SRM Contractors IPO: The initial public offering of SRM Contractors Ltd, which is going to be closed on March 28, has received a decent response from investors. Till 4:47 pm on the final day of bidding on Thursday, the Rs 130.20-crore IPO received 86.33 times subscription, garnering bids for 37,46,84,450 shares against 43,40,100 shares on offer.
The SRM Contractors IPO was opened for public subscription on March 26. The share allotment will take place on March 29, while it will be listed on both BSE and NSE on April 3.
The category for non-institutional investors got subscribed 214.84 times while the portion for Retail Individual Investors (RIIs) attracted 46.53 times subscription. The quota for Qualified Institutional Buyers (QIBs) got subscribed 59.59 times.
SRM Contractors IPO GMP Today
According to market observers, unlisted shares of SRM Contractors Ltd are trading Rs 140 higher in the grey market as compared with its issue price. The Rs 140 grey market premium or GMP means the grey market is expecting a 66.67 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
SRM Contractors IPO: Should You Subscribe?
Giving a ‘subscribe’ recommendation to the IPO, brokerage SMIFS said, “The company’s order book is expected to increase in FY24 and FY25 due to the government infrastructure initiatives in J&K where the company operates and the company is increasing its fleet machinery and equipment which will drive its operational efficiency in the coming quarters.”
Stating that SRM Contractors’ orderbook grew 177 per cent between FY21 to FY23 to Rs 1,199.32 crore on January 31, 2024, SMIFS said, “We recommend a subscribe to the issue.”
Giving a ‘subscribe for a long-term rating’ for the IPO, StoxBox research analyst Parth Shah said, “SRM Contractors has gained the experience and has developed technical capabilities to execute projects in challenging terrain. Therefore, looking at the future scenarios, we remain positive on the Indian infrastructure story and believe that it will emerge as one of the reliable partners in nation-building.”
He added that the company also has a track record of successfully completing large-scale government projects. During recent years, various factors such as rapid urbanisation, rapid freight movement, and demand for improved infrastructure have been pushing tunnel construction and development throughout the country.
SRM Contractors IPO Details
The initial public offering (IPO) of fresh issue of up to 62,00,000 equity shares has a price range of Rs 200-210 a share. SRM Contractors mopped up Rs 39 crore from anchor investors on Friday.
The firm is an engineering construction and development company engaged primarily in the construction of roads (including bridges), tunnels, slope stabilisation works and other miscellaneous civil construction activities in the Union Territories of Jammu & Kashmir and Ladakh, as per its website.
The company was incorporated in September 2008.
Interactive Financial Services is the manager to the offer.
The minimum amount of investment required by retail investors is Rs 14,700. The minimum lot size investment for small NII is 14 lots (980 shares), amounting to Rs 2,05,800, and for big NII, it is 69 lots (4,830 shares), amounting to Rs 10,14,300.
Interactive Financial Services Ltd is the book-running lead manager of the SRM Contractors IPO, while Bigshare Services Pvt Ltd is the registrar for the issue.
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