SRM Contractors IPO subscribed 86.57 times on Day 3, NIIs take charge

SRM aims to utilise proceeds to repay borrowings, fulfill working capital requirements, and entering into joint ventures with companies.

The public issue of SRM Contractors continued to garner strong response from investors, as the issue was subscribed 86.57 times March 28, the final day of bidding. Investors bought 37.57 crore equity shares so far as against the IPO size of 43.4 lakh equity shares.

Non-institutional investors were at the forefront of subscription, picking up 214.94 times the portion reserved from them. This is much more than retail investors and qualified institutional buyers (QIB), who subscribed 46.97 and 59.59 times the allotted quota, respectively.

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The Jammu and Kashmir-based EPC contractor launched its maiden public issue on March 26 for fund raising of Rs 130.20 crore. The 62 lakh equity-shares IPO comprises only a fresh issue by the company with no offer-for-sale component.

The company raised Rs 39.06 crore from three anchor investors. Neomile Growth Fund - Series I was the largest institutional investor in the anchor book, picking 9.05 lakh equity shares worth Rs 19 crore, while Saint Capital Fund and Astorne Capital VCC - Arven bought 4.77 lakh equity shares each worth Rs 10 crore.

The company is primarily engaged in the construction of roads (including bridges), tunnels, slope stabilisation works, and other construction activities in the Union Territories of Jammu & Kashmir and Ladakh.

On the financial front, it recorded a net profit of Rs 18.75 crore in FY23, up from Rs 17.57 crore. Revenue increased from Rs 263.3 crore in FY22 to Rs 300.3 crore.

SRM aims to utilise proceeds to repay borrowings, fulfill working capital requirements, and entering into joint ventures with companies. Rest of the money will be set aside for general corporate copy.