Navigating the IPO Frenzy: What You Need to Know About Garuda Construction IPO
Hey there! Lately, the market has been a rollercoaster—on the one hand, we’re witnessing back-to-back IPO launches; on the other, uncertainty looms due to global events. The US decided to throw some extra fuel to the fire, and now retail investors are caught in the middle. In all this chaos, Garuda Construction has launched its IPO. No, I’m not talking about that Garuda from KGF! This Garuda is all about construction, and their IPO just hit the market.
Now, as retail investors are facing turbulence, a big question arises: Is the market breaking out or breaking down? And more importantly, is this the right time to jump into a new IPO? Let’s break it down!
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Garuda Construction IPO: Should You Invest?
Now, coming back to the Garuda Construction IPO. It’s scheduled to open on the 8th of October and close on the 10th of October. Allotments will be done on the 11th, and if you get lucky, you can expect your shares by the 14th. Finally, it will be listed on the 15th of October.
But here’s the catch: Only 65% of the IPO is a fresh issue, and the rest 35% is an Offer for Sale (OFS). This means the company will only raise around ₹173 crores, while ₹90 crores will go to the promoters. This unbalanced ratio is something to consider carefully.
For retail investors, 35% of the allotment is reserved. So, there’s a decent chance to grab a piece of the pie, but it’s important to evaluate the market conditions before applying.
The Hidden Secret: Same Promoter, Different IPO
Here’s something interesting. The promoter behind Garuda Construction, Praveen Kumar Agarwal, was also the one behind another company, PKH Ventures. They launched an IPO not too long ago, but it was a complete failure—barely subscribed and eventually withdrawn. Despite the bullish market conditions at that time, the IPO couldn’t gather enough interest. The same promoter is now back with Garuda Construction’s IPO, which raises some eyebrows.
Financials—Are They Strong Enough?
Looking at the financials of Garuda Construction, things seem average. Over the last two years, both revenue and profits have dipped slightly. The company’s assets have grown, but not enough to make a significant impact. Their Return on Equity (ROE) stands at 36%, and Return on Capital Employed (ROCE) is at 46%, which is decent given that the company is debt-free. But is it enough to bet your money on this IPO? Maybe not.
Conclusion: Should You Skip This IPO?
Given the market volatility, the unbalanced 65:35 ratio, and the promoter’s past failure, this IPO seems a bit risky. While there might be a small rebound in the market by mid-October, it’s probably not worth the gamble. My advice? Skip this IPO and wait for better opportunities. More IPOs will come, and they might offer more solid prospects.
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Thanks for reading, and don’t forget to share this post with your friends who might be considering the Garuda IPO! Stay informed and trade smart!
Jai Hind!