Tue Oct 08 14:32:42 UTC 2024: ## Garuda Construction IPO Sees Strong Retail Demand, Listing Poised for 5-6% Pop

**Mumbai, October 8, 2024:** The initial public offering (IPO) of Garuda Construction and Engineering has received a positive response from investors in its first day of bidding. Retail and high net worth individual (HNI) investors have driven the subscription to full, with bids for 3,01,48,867 shares, exceeding the 1,99,04,862 offered by 1.51 times as of 2.45 pm on Tuesday.

The IPO, which is open for subscription until Thursday, October 10, sees the company offering shares at a price band of Rs 92-95 apiece. Garuda aims to raise Rs 264.10 crore through the IPO, including a fresh issue and an offer-for-sale by its promoter PKH Ventures.

Retail investors have shown strong interest, subscribing 2.78 times their allotted portion. However, while non-institutional investors (NIIs) have subscribed 74 per cent of their allocation, qualified institutional bidders (QIBs) have yet to participate.

The grey market premium (GMP) for Garuda Construction has seen a correction in recent hours, currently sitting at Rs 5, suggesting a potential listing pop of 5-6 per cent. This is down from the Rs 22 premium seen a couple of days ago.

Brokerage firms remain largely positive about the IPO, citing the company’s diversification, robust order book, and superior return ratios. They recommend subscribing for long-term investment. However, concerns linger around the company’s sluggish financial performance, cyclical business nature, and negative cash flows.

Garuda Construction has a solid order book and project diversification as key strengths, with revenue and profit growth seen in FY23. However, FY24 was impacted by the election year. Tradingo suggests high-risk investors may consider applying for the long term.

Prior to the IPO, the company secured Rs 75 crore from seven anchor investors. The company has allocated 50 per cent of the net offer for QIBs, 15 per cent for NIIs, and 35 per cent for retail investors.

While Garuda has ambitious growth plans, investors should weigh these against risks stemming from cash flow constraints and the promoter group’s past financial challenges. Canara Bank Securities advises caution and has assigned an “avoid” rating to the IPO.

The IPO is managed by Corpwis Advisors, with Link Intime India as the registrar. The company’s shares are expected to be listed on the BSE and NSE on Tuesday, October 15.

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