SRM Contractors launched their IPO on March 26 to raise a total of Rs 130.20 crore by offering 6.2 million shares. The company opened the subscription to its IPO on March 26 and closed on March 28. The company set the IPO’s price band at Rs 200 to Rs 210 per share.
It is expected that the IPO will finalise on April 1 and will get listed on both the bourses -NSE and BSE – by April 3. The company has set the minimum application for a lot size of 70 shares valued at Rs 14,700.
SRM Contractors is in the business of the construction and development of roads, tunnels, slope stabilisation works, and other construction activities based in Jammu & Kashmir and Ladakh.
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According to SRM, the collected funds will be used to fund capital expenditure for the purchase of new machinery, payment of borrowings, working capital expenditure, investment in joint ventures, and other general corporate purposes.
The construction company has raised Rs 39.06 crore from the anchor investors. It offered 1.8 million shares to the anchor investors at Rs 210 per equity share.
The company has kept Interactive Financial Services as the book-running lead manager for the issue, while Bigshare Services as the registrar.
Factors like rapid urbanization, increased freight movement, and demand for improved infrastructure have been pushing tunnel development and construction across the country. This is driving a demand for new tunnels to connect different parts of the country and improve transportation efficiency due to this the tunnel construction is expected to continue for a few more years.
When compared state-wise in terms of upcoming tunnels, Jammu & Kashmir is the pioneer offering the largest pipeline network of around 200 tunnels. Union Territory of Ladakh being a border area is of significant importance for national security as well as a popular tourist location thus underscoring the key role of developing a robust road infrastructure. Executing several road, tunnel, and slope stabilization projects over 15 years, SRM Contractors Limited has the experience and has developed technical capabilities to execute projects in hilly/challenging terrain in the region, thereby being one of the reliable partners in nation-building, said StoxBox in an IPO note.
“On the upper price band, the issue is valued at a P/E of 23.1x based on FY2023 earnings which we feel is fairly valued. We, therefore, recommend a “Subscribe” rating for the issue,” said StoxBox.
