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Garuda & Shiv Texchem Eye Market With ₹356.45 Cr IPOs: Key Insights, GMP & More

Garuda & Shiv Texchem Eye Market With ₹356.45 Cr IPOs: Key Insights, GMP & More
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The Indian IPO market continues to heat up, with two promising IPOs launching this week. Garuda Construction and Engineering Limited, a mainboard IPO seeking to raise ₹264.1 crores, and Shiv Texchem Limited, an SME IPO aiming for ₹101.35 crores, are set to make their market debut. These companies offer a unique blend of products and services. 

Let’s take a closer look into the key details, including their fund objectives, grey market premiums, and company overviews.

Garuda Construction and Engineering Limited

Offer Price₹92 – ₹95 per share
Face Value₹5 per share
Opening Date8 October 2024
Closing Date10 October 2024
Total Issue Size (in Shares)27,800,000
Total Issue Size (in ₹)₹264.1Cr
Issue Type Book Built Issue IPO
Lot Size157 Shares
Listing atBSE, NSE
Source: SEBI

Garuda Construction and Engineering Limited offers a book-built issue of ₹264.10 crores. The IPO includes a fresh issue of ₹173.85 crores and an offer to sell ₹90.25 crores. The shares will be listed on both BSE and NSE, with the allotment expected on October 11th and the listing tentatively set for October 15th. The minimum lot size is 157 shares, requiring a minimum investment of ₹14,915 for retail investors. For HNIs, the minimum lot size investment is ₹208,810 for sNII and ₹1,014,220 for bNII.

Objectives of the Garuda Construction and Engineering Limited IPO

Garuda Construction and Engineering plans to use the IPO proceeds for:

  • Funding working capital requirements
  • General corporate expenses and unidentified inorganic acquisitions

GMP of Garuda Construction and Engineering Limited IPO

The current grey market premium (GMP) for Garuda Construction and Engineering is ₹22. This suggests that the company’s shares are trading at a premium of ₹22 in the grey market, indicating positive investor sentiment. Based on the IPO price band and the GMP, the estimated listing price is ₹117, 23.16% higher than the IPO price.

Company Overview

Garuda Construction and Engineering Limited is a company that provides comprehensive construction services for residential, commercial, infrastructure, and industrial projects. They also offer services such as operation and maintenance, MEP, and finishing works. As of September 28, 2024, the company had 65 permanent employees and an order book value of ₹1,40,827.44 lacs.

Key strengths and achievements:

  1. Exclusive and focused business approach: The company primarily focuses on constructing residential and commercial buildings and is now venturing into industrial and infrastructure projects.
  2. Established and proven track record: The company has a strong track record in various construction projects, including Golden Chariot Vasai Hotel & Spa and Golden Chariot Boutique Hotel in 2015. Since 2017, the company has undertaken residential projects in MMR and completed two. From 2010 to 2017, the company focused on civil engineering in MMR, Karnataka, and Tamil Nadu.
  3. Strong project management and execution capabilities: Garuda Construction and Engineering has demonstrated its ability to manage and execute construction projects effectively.

SWOT Analysis of Garuda Construction and Engineering Limited

STRENGTHSWEAKNESSES

Revenue Fluctuations: The company’s revenue has fluctuated recently, indicating potential challenges in maintaining consistent business.

Geographic Concentration: The company’s operations may be concentrated in a specific region, limiting its growth potential.

Competition: The construction industry is highly competitive, with numerous players operating.
Economic Downturns: A slowdown can impact demand for construction services.

Rising Material Costs: Increases in the cost of construction materials can affect profitability.

Regulatory Changes: Changes in government regulations or policies can impact the construction industry.
OPPORTUNITIESTHREATS
Infrastructure Development: Government initiatives for infrastructure development can create opportunities for construction companies.

Real Estate Growth: The growing real estate sector can drive demand for construction services.

Expansion into New Markets: Garuda Construction can explore opportunities to expand its operations to new regions or diversify into other sectors.
Economic Downturns: A slowdown in the economy can impact demand for construction services.

Rising Material Costs: Increases in the cost of construction materials can affect profitability.

Regulatory Changes: Changes in government regulations or policies can impact the construction industry.

Financial Strength

Garuda Construction and Engineering has shown mixed financial performance. Revenue decreased by 4% from ₹16068.76 lacs in FY 2023 to ₹15,417.83 lacs in FY 2024. However, profit after tax (PAT) dropped by 11% during the same period.

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Source: SEBI

Shiv Texchem Limited

Offer Price₹158 – ₹166 per share
Face Value₹10 per share
Opening Date8 October 2024
Closing Date10 October 2024
Total Issue Size (in Shares)6,105,600
Total Issue Size (in ₹)₹101.35 Cr
Issue Type Book Built Issue IPO
Lot Size800 Shares
Listing atBSE, SME
Source: BSE

Shiv Texchem Limited is offering a book-built issue of ₹101.35 crores. The IPO is scheduled to be listed on NSE SME, with the allotment expected on October 11th and the listing tentatively set for October 15th. The minimum lot size is 800 shares, requiring a minimum investment of ₹132,800 for retail investors and ₹265,600 for HNIs.

Objectives of the Shiv Texchem Limited IPO

Shiv Texchem plans to use the IPO proceeds for the following:

  • Funding long-term working capital requirements
  • General corporate purposes

GMP of Shiv Texchem Limited IPO

The current grey market premium (GMP) for Shiv Texchem is ₹40. This suggests that the company’s shares are trading at a premium of ₹40 in the grey market, indicating positive investor sentiment. Based on the IPO price band and the GMP, the estimated listing price is ₹206, 24.10% higher than the IPO price.

Company Overview

Shiv Texchem Limited is a company that imports and distributes hydrocarbon-based secondary and tertiary chemicals, which are used as raw materials in various industries. The company sources these chemicals from international manufacturers and suppliers and distributes them to domestic sectors. They expanded their portfolio from 21 products in FY22 to 39 in FY24 and grew their customer base from over 400 to over 650 during the same period.

SWOT Analysis of Shiv Texchem Limited IPO

STRENGTHSWEAKNESSES
Diverse Product Portfolio: Shiv Texchem offers various hydrocarbon-based chemicals that cater to multiple industries.

Strong Customer Relationships: The company has established relationships with over 650 customers, including reputable companies in the paints, coatings, agrochemicals, and other industries.

Global Sourcing Network: Shiv Texchem sources chemicals from international manufacturers, ensuring a reliable supply chain.

Financial Performance: The company has demonstrated strong financial growth, with significant increases in revenue and profitability.
Dependence on Imports: Reliance on imports for raw materials can expose the company to fluctuations in foreign exchange rates and supply chain disruptions.

Competition: The market for hydrocarbon-based chemicals is competitive, with numerous players offering similar products.

Price Volatility: Prices of traded goods can be volatile, impacting profitability.
OPPORTUNITIESTHREATS
Growing Demand for Specialty Chemicals: The demand for specialty chemicals in various industries is expected to increase.

Product Innovation: Shiv Texchem can explore opportunities to develop new or innovative chemical products.

Expansion into New Markets: The company can expand its reach to new domestic or international markets.
Economic Downturns: A slowdown in the economy can impact demand for chemicals.

Regulatory Changes: Changes in government regulations or trade policies can affect the company’s operations.

Technological Advancements: New technologies or alternative materials could impact the demand for traditional chemicals.

Financial Strength

Shiv Texchem has shown strong financial growth, with revenue increasing by 37% and profit after tax (PAT) rising by 88% between FY23 and FY24. Over two years, revenue has increased by 77.6% and PAT by 117.2%.

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Source: BSE

Conclusion:

As these IPOs unfold, investors will be closely watching their performance. The market’s response to these offerings will provide valuable insights into the current investor sentiment and the overall health of the SME market. Investors must conduct thorough research and consider their risk tolerance before making investment decisions.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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