The upcoming SRM Contractors IPO has set a price band of ₹200 to ₹210 per equity share with a face value of ₹10. Subscription for the IPO will commence on Tuesday, March 26, and conclude on Thursday, March 28. Allocation to anchor investors is scheduled for Friday, March 22.
The floor price for the IPO is set at 20 times the face value of equity shares, while the cap price stands at 21 times the face value. At the upper end of the price band, the price/earnings ratio based on diluted EPS for the financial year 2023 is 2.31, compared to the industry peer group average PE ratio of 32.15. The weighted average return on net worth for fiscal years 2021, 2022, and 2023 is 28.21%. The lot size for the SRM Contractors IPO is 70 equity shares, with multiples of 70 equity shares thereafter.
In terms of share allocation, the IPO reserves not less than 15% for non-institutional institutional investors (NII), a maximum of 50% for qualified institutional buyers (QIB), and not less than 35% for retail investors.
The basis of allotment for the IPO is tentatively scheduled for Monday, April 1, with refunds initiated on Tuesday, April 2. Shares are expected to be credited to the demat accounts of allottees on the same day following the refund process. SRM Contractors shares are likely to be listed on both BSE and NSE on Wednesday, April 3. The promoters of the company are Ashley Mehta, Puneet Pal Singh, and Sanjay Mehta.
Specializing in engineering construction and development, SRM Contractors focuses on building highways (including bridges), tunnels, slope stabilization projects, and various civil construction projects primarily in the Union Territories of Jammu & Kashmir and Ladakh. The company executes construction work for infrastructure projects as both an item rate contractor and an engineering, procurement, and construction (EPC) contractor. It also undertakes subcontracting jobs for infrastructure projects.
According to the Red Herring Prospectus (RHP), SRM Contractors’ listed peers include Man Infraconstruction Ltd, ITD Cementation India Ltd, Likhitha Infrastructure Ltd, and Udayshivakumar Infra Ltd.
Between March 31, 2022, and March 31, 2023, SRM Contractors Limited witnessed a 6.71% increase in profit after tax (PAT) and a 13.24% rise in revenue.
The SRM Contractors IPO comprises a fresh issue of up to 62,00,000 equity shares, aggregating up to ₹130.20 crore, with no offer-for-sale component. The net proceeds from the offering will be utilized for various purposes, including meeting working capital needs, repaying outstanding secured loans, investing in project-specific joint venture projects, and general corporate purposes. Capital expenditure requirements for the purchase of equipment and machinery will also be funded through the proceeds.
Bigshare Services Pvt Ltd is the registrar for the SRM Contractors IPO, while Interactive Financial Services Ltd serves as the book running lead manager.
