SRM Contractors makes a weak debut, lists at 2% premium on NSE

SRM Contractors' order book reached Rs 1,199.32 crore, a 177 percent increase from FY21 to FY23. The firm is expanding its fleet of machinery and equipment, which will boost its operational efficiency in the upcoming quarters.

Shares of Jammu & Kashmir-based SRM Contractors listed at a premium of 2 percent at Rs 215.25 on the National Stock Exchange (NSE) on April 3. Ahead of the listing, the SRM Contractors shares were commanding a high grey market premium (GMP) of Rs 95, up 45.24 percent over the issue price, which suggested a strong listing.

However, weak market sentiment dampened the debut. The construction company's Rs 130-crore IPO had generated significant investor interest, receiving a healthy subscription of 86.57 times.

SRM Contractors' outlook is bolstered by several key strengths. The company boasts of a proven track record of efficiently executing road, tunnel, and slope stabilisation projects within their focused region, according to analysts. Owning their equipment and operating an in-house integrated model ensure project control and cost-efficiency.

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"SRM Contractors has a history of consistent financial performance and maintains a healthy order book, indicating continued revenue generation and growth potential. While short-term volatility is always possible, SRM Contractors presents a compelling proposition for investors with a long-term perspective," said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

SRM Contractors' order book reached Rs 1,199.32 crore, a 177 percent increase from FY21 to FY23. The firm is expanding its fleet of machinery and equipment, which will boost its operational efficiency in the upcoming quarters.

Its order book is anticipated to grow in FY25 as a result of government infrastructure efforts in J&K, where the company operates, said Vishnu Kant Upadhyay, Assistant Vice President at Master Capital Service Ltd.On January 31, 2024. Investors can hold the stock for long term," he said.

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