???? Issue Period: 8th Oct 2024 – 10th Oct 2024
???? Price Band: ₹90 - ₹95 per share
???? Issue Size: 1,99,04,862 shares
???? Face Value: ₹5 per share
???? Lot Size: 157 shares
???? Market Lot: Minimum 1 lot (157 shares)
???? Promoters: Pravinkumar Brijendra Kumar Agarwal, PKH Ventures Limited, Makindian Township Private Limited
???? Stock Exchange Listing: BSE, NSE
???? Type: 100% Book Built Issue
???? Registrar: Link Intime India Private Limited
???? Company Overview ????
Garuda Construction and Engineering Limited was founded in 2010 and has become a key player in India’s growing construction sector. Specializing in civil construction and engineering services, Garuda has a robust portfolio of contracts, including infrastructure, government, and private sector projects.
???? Headquarters: Mumbai, Maharashtra
???? Core Services: Civil construction, Engineering services
???? Promoters: PKH Ventures Limited and Makindian Township Private Limited
???? Industry Overview ????
India’s construction industry is booming, driven by infrastructure development, rapid urbanization, and initiatives like Smart Cities Mission and Atmanirbhar Bharat. This sector is poised for sustained growth over the next decade, with projections of significant government and private sector investments in housing and infrastructure.
Peer Group Comparison ????
Garuda Construction and Engineering Limited operates in the competitive construction and infrastructure sector. Let’s compare Garuda's performance with some of its key competitors:
Larsen & Toubro (L&T):
Revenue: ₹1,45,000 Cr
EBITDA Margin: 11.9%
PAT Margin: 7.4%
Debt-to-Equity Ratio: 0.20
NCC Limited:
Revenue: ₹9,300 Cr
EBITDA Margin: 10.5%
PAT Margin: 4.5%
Debt-to-Equity Ratio: 0.40
IRB Infrastructure Developers:
Revenue: ₹8,150 Cr
EBITDA Margin: 35.7% (due to a higher focus on infrastructure tolling)
PAT Margin: 16.5%
Debt-to-Equity Ratio: 1.90
Garuda Construction & Engineering Limited:
Revenue: ₹500 Cr (FY24)
EBITDA Margin: 12.5%
PAT Margin: 7.8%
Debt-to-Equity Ratio: 0.45
Key Insights:
Larsen & Toubro (L&T) remains the dominant player, with significant revenue and balanced profitability ratios. Its low debt-to-equity ratio highlights strong financial health.
NCC Limited shows stable margins but faces moderate competition due to a lower PAT margin compared to others.
IRB Infrastructure has a higher EBITDA margin, reflecting its focus on capital-intensive projects like toll roads, but the high debt-equity ratio could be a concern for long-term sustainability.
Garuda Construction, while smaller, maintains competitive profitability margins, with a balanced debt-to-equity ratio, showcasing its capability to scale in the mid-sized project space.
This comparison indicates that Garuda is well-positioned in the market but remains relatively smaller compared to its peers, providing opportunities for growth while maintaining a sustainable financial model.
???? Offer Details ????
Fresh Issue: 1,83,00,000 Equity Shares
Offer for Sale: 95,00,000 Equity Shares by PKH Ventures
Total Shares Offered: 2,78,00,000
Listing Date: Expected shortly after the issue closes
IPO Proceeds:
To meet working capital needs
General corporate purposes
Strengthening the balance sheet
???? Objects of the Offer ????
The net proceeds from the IPO will be primarily used for:
Working capital requirements
Expansion of operations
Repayment of debt
General corporate purposes
???? Investment Highlights ????
Experienced Promoters: Garuda is backed by industry veterans with a proven track record in the construction industry.
Strong Order Book: The company has a strong order book in sectors like housing, infrastructure, and government contracts.
Growing Industry: Positioned to benefit from India’s rapid urbanization and infrastructure projects.
Positive Profit Margins: Garuda has maintained a healthy EBITDA and PAT margin, reflecting operational efficiency.
???? Financial Ratios ????
Profitability Ratios:
Gross Profit Margin: 14.2%
Net Profit Margin: 7.8%
Leverage Ratios:
Debt-to-Equity Ratio: 0.45
Interest Coverage Ratio: 4.8x
Liquidity Ratios:
Current Ratio: 1.45
Quick Ratio: 1.20
Earnings Ratios:
Earnings per Share (EPS): ₹8.50 (FY24)
Price-to-Earnings (P/E) Ratio: 11x at the upper price band of ₹95
???? Future Outlook ????
Garuda Construction is strategically positioned to benefit from:
Government infrastructure spending
Urbanization trends
Expansion into new markets
The company plans to further expand its project portfolio, diversify its client base, and optimize operations to improve margins and deliver steady growth.
⚠ Risk Factors ⚠
Before investing, it’s essential to consider the following risks:
Fluctuations in Raw Material Prices: Volatility in material costs (e.g., steel, cement) can impact profitability.
Execution Risks: Delays in project execution can affect financial performance.
Competition: Intense competition from established players like L&T and NCC.
Dependence on Government Contracts: A large portion of Garuda’s revenue comes from government projects, which may face delays due to regulatory hurdles.
???? Stock Market Disclosure ????
Garuda Construction and Engineering Limited IPO is being made in compliance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. The issue price and allocation of shares are determined by the book-building process, with BSE as the designated stock exchange.
Investors must read all the risk factors carefully before making any decision. The company and its promoters do not guarantee profits or returns, and there is always a risk of losing the invested capital.
???? For more details, visit the official website or consult the Red Herring Prospectus before making any investment decision.
⚠ Important Note:
The information provided is solely for educational purposes and is not intended as financial advice.
???? Contact Information
Visit us at ???? www.profitfromit.in or call us toll-free at ☎ 1800 890 4317.
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