October 7. Half of the IPO size has been reserved for QIBs, 15 percent for non-institutioal investors, and the remainder 35 percent shares for retail investors. Generally, up to 60 percent of the QIBs book is set aside for anchor investors.

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The Mumbai-based company provides civil construction services for residential, commercial, infrastructure, industrial, and hospitality projects. Apart for that, it also offers operations and maintenance (O&M), and mechanical, electrical and plumbing (MEP) services, as a part of construction services.

Garuda Construction intends to spend Rs 100 crore out of the net fresh issue proceeds (fresh issue less issue expenses) for its working capital requirements, and the reminder funds for general corporate expenses and unidentified inorganic acquisitions.

The financial performance of the company in the reported past years has been volatile. Net profit in the fiscal 2024 fell 10.7 percent to Rs 36.4 crore compared to Rs 40.8 crore in the previous year, with weak topline as well as operating numbers.

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Revenue from operations for the year ended March 2024 declined by 4 percent to Rs 154.2 crore compared to Rs 160.7 crore in the previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortisation) during FY24 dropped 10.5 percent year-on-year to Rs 49.8 crore with margin falling 230 bps to 32.3 percent.

Meanwhile, the company will finalise its basis of allotment of IPO shares by October 11 and the equity shares will be credited to demat accounts of eligible investors by October 14. And finally, trading in its equity shares will commence on the bourses effective October 15.

Corpwis Advisors is the sole merchant banker to the issue, while Link Intime India is the registrar to the offer.