Garuda Construction IPO: What GMP Indicates Ahead Of Listing

The initial public offering of Garuda Construction and Engineering Ltd., which was subscribed over 7.5 times, may have a tepid debut on the stock market, according to the grey market premium trends.

As of 2:23 p.m. on Monday, Investor Gain reported that the GMP on the IPO shares stood at zero. This indicated that the company may list flat at Rs 95 per share, which is the upper end of the issue price band.

Garuda Construction is expected to be listed on the NSE and BSE on Tuesday, Oct. 15. If the grey market trends turn accurate, then the IPO allottees may bag no listing day gains. However, the GMP is not an official price quote for the stock and is based on speculation.

The Rs 264 crore IPO, launched last week, received bids for 15,03,44,299 shares against 1,99,04,862 shares on offer, according to data available with the NSE. The allotment of shares was finalised on Oct. 11.

The maximum bids for the IPO were recorded in the retail segment, as retail individual investors subscribed 10.81 times their reserved portion. The quota for non-institutional investors subscribed 9.03 times, and the portion for qualified institutional buyers was subscribed 1.24 times.

Garuda Construction's IPO comprised a fresh issue worth Rs 173.85 crore and an offer for sale component worth Rs 90.25 crore. Before launching the public issue, the company raised 75 crore from anchor investors.

Garuda Construction aims to use the fresh issue proceeds, to the extent of Rs 100 crore, for working capital requirements. The remainder of the fundraise is to be used for general corporate purposes, including unidentified inorganic acquisitions, as per the draft documents.

On the financial front, the company's net profit increased to Rs 36.4 crore in fiscal 2024 from Rs 18.8 crore in fiscal 2022, at a compounded annual growth rate of 25%. The revenue from operations during the same period climbed to Rs 154.2 crore from Rs 77 crore at a CAGR of 26%.q