The shares of Garuda Construction and Engineering were to a have a satisfactory beginning on the stock market by listing at Rs. 105 per share, a 10.5% premium over its issue price of Rs.95. In spite of having inactive outlook in grey market which indicates a flat or negative listing, the company surprised many for its strong opening.
GCEL’s Rs. 264 crore-IPO saw strong demands, especially from retail and non-institutional investors who has oversubscribed their portions by 10.81 and 9.03 times. While the qualified institutional purchasers’ quota was subscribed 1.24 times retail investors drove much of the excitement surrounding the stock.
Ahead of its IPO, GCEL has raised Rs.75 crore through its anchor book and the public issued which includes fresh equity worth Rs.173.85 crore along with an offer for sale of Rs.95 lakh shares by the promoter PKH ventures.
The company basically offers a wide range of construction services covering the residential, commercial, mixed-use infrastructure and industrial projects. By adding into, it provides operation and maintenance (O&M), mechanical, electrical and plumbing (MEP) services and finishing works. The company also plans to use the funds to raise in order to meet working capital requirements, general corporate expenses and potential unidentified inorganic acquisitions.
Shivani Nyati, Head of Wealth at Swastika Investmart Ltd advises investors to tread carefully. While the listing gains are encouraging, she suggests to keep a stop loss around the issue price to protect against potential downside risks.
“Investors should closely monitor the company's performance and market conditions. Those holding shares should consider booking profits but also remain cautious about long-term volatility,” Nyati said.
While GCEL’s listings provides the decent opportunity for short-term gains,investors need to consider their options carefully.
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