Garuda Construction IPO was subscribed twice to the offered shares. The retail investors booked the issue 3.52 times and the NII category was subscribed 1.11 times more. However, the QIBs showed a very low interest in the issue, subscribing just 0.02% of the issue. Here are the key risks Garuda Constructions reported in its DRHP:
One of the promoters has a criminal proceeding against him. “Pravin Kumar Brijendra Kumar Agarwal is involved in a criminal proceeding initiated by Airport Police Station which is currently pending before the Hon’ble Metropolitan Magistrate at Andheri, Mumbai. Any such proceedings, or any adverse action as a result of such proceedings, may affect the reputation of our promoter and subsequently that of our business,” said the company.
The company has witnessed negative cash flow in recent fiscal years. A construction company is always in need of cash as the industry in which it operates requires high capital expenditure. “This IPO deserves careful scrutiny due to its uneven financial track record and unimpressive past performance. The company’s finances have been marked by significant fluctuations, leading to average results,” said Tarun Singh, Founder and MD of Highbrow Securities.
Garuda Construction and Ventures is a turnaround of a previously failed IPO. The IPO previously filed by its promoter group PKH Venture was not subscribed leading to the withdrawal of the IPO, read the DRHP filed with SEBI. “This seems more than just a retry – it’s an adamant second bid for public listing, driven by determination rather than financial stability,” said Singh.
Garuda Construction and Engineering IPO Details
The company opened its IPO on October 08. The company wants to raise a sum of Rs 264 crore. The IPO will close on October 10. The IPO consists of two components: fresh issue and offer for sale. The allotment of shares is likely to be finalised on October 11, a day after the bidding closes. The IPO band ranged between Rs 92 to Rs 95 per equity share. Corpwis Advisors worked as the lead book runner of the IPO and Link Intime India registrar for the issue.
