SRM Contractors IPO Day 2: Check GMP, Subscription Status, Verification. Should you subscribe to the issue?

SRM Contractors' IPO got off to a good start yesterday (Tuesday 26 March) and will close on Thursday 28 March. According to BSE data, the total subscription status for SRM Contractors' IPO was 3.56 times on the first day. The non-institutional investors (NIIs) component was booked 6.26 times while the retail portion was subscribed 3.55 times. The qualified institutional buyers (QIBs) share was booked 1.57 times.

Also Read: SRM Contractors IPO Day 1: Issue sold out due to strong retail and NII interest; Check GMP, subscription status, etc

The IPO price range for SRM contractors is at ₹200 tonnes ₹210 per share, with a par value of ₹10. Bids can be made for multiples of 70 shares, with a minimum bid of 70. No less than 15% of the shares are intended for NII, a maximum of 50% of the shares for QIB and not less than 35% of the shares are intended for private investors .

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SRM Contractors IPO details.

The IPO of SRM Contractors was successful ₹39 crore from anchor investors on Friday, March 22.

The allotment date for SRM Contractors' IPO shares is tentatively set for Monday, April 1. The shares will be credited to the allottees' demat accounts on the same day as the redemption date, i.e. Tuesday, April 2. SRM Contractors share price is likely to be listed on the BSE and NSE on Wednesday, April 3.

Also Read: SRM Contractors IPO starts today: GMP, verification, subscription status, more details. Apply or not?

SRM Contractors is engaged in all types of civil construction projects in Jammu & Kashmir and Ladakh, two Union Territories. Its initiatives include the construction of tunnels, slope stabilization projects, roads (including bridges) and other smaller projects.

With the technical expertise to execute projects in the region's challenging terrain, the company has emerged as a major participant in the infrastructure development sector in the Union Territories of Jammu & Kashmir and Ladakh.

SRM Contractors IPO details

The SRM IPO comprises a fresh issue of up to 62,00,000 shares with an aggregate value of ₹130.20 crore. There is no offer component.

The Company plans to use the net proceeds from the offering to: meet working capital requirements; the full or partial repayment of existing secured loans; Participation in joint ventures tailored to specific projects; and general corporate purposes. The capital costs associated with the purchase of machines and systems are also supported.

The book running lead manager for SRM Contractors' IPO is Interactive Financial Services Ltd and the registrar is Bigshare Services Pvt Ltd.

Also Read: SRM Contractors IPO: 10 Important Risks to Consider Before Subscribing to the Issue

SRM Contractors IPO GMP today

SRM Contractors' IPO GMP is +95. This suggests that SRM Contractors' share price was trading at a premium of ₹95 on the gray market, according to investorgain.com.

The expected listing price of the SRM Contractors shares was also stated ₹305 per piece which is 45.24% more than the IPO price of ₹210, taking into account the upper end of the IPO price range and the current gray market premium.

Going forward, the IPO GMP expects a solid listing based on the actions of the last nine sessions on the gray market. According to the analyst report on investorgain.com, the lowest GMP is 25 and the highest is Rs 95.

“Gray market premium” indicates investors’ willingness to pay more than the issue price.

SRM Contractors IPO review

Dilip Davda, the contributing editor at Chittorgarh

According to Davda, the company shows continuous development in both sales and profits and is engaged in specialized engineering construction for highways, tunnels, slope stabilization, etc. As of December 2023, the company has orders worth more than ₹1199 crore, which suggests its capabilities. The issue appears to be fully priced based on annualized FY24 earnings. All other factors agree except for the lead manager's poor performance history. Investors can set aside money in anticipation of medium to long-term gains.

Also Read: SRM Contractors IPO starts tomorrow: GMP, issue details, 10 important things to know before investing ₹130 crore edition

Disclaimer: The above views and recommendations are those of individual analysts, experts and brokerage firms, not Mint. We recommend investors consult certified experts before making an investment decision.

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