The SRM Contractors IPO commenced on Tuesday, March 26, with a robust initial response, and is scheduled to conclude on Thursday, March 28. Based on BSE data, the total subscription status for the SRM Contractors IPO stood at 3.56 times on Day 1 of the subscription period. Notably, the non-institutional investors (NIIs) segment witnessed strong demand, with a subscription rate of 6.26 times, while the retail portion was subscribed 3.55 times. Additionally, the qualified institutional buyers (QIBs) segment saw a subscription rate of 1.57 times.
The IPO price band for SRM Contractors ranges from ₹200 to ₹210 per share, with a face value of ₹10 each. Investors can place bids for multiples of 70 shares, with a minimum bid size of 70 shares. The company has allocated not less than 15% of the shares for Non-Institutional Investors (NIIs), a maximum of 50% for Qualified Institutional Buyers (QIBs), and not less than 35% for retail investors.
Ahead of its public offering, the SRM Contractors IPO witnessed a substantial investment of ₹39 crore from anchor investors on Friday, March 22, further signaling investor confidence in the company’s prospects.
The anticipated timeline for the SRM Contractors IPO includes the share allotment date, tentatively scheduled for Monday, April 1. Following the allotment, shares will be swiftly credited to the demat accounts of the allottees on the same day, coinciding with the reimbursement date, slated for Tuesday, April 2. Market observers anticipate the listing of SRM Contractors’ shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to take place on Wednesday, April 3, providing investors with an opportunity to trade the newly listed shares.
SRM Contractors specializes in a wide range of civil building projects within the Union Territories of Jammu & Kashmir and Ladakh. Its diverse portfolio includes the construction of tunnels, slope stabilization projects, roads (including bridges), as well as other minor infrastructure initiatives.
Navigating through the challenging terrain of the region, SRM Contractors demonstrates a high level of technical expertise, allowing it to successfully execute projects in the hilly and rugged landscapes of Jammu & Kashmir and Ladakh. Over time, the company has emerged as a significant player in the infrastructure development sector within these Union Territories, contributing significantly to their growth and development efforts.
IPO Subscription Status
The SRM Contractors IPO witnessed overwhelming demand from Non-Institutional Investors (NIIs), followed by retail investors and Qualified Institutional Buyers (QIBs) on the second day of the subscription period. According to BSE data at 13:21 IST, the overall subscription status of the SRM Contractors IPO stood at 9.81 times. The retail portion was subscribed 8.91 times, while the NII portion was oversubscribed by 22.82 times. The QIBs portion was subscribed 1.62 times.
At the same time, bids were received for 4,27,85,120 shares against the 43,40,100 shares on offer. Specifically, the retail investors’ segment received bids for 1,94,69,940 shares against 21,70,000 shares available for this segment. The NIIs portion garnered bids for 2,13,12,340 shares against 9,30,000 shares on offer. Meanwhile, the QIBs segment received bids for 20,02,840 shares against 12,40,100 shares available for subscription in this segment.
IPO Deatils
The SRM Contractors IPO consists of a fresh issue of up to 62,00,000 equity shares, amounting to an aggregate value of ₹130.20 crore. Notably, there is no offer-for-sale component included in this IPO.
The company intends to utilize the net proceeds from the offering for various purposes, including covering working capital requirements, repaying existing secured loans either in full or in part, participating in joint ventures tailored to specific projects, and addressing general corporate purposes. Additionally, funds raised will also be allocated for the capital costs associated with the acquisition of machinery and equipment.
Interactive Financial Services Ltd serves as the book running lead manager for the SRM Contractors IPO, while Bigshare Services Pvt Ltd acts as the registrar for the IPO process.
IPO GMP Today
Today, the Grey Market Premium (GMP) for the SRM Contractors IPO stands at +95. This suggests that SRM Contractors shares are trading at a premium of ₹95 in the grey market, as reported by investorgain.com.
Furthermore, the expected listing price for SRM Contractors shares is estimated at ₹305 per share. This reflects a substantial increase of 45.24% compared to the IPO price of ₹210, considering the upper end of the IPO pricing band and the current premium in the grey market.
Based on the trend observed over the past nine sessions in the grey market, the IPO GMP indicates a strong potential for a robust listing. According to analysts’ reports on investorgain.com, the GMP has ranged between ₹25 to ₹95.
The Grey Market Premium serves as an indicator of investors’ willingness to pay a premium over the issue price, reflecting the market sentiment towards the IPO.
IPO Review
According to Dilip Davda, SRM Contractors has demonstrated consistent growth in both its top and bottom lines. The company specializes in specialized engineering construction projects such as highways, tunnels, slope stabilization, etc. As of December 2023, SRM Contractors has accumulated orders worth more than ₹1199 crore, indicating promising prospects for the company.
Davda suggests that the IPO appears to be fully priced based on the annualized profits for FY24. However, all other factors seem to be aligned positively, except for concerns regarding the Lead Manager’s historical performance. Despite this, investors might consider allocating funds with the expectation of medium- to long-term gains.
Sources: livemint.com
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