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SRM Contractors Subscription Status- Investors Subscribed 3.56 Times on Day 1



SRM Contractors IPO Day 1 Subscription Status


On the first day of bidding on Tuesday, SRM Contractors' initial public offer was subscribed to 3.56 times.


According to NSE data, out of the 43,40,100 shares on offer, bids were received for 2,04,05,910 shares during the IPO.


As per NSE Data, 9.34 times as many people subscribed to the non-institutional investor category as to the retail individual investor (RII) segment, which received 4.59 times as many subscribers. Qualified Institutional Buyers (QIBs) had their quota subscribed 1.58 times over.


The pricing range for the new offering of up to 62,00,000 equity shares in the Initial Public Offering (IPO) is Rs 200-210 per share.


SRM Contractors has established itself as a significant player in the engineering construction and development sector, primarily focusing on infrastructure projects such as roads, bridges, tunnels, and slope stabilization works. Founded in 2008, the company has been instrumental in the development of the Union Territories of Jammu & Kashmir and Ladakh, contributing to the construction and maintenance of critical infrastructure in these challenging terrains.

 

The company is spearheaded by a team of promoters who have been pivotal in its growth and success. The promoter family includes Sanjay Mehta, Ashley Mehta, and Puneet Pal Singh, who hold key managerial positions and are actively involved in the strategic decisions of the company. Their combined expertise and leadership have steered SRM Contractors through various projects, ensuring quality and efficiency.

 

SRM Contractors originated from the picturesque and challenging landscapes of Jammu & Kashmir. The company's roots in this region have equipped it with unique insights and capabilities to undertake construction projects in some of the most difficult terrains in India.


As SRM Contractors continues to grow and evolve, it remains committed to its founding principles of quality, resilience, and innovation, striving to build infrastructure that propels India's growth and connectivity. The company's journey from its humble beginnings to becoming a name synonymous with infrastructure excellence is a testament to the vision and dedication of its founders and the entire team at SRM Contractors.


SRM Contractors Ltd. has shown consistent growth in its financial performance over the past few years. As of March 2023, the company reported a net sales income of ₹300.29 crores, which is a significant increase from the previous year's ₹263.61 crores. This upward trend is also reflected in the net profit figures, with the company achieving ₹18.75 crores in the same fiscal year, slightly up from ₹18.31 crores in the preceding year. The detailed annual financial results indicate a robust growth in revenue and a steady profit margin, demonstrating the company's strong market presence and operational efficiency. The net profit margin, a critical indicator of profitability, has also seen a positive trajectory, which suggests that SRM Contractors Ltd. is effectively converting sales into actual profit, ensuring a healthy financial status for the company.


SRM Contractors issued 18,59,900 shares at an issue price of Rs 210 each, raising Rs 39.06 crore from three anchor investors. Qualified institutional investors (QIBs) will receive 50% of the net offer from SRM Contractors, with non-institutional investors (NIIs) receiving 15% of the shares. Thirty-five percent of the net offer will go to retail investors.


SRM Contractors Limited, established in 2008, is a construction and development company with a focus on infrastructure projects in the challenging terrains of the Union Territories of Jammu and Kashmir and Ladakh. The company specializes in the construction of roads, including bridges, tunnels, and slope stabilization works. Known for its quality control system and satisfaction guarantee, SRM Contractors prides itself on unrivaled workmanship, professional and qualified teams, and personalized solutions tailored to the environmental sensitivities of the regions they operate in. With two decades of experience, they have become a prominent player in civil construction, undertaking heavy civil works and contributing significantly to the infrastructure development in these areas.


SRM Contractors IPO Details


  • Issue Date: The issue date in an IPO, also known as the initial offering date, is when a company's stock is first made available for public purchase. This date is a significant milestone in the process of an initial public offering, marking the transition of a company from private to public status. (Issue Date: March 26, 2024 to March 28, 2024).

  • Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Wednesday, April 3, 2024).

  • Face Value of Shares: The face value of shares in an IPO, also known as the nominal or par value, is a predetermined fixed price set by the company and mentioned in its memorandum of association. It represents the initial capital contributed by the founders and is used for accounting and regulatory purposes. During an IPO, shares are typically offered at a price higher than the face value, which includes a premium based on market demand and the company's performance indicators. (IPO Face Value: ₹10 per share).

  • Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹200 to ₹210 per share).

  • Lot Size: In an Initial Public Offering (IPO), the lot size refers to the minimum number of shares an investor can apply for. It is a pre-determined set of shares that investors must bid for, and applications must be in multiples of this lot size. The lot size ensures a standardized bidding process and helps in the fair allocation of shares among investors. (Lot Size: 70 Shares).

  • Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 6,200,000 shares (aggregating up to ₹130.20 Cr)).

  • Fresh Issue: A fresh issue of shares in an IPO refers to the creation and sale of new shares by a company to the public for the first time to raise capital. Unlike an Offer for Sale, where existing shareholders sell their shares, a fresh issue results in new funds going directly to the company, which can be used for various purposes such as expansion, debt repayment, or investment in new projects. This process dilutes the existing shareholding but does not provide an exit route for current investors. (Fresh Issue: 6,200,000 shares (aggregating up to ₹130.20 Cr)).

  • Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Book Building IPO).

  • Listing At: The listing of shares in an IPO refers to the process where a company's shares are introduced to the public stock market, allowing investors to buy and sell the shares through a stock exchange. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: BSE, NSE).

  • Retail Shares Offered: This refers to the portion of the total shares being made available specifically for individual investors, distinct from institutional investors like banks or hedge funds. Regulatory bodies often mandate a minimum percentage of shares be reserved for retail investors, aiming to promote broader public participation in the capital markets. (Retail Shares Offered: 2,170,000 (35.00%)).

  • QIB Shares Offered: QIBs are institutional investors such as banks, mutual funds, insurance companies, pension funds, etc., who have expertise and financial resources to invest in the securities market. They are considered as informed and sophisticated investors who can assess the risks and returns of an IPO. QIBs can bid for up to 50% of the total shares offered in an IPO via the profitability route, or up to 75% of the total shares offered in an IPO via the QIB route. QIBs have to pay only 10% of the bid amount at the time of application, and the rest after the finalization of the basis of allotment. (QIB Shares Offered: 1,240,100 (20.00%)).

  • NII (HNI) Shares Offered: NII stands for Non-Institutional Investors, which includes High Net-worth Individuals (HNIs) who bid for shares worth more than ₹200,000. The NII category is reserved for investors who do not fall under the retail or Qualified Institutional Buyers (QIBs) categories. Typically, a certain percentage of the IPO, usually around 15%, is allocated for NIIs to ensure a wider distribution of shares. HNIs within the NII category often have a higher chance of allotment compared to retail investors, making it an attractive option for those looking to invest larger sums in an IPO. (930,000 (15.00%). 

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