Incorporated in 2010, Garuda Construction and Engineering Limited is a civil construction company. It provides end-to-end civil construction for residential, commercial, residential cum commercial, infrastructure and industrial projects. It also provides operations and maintenance (O&M) as well as electrical and plumbing (MEP) services.
It is present in MMR (Mumbai Metropolitan Region), New Delhi, Karnataka, Tamil Nadu, Arunachal Pradesh, Punjab, and Rajasthan. It has completed 9 projects so far and has 12 ongoing projects, including 6 residential projects, 2 commercial projects, 1 industrial project, and 1 infrastructure.
Some of its ongoing projects include Trinity Oasis at Thane, Garuda Shatrunjay in Mumbai, and a residential building at Amritsar. It is also developing a state-of-the-art township with amenities such as a sports city of ~30 acres, greenbelts, recreational facilities, educational, commercial and health establishments and more.
It is predominantly an EPC (Engineering, Procurement, Construction) company and is not a main concessionaire under government contracts or private constructions.
As of 31 August 2024, the company had a total order book of ₹1,408 crore. Between FY22 and FY24, the company saw a 26% CAGR rise in its revenue from operations and over 24% in its net profit. Moreover, the construction sector is expected to grow at a CAGR of 7.5% between FY23 and FY30 to reach a market size of ₹6,494 billion, which could indirectly benefit the company.
Now, Garuda Construction and Engineering Limited is launching its initial public offer (IPO). The total IPO issue size is ₹264.10 crore, comprising fresh issue, aggregating to ₹173.85 crore, as well as an offer for sale, aggregating to ₹90.25 crore. The money raised from the fresh issue will be utilised for working capital requirements and general corporate expenses. Its shares will be listed on the NSE and BSE.
Here are key details about the Garuda Construction and Engineering IPO:
| Company Name | Garuda Construction and Engineering Limited |
|---|---|
| Company Type | Private |
| Company Established | 2010 |
| Garuda Construction and Engineering IPO Open Date | 8th October 2024 |
| Garuda Construction and Engineering IPO Close Date | 10th October 2024 |
| Garuda Construction and Engineering IPO Allotment Status | 11th October 2024 |
| Credit of Shares to Demat | 14th October 2024 |
| Garuda Construction and Engineering IPO Listing Date | 15th October 2024 |
| Garuda Construction and Engineering IPO Face Value | ₹5 per share |
| Garuda Construction and Engineering IPO Lot size | 157 shares |
| Garuda Construction and Engineering IPO Issue Size | Approx ₹264.1 crore |
| Garuda Construction and Engineering IPO Listed at | BSE, NSE |
| Garuda Construction and Engineering IPO Price | ₹92 – ₹95 per share |
Financial snapshot
| ₹ crore | FY22 | FY23 | FY24 |
|---|---|---|---|
| Income | 77 | 160 | 154 |
| Net profit | 18.7 | 40.7 | 36.4 |
Strengths
- Track record of successfully executing a diverse mix of construction projects in the residential, hospitality and commercial sectors, such as the construction of the Golden Chariot Vasai Hotel & Spa, amongst others.
- The company employs third-party vendors for equipment and keeps its asset base light to enhance cost efficiency and minimise operational disruptions.
- The company’s exclusive and focused business approach in civil construction has enabled it to establish systems and processes that are aligned with the specific requirements of business operations.
- Strong project management capacity and execution capabilities, having procured a fleet of construction equipment.
- Strong financial performance with EBITDA margins of 35%, 34%, and 32% in FY22, FY23, and FY24, respectively.
- Visible growth through increasing order book with projects across MMR, Arunachal Pradesh, Karnataka, Rajasthan and Punjab.
Risks and threats
- Operates in the construction industry, which is cyclical and sensitive to changes in the economy.
- Has experienced negative cash flow in the last three fiscals.
- Significantly dependent on the real estate market in the Mumbai Metropolitan Region.
- It faces competition from PSP Projects, Capacite Infraprojects, Vascon Engineers, Ahluwalia Contracts (India), and B L Kashyap and Sons.
- Operates a capital-intensive business with requirements of ₹95 crore as of 30 April 2024.
- The company relies on third parties for services, and the supply of raw materials for its projects, and the third party’s inability to provide these could adversely affect the company’s business.
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