SRM Contractors IPO: Price range set at ₹200-210 per piece, check issue details, key dates etc

SRM Contractors IPO price range is in the range of ₹200 tonnes ₹210 per share with a par value of ₹10. The issue will open for subscription on Tuesday, March 26th and close on Thursday, March 28th. Allocation to anchor investors for SRM Contractors' IPO is scheduled for Friday, March 22.

The minimum price is 20 times the par value of the shares and the maximum price is 21 times the par value of the shares. The price-to-earnings ratio based on diluted earnings per share for fiscal year 2023 for the issuer at the upper end of the price range is as high as 2.31 compared to the industry peer group average PE ratio of 32.15. The weighted average return on net assets for fiscal years 2023, 2022 and 2021 is 28.21%. The lot size of SRM Contractors' IPO is 70 shares and multiples of 70 shares thereafter.

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As part of the public offer, a minimum of 15% of the shares are intended for non-institutional institutional investors (NII), a maximum of 50% of the shares are for qualified institutional buyers (QIB) and at least 35% of the shares are intended for private investors.

The allotment date for the IPO of SRM Contractors is tentatively scheduled for Monday, April 1 and initiation of refunds will take place on Tuesday, April 2, while the shares will be deposited in the demat account of the allottees on the same day after Refund process will be credited. The SRM Contractors share price is expected to list on the BSE and NSE on Wednesday, April 3.

The company's promoters are Ashley Mehta, Puneet Pal Singh and Sanjay Mehta.

The Company specializes in civil engineering construction and development, with its principal activity being the construction of highways (including bridges), tunnels, slope stabilization projects and other various civil construction projects in the Union Territories of Jammu & Kashmir and Ladakh.

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For infrastructure projects, the company carries out construction work as an item rate contractor and as an engineering, procurement and construction (EPC) contractor. The company also takes on subcontracting contracts for the construction of infrastructure projects.

According to Red Herring Prospectus (RHP), the company's listed competitors are Man Infraconstruction Ltd (with a P/E ratio of 46.87), ITD Cementation India Ltd (with a P/E ratio of 46.56), Likhitha Infrastructure Ltd (with a P/E ratio of 46, 56). E of 17.42) and Udayshivakumar Infra Ltd (with a P/E ratio of 21.17).

Between March 31, 2022 and March 31, 2023, SRM Contractors Limited's profit after tax (PAT) increased by 6.71% while revenue increased by 13.24%.

SRM Contractors IPO details

The SRM Contractors IPO consists of a fresh issue of up to 62,00,000 equity shares aggregating up to ₹130.20 crore. There is no offer component.

The Company intends to use the net proceeds from the offering to fund the following objectives: meeting working capital needs; partial or full repayment of outstanding secured loans received by the Company; Investments in project-specific joint venture projects; and general corporate purposes. In addition, investment requirements for the purchase of equipment and machines are supported.

Bigshare Services Pvt Ltd is the registrar for the IPO of SRM Contractors while Interactive Financial Services Ltd is the book-running lead manager.

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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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