IPO Launch Date, Evaluation, Pricing, and Allocation Particulars of SRM Contractors

SRM Contractors is gearing up for its Initial Public Offering (IPO), with the IPO date set from March 26 to March 28. The company aims to raise approximately ₹130.20 crores through the IPO, which includes a fresh issue of ₹130.20 crores and an offer for sale of up to 6,200,000 equity shares priced at ₹10 each. The allocation breakdown stands at 35% for retail investors, 50% for Qualified Institutional Buyers (QIB), and 15% for High Net Worth Individuals (HNI).

SRM Contractors specializes in engineering construction and development, focusing primarily on projects involving roads (including bridges), tunnels, slope stabilization, and various civil construction activities within the Union Territories of Jammu & Kashmir and Ladakh. Their services encompass both EPC (Engineering, Procurement, and Construction) contracting and item-rate based construction for infrastructure projects. Additionally, the company undertakes subcontracting assignments for infrastructure construction ventures. With a proven track record in executing projects in the challenging terrains of Jammu & Kashmir and Ladakh, they have cultivated expertise to tackle infrastructure projects in difficult terrains effectively. This has positioned them as a significant player in the infrastructure construction industry within these regions (Source: D&B Report).

The company holds ISO 9001:2015 certification and is classified as a class A contractor with the Public Work (R&B) Department, Jammu & Kashmir. They are pre-qualified to independently bid on projects tendered by governmental authorities and other entities funded by the Government of India, with contract values up to ₹30,000 lakhs and ₹50,000 lakhs for road (including bridges) and tunnel construction EPC contracts, respectively. Leveraging the growth in road and tunnel construction activities and government initiatives to develop infrastructure in Jammu & Kashmir and Ladakh, they have expanded their portfolio to include standalone bridges, larger slope stabilization works, and other civil construction activities.

As an EPC contractor, their services encompass detailed project engineering, procurement of construction materials and equipment, project construction and execution, and operation and maintenance as per contractual provisions. With a skilled workforce, robust resources, and a fleet of machinery and equipment, coupled with their engineering prowess, they have the capacity to handle multiple projects simultaneously. The company attributes its success to its resources, quality of work, and project execution capabilities, which have strengthened existing client relationships and facilitated the acquisition of projects from new clients.

SRM Contractors IPO Details

IPO Date March 26, 2024 to March 28, 2024
Listing Date April 3, 2024
Face Value ₹10 per share
Price Band ₹200 to ₹210 per share
Lot Size 70 Shares
Total Issue Size 6,200,000 shares (aggregating up to ₹130.20 Cr)
Fresh Issue 6,200,000 shares (aggregating up to ₹130.20 Cr)
Issue Type Book Built Issue IPO
Listing At BSE, NSE
Share holding pre issue 16,744,200
Share holding post issue 22,944,200

SRM Contractors IPO Timeline (Tentative Schedule)

IPO Open Date Tuesday, March 26, 2024
IPO Close Date Thursday, March 28, 2024
Basis of Allotment Monday, April 1, 2024
Initiation of Refunds Tuesday, April 2, 2024
Credit of Shares to Demat Tuesday, April 2, 2024
Listing Date Wednesday, April 3, 2024
Cut-off time for UPI mandate confirmation 5 PM on March 28, 2024

Key Performance Indicator

KPI Values
ROCE 29.43%
Debt/Equity 0.5
RoNW 25.02%
P/BV 4.17
PAT Margin (%) 8.98

Objects of the Issue (SRM Contractors IPO Objectives)

The company proposes to utilize the Net Proceeds from the Issue towards funding the following objects:
  1. Funding capital expenditure requirements for the purchase of equipment/machinery;
  2. Full or part repayment and/or prepayment of certain outstanding secured borrowings availed by the company;
  3. Funding the working capital requirements of the company;
  4. Investment in Project Specific Joint Venture Projects; and
  5. General Corporate Purpose.

SRM Contractors IPO Review (Apply)

The company specializes in specialized engineering construction projects such as roads, tunnels, slope stabilization, and more, and has consistently demonstrated growth in both revenue and profit margins. With orders totaling over Rs. 1199 crore as of December 2023, the company’s near-term prospects seem promising. While the issue seems fully priced based on FY24 annualized earnings, all other parameters are aligned positively, except for the Lead Managers’ poor track record. Investors may consider allocating funds for potential medium to long-term rewards.

SRM Contractors Limited Financial Information (Restated Standalone)

SRM Contractors Limited’s revenue increased by 13.24% and profit after tax (PAT) rose by 6.71% between the financial year ending with March 31, 2023 and March 31, 2022.

Period Ended 31 Dec 2023 31 Mar 2023 31 Mar 2022 31 Mar 2021
Assets 168.87 137.36 120.22 112.47
Revenue 242.28 300.65 265.51 161.95
Profit After Tax 21.07 18.75 17.57 8.27
Net Worth 37.24 63.16 44.41 26.85
Reserves and Surplus 67.48 46.41 42.89 25.32
Total Borrowing 42.32 47.16 31.52 31.96
Amount in ₹ Crore

SRM Contractors Company Financial Report

₹ in Crores
Year Revenue Expense PAT
2021 ₹161.95 ₹151.11 ₹8.27
2022 ₹265.51 ₹242.21 ₹17.57
2023 ₹300.65 ₹275.60 ₹18.75

Company Promoters

  • Sanjay Mehta
  • Ashley Mehta
  • Puneet Pal Singh