The IPO wave is sweeping through Dalal Street this week and one of the key players joining the action is Globe Civil Projects. With its Rs 119 crore public issue set to open for bidding on June 24, the company has lined up a fresh issue of 16.8 million shares. But there is more to this offering than just numbers.
From anchor bookings to grey market trends and key risk disclosures, here are seven key factors of this IPO to watch out for –
Globe Civil Projects IPO: Size and structure
Globe Civil Projects is offering an entirely fresh issue, without any Offer for Sale (OFS) component. The IPO size totals Rs 119 crore.
According to the offer structure, 50% is reserved for qualified institutional buyers (QIBs), while 35% is set aside for retail investors and 15% for non-institutional bidders.
Globe Civil Projects IPO: Price band and lot size
The price band for this mainboard issue is set at Rs 67 to Rs 71 per share, with a minimum lot size of 211 shares. For retail investors, this means a starting investment of Rs 14,981 at the upper price band.
Globe Civil Projects IPO: Grey Market Premium
As of the latest update, the grey market premium (GMP) stood at Rs 13 per share. This hints at a potential listing price of Rs 84, an 18% upside from the issue price.
However, as always with GMPs, these figures are speculative and influenced by market sentiment and liquidity, and not a guarantee of listing day performance.
Globe Civil Projects IPO: From bidding to listing
The IPO will remain open till June 26, with the basis of allotment expected on June 27. Refunds and credit of shares to demat accounts are scheduled for June 30, and the company is eyeing a listing on July 1 across both BSE and NSE.
Globe Civil Projects IPO: What the funds will fuel
The proceeds from the IPO will be used primarily to fund working capital requirements, buy new construction equipment and machinery, and for general corporate purposes.
Globe Civil Projects IPO: Who is managing the IPO
The issue is being managed by MEFCOM Capital Markets, with KFin Technologies acting as the registrar.
Globe Civil Projects IPO: Risks factors
Globe Civil Projects has flagged several potential headwinds. One of the biggest is its dependency on the Central Public Works Department (CPWD), which has contributed a significant portion of its revenues in recent years. Any disruption or slowdown in CPWD projects could hit the top line.
“For the nine months period ended December 31, 2024 and in Fiscal 2024, Fiscal 2023 and Fiscal 2022, we derived 10.10%, 29.77%, 57.48% and 54.62%, respectively, of our revenue from operations from construction project receipts business segment from projects developed by Central Public Works Department (CPWD), our top customer,” the company stated.
Another cause for concern is its declining project success rate. While the company submitted bids for 11 projects during the nine months ended December 2024, it won only one.
“Our revenues depend upon the award of new contracts and the timing of those awards. Additionally, the competitive bidding process, failure to meet pre-qualification criteria, and non-qualification due to technical issues may hamper our revenue,” the DRHP notes.
There are also uncertainties around its steel trading business, which contributed a noticeable chunk of operational revenue in the past.
“Any reduction in trading activity, changes in market demand, or fluctuations in the price of TMT steel may reduce our revenue from this segment and, consequently, impact our total revenue from operations,” the company said.
The company has also noted in the risk factor disclosure that its existing Rs 669 crore order book is not entirely risk-free.
“Projects included in our Order Book may be delayed, modified or cancelled for reasons beyond our control, or not fully paid for by our clients, which could materially harm our cash flow position, revenues or profits,” the filing added.