SRM Contractors IPO opens for subscription: Should you bid?
The initial public offering (IPO) of construction and development company SRM Contractors kicked off for subscription on Tuesday, March 26, and will be available for the public to bid till March 28. Through the public offer, the company aims to raise around ₹ 130 crore.
Ahead of the issue opening, the company raised ₹39.06 crore from three anchor investors on March 22.
Neomile Growth Fund – Series I was the largest institutional investor in the anchor book, picking 9.05 lakh equity shares worth ₹19 crore, while Saint Capital Fund, and Astorne Capital VCC – Arven bought 4.77 lakh equity shares each worth ₹10 crore.
What should investors do?
Analysts at SMIFS Ltd have recommended a ‘Subscribe’ rating to the issue as the company’s orderbook is expected to increase in FY24 and FY25 due to the government infrastructure initiatives in J&K where the company operates and the company is increasing its fleet machinery and equipment, which will drive its operational efficiency in the coming quarters.
The company’s orderbook grew 177% between FY21 and FY23 to ₹1,199 crore as of January 31, 2024, of which ₹720 crore is remaining to be executed.
SRM Contract.ors IPO price band
The company has fixed a price band of ₹200-210 per share for its share sale. Investors can bid for a minimum of 70 equity shares in one lot and multiples thereafter.
SRM Contractors IPO GMP
According to market observers, the current grey market premium (GMP) of SRM Contractors is ₹70 in the unlisted market.
SRM Contractors IPO size
The maiden public issue is entirely a fresh issue of 62 lakh equity shares, aggregating up to ₹130 crore. There is no ‘offer for sale’ component, according to the Draft Red Herring Prospectus (DRHP).
SRM Contractors IPO structure
About 50% of the issue has been set aside for qualified institutional buyers, 15% for non-institutional investors, and the remaining 35% for retail investors.
SRM Contractors IPO objective
Proceeds of the IPO will be utilised to purchase machinery, support working capital requirements, invest in joint venture projects, pay debt and for general corporate purposes.
SRM Contra
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ctors IPO BRLM
Interactive Financial Services is the sole book-running lead manager to the IPO while Bigshare Services is the registrar.
SRM Contractors IPO listing date
The share allotment for the IPO will be finalised on April 1 and the stock is expected to be listed on the NSE and BSE on April 3.
Company overview
SRM Contractors is an engineering construction and development company engaged primarily in the construction of roads (including bridges), tunnels, slope stabilisation works and other miscellaneous civil construction activities in the Union Territories of Jammu & Kashmir and Ladakh.
The company posted a net profit of ₹18.75 crore in FY23, up from ₹17.57 crore. Its revenue rose from ₹263.3 crore in FY22 to ₹300.3 crore.
In the nine-month period of the current fiscal year, net profit stood at ₹21.07 crore on revenue of ₹234.55 crore.
