Garuda Construction and Engineering IPO

Garuda Construction and Engineering, Shiv Texchem IPOs to Open on Oct 8: Everything You Need to Know

Two significant Initial Public Offerings (IPOs) are set to open from October 8 to October 10, 2024: Garuda Construction and Engineering Ltd and Shiv Texchem Ltd. Together, these companies aim to raise ₹365 crore in the Indian stock market. Both IPOs are part of a broader wave of activity in the market following a record-breaking September with 52 IPOs, although this week is expected to experience a brief slowdown.

Garuda Construction and Engineering IPO

1. IPO Details

• IPO Size: ₹264.1 crore
• Price Band: ₹92 to ₹95 per share
• Shares Offered: Fresh issuance of 1.83 crore shares and an Offer for Sale (OFS) of 95 lakh equity shares by PKH Ventures (the promoter).

2. Use of Proceeds

Garuda Construction plans to utilize the ₹100 crore raised from the fresh issuance for working capital requirements. Additionally, some of the funds will be used for general corporate purposes.

3. Listing

The company’s shares will be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

4. Company Overview

Garuda Construction and Engineering is a prominent civil construction company that undertakes projects in residential, industrial, commercial, and infrastructure sectors. Its operations span multiple regions, including:

• MMR (Mumbai Metropolitan Region)
• Karnataka
• New Delhi
• Arunachal Pradesh
• Tamil Nadu
• Punjab
• Rajasthan

Shiv Texchem IPO

1. IPO Details

• IPO Size: ₹101.35 crore
• Price Band: ₹158 to ₹166 per share
• Shares Offered: Completely a fresh issuance of 61 lakh shares with no OFS component.

2. Use of Proceeds

Like Garuda, Shiv Texchem will also use the funds raised from the IPO for working capital requirements and general corporate purposes.

3. Listing

Shiv Texchem’s shares will be listed on the BSE SME (Small and Medium Enterprise) platform, which caters to smaller, growing businesses.

4. Company Overview

Shiv Texchem is an importer and distributor of hydrocarbon-based chemicals. Some of the chemicals they deal in include:

• Acetyls
• Alcohols
• Aromatics
• Monomers
• Nitriles
• Phenolics
• Isocyanates
• Glycols
• Ketones

Advantages

Garuda Construction and Engineering IPO

1. Diverse Project Portfolio: The company operates in multiple sectors—residential, industrial, and infrastructure—across key Indian states, ensuring diverse revenue streams.
2. Strong Market Presence: Its presence in critical regions like the MMR and New Delhi ensures access to high-value projects.
3. Working Capital Enhancement: The IPO proceeds will help boost its financial liquidity, enhancing the company’s ability to take on larger projects.

Shiv Texchem IPO

1. Specialized Market Niche: By focusing on importing and distributing hydrocarbon-based chemicals, Shiv Texchem operates in a specialized and growing sector.
2. No OFS Component: Since the IPO is entirely a fresh issuance, all proceeds will benefit the company, strengthening its operations and capital base.
3. SME Platform Listing: Listing on the BSE SME platform offers Shiv Texchem access to investors keen on smaller, high-growth companies.

Disadvantages

Garuda Construction and Engineering IPO

1. Competitive Market: The construction industry is highly competitive and cyclical, which could affect the company’s profitability if there are slowdowns in real estate and infrastructure development.
2. Dependence on Specific Regions: While the company operates in several states, its focus on certain key regions like MMR makes it vulnerable to economic fluctuations in those areas.

Shiv Texchem IPO

1. Market Volatility: As a small-cap company on the BSE SME platform, its shares could face higher price volatility, which may deter risk-averse investors.
2. Limited Track Record: Shiv Texchem’s specialized focus on hydrocarbons may limit its ability to diversify into other growth areas in the chemical sector.

Conclusion

Both Garuda Construction and Engineering and Shiv Texchem present attractive opportunities for investors, with each company offering a unique value proposition. Garuda is a diverse player in the construction industry, with strong operations in various regions of India, making it a potentially stable investment. Shiv Texchem, on the other hand, is a specialized player in the chemicals industry with a focus on hydrocarbons, which could appeal to investors looking for exposure to niche sectors.

However, investors must consider the inherent risks associated with each company. Garuda operates in a highly competitive construction industry, while Shiv Texchem may face challenges due to its small-cap status and market volatility. Both companies plan to use their IPO proceeds for working capital needs, which indicates their focus on enhancing liquidity and operational efficiency.

FAQs

1. When will the Garuda Construction and Shiv Texchem IPOs open?
   The IPOs will be live from October 8 to October 10, 2024.
2. What is the price band for Garuda Construction’s IPO?
   The price band is set at ₹92 to ₹95 per share.
3. How much is Garuda Construction aiming to raise?
   Garuda Construction plans to raise ₹264.1 crore.
4. What is the use of the funds raised in Garuda Construction’s IPO?
   The funds will be used primarily for working capital requirements and general corporate purposes.
5. What is the price band for Shiv Texchem’s IPO?
   The price band is set at ₹158 to ₹166 per share.
6. Where will the Shiv Texchem shares be listed?
   Shiv Texchem shares will be listed on the BSE SME platform.
7. What chemicals does Shiv Texchem deal in?
   Shiv Texchem imports and distributes hydrocarbon-based chemicals like acetyls, alcohols, aromatics, monomers, nitriles, phenolics, isocyanates, glycols, and ketones.

Garuda Construction and Engineering IPO

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