Garuda Construction and Engineering IPO Listing Details

Garuda Construction and Engineering Limited, a construction company providing services across residential, commercial, industrial, and infrastructure sectors, made a positive debut on the Indian stock market on Tuesday, 15th October 2024, with its shares listing at a premium to the issue price on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Listing Details

• Listing Price: Garuda Construction and Engineering shares were listed at ₹105 per share on both BSE and NSE, marking a strong start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a significant premium to the IPO issue price. Garuda Construction and Engineering had set its IPO price band from ₹90 to ₹95 per share, with the final issue price being fixed at the upper end of ₹95.
• Percentage Change: The listing price of ₹105 on both exchanges translates to a premium of 10.53% over the issue price of ₹95.

First-Day Trading Performance

• Opening vs. Latest Price: Following its positive opening, Garuda Construction and Engineering's share price experienced some volatility. By 10:36 AM, the stock was trading at ₹103.59, down 1.34% from its opening price but still 9.04% above the issue price.
• Market Capitalisation: As of 10:36 AM, the company's market capitalisation stood at ₹963.82 crore.
• Trading Volume: The traded volume was 178.46 lakh shares with a traded value of ₹185.26 crore, indicating significant investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted positively to Garuda Construction and Engineering's listing, exceeding pre-listing expectations. The grey market had shown no premium for the shares prior to the debut.
• Subscription Rate: The IPO was oversubscribed by 7.55 times, with retail investors leading at 10.81 times subscription, followed by NIIs at 9.03 times, and QIBs at 1.24 times.
• Price Band: The stock hit a high of ₹109.70 and a low of ₹100.36 during early trading, reflecting some volatility..

Growth Drivers and Challenges

Expected drivers of future performance:

• Diversified project portfolio across residential, commercial, industrial, and infrastructure sectors
• Strong order book valued at ₹1,40,827.44 lakh as of September 28, 2024
• Established track record in construction projects
• Experienced management team

Potential challenges:

• Cyclical nature of the infrastructure industry
• Inconsistent financial performance in recent years
• High trade receivables compared to reported revenues

Utilisation of IPO Proceeds

Garuda Construction and Engineering plans to use the funds for:

• Meeting working capital requirements
• General corporate expenses
• Potential unidentified inorganic acquisitions

Financial Performance

The company has demonstrated mixed financial results:

• Revenue decreased by 4% to ₹154.47 crore in FY2024 from ₹161.02 crore in FY2023
• Profit After Tax (PAT) dropped by 11% to ₹36.44 crore in FY2024 from ₹40.8 crore in FY2023

As Garuda Construction and Engineering IPO begins its journey as a listed entity, market participants will closely monitor its ability to leverage its strong order book and execute its ongoing projects to drive future growth and improve shareholder value. The positive listing, despite mixed financial performance, suggests cautious optimism towards the company's prospects in the competitive construction sector. Investors will be watching for signs of improved financial consistency, effective working capital management, and successful execution of the company's project pipeline.