Garuda Construction and Engineering IPO Sees Strong Response on Day 2

Garuda Construction and Engineering's ₹264-crore initial public offering (IPO) continued to attract significant interest from investors on the second day of bidding, October 9, 2024. Despite recent market turbulence, the Mumbai-based construction firm witnessed robust demand, with investors bidding for 8.16 crore equity shares—4.10 times the issue size of 1.99 crore shares, according to data shared by the exchanges.

The IPO aims to raise ₹173.85 crore through a fresh issue and ₹90.25 crore via an offer-for-sale (OFS) of 95 lakh shares at the upper price band of ₹92-₹95 per share. The company's promoter, PKH Ventures, will be selling shares through the OFS.

Strong Retail Investor Participation

Retail investors have led the charge, subscribing to 6.73 times the shares allocated for them, while non-institutional investors subscribed 2.58 times their portion. Qualified institutional buyers (QIBs) also showed interest, with 0.91 times subscription for their reserved quota, nearing full subscription.

Grey Market Performance

However, Garuda's IPO shares are struggling to secure a strong premium in the grey market, with prices trading at a 0-5% premium over the upper price band, down from the earlier premium of 7-15%. The grey market serves as an unofficial venue for IPO shares before their official listing, often providing insights into expected listing prices.

Utilization of IPO Proceeds

The proceeds from the fresh issue will primarily be used to bolster Garuda's working capital, while a portion will go towards general corporate expenses and potential inorganic acquisitions to fuel growth.

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Despite market volatility, Garuda's IPO has drawn attention from investors eager to participate in the company's growth story. The public issue will close on October 10, and Corpwis Advisors is serving as the sole book-running lead manager for the IPO.

[Disclaimer: This article is for informational purposes only. Investors are advised to conduct their own research or consult with financial advisors before making any investment decisions.]