Introduction
In this blog post, we will be discussing the recent IPO (Initial Public Offering) of a company called SRM Contractors Limited. We will cover all the basic points from this IPO, ranging from its incorporation in 2008 to its business verticals and the listing details. This IPO is scheduled to open on March 26th and close on April 28th, with the allotment decision being made on April 1st. The refund or share allocation is expected to start from April 2nd to April 3rd.
Company Overview
SRM Contractors Limited is an Indian construction and development company. This company constructs roads, bridges, and tunnels in Jammu Kashmir and Ladakh. This company is different from other construction companies because their work is highly complex and risky. This company has experience and expertise which gives them the ability to work in these areas.
SRM Contractors Limited is a construction and development company. They primarily focus on two business verticals: road projects and tunnel projects. The IPO has a total size of 130 crores, which is relatively small compared to other IPOs. It is important to note that irrespective of the category you apply for, the minimum amount of application is the same. For example, in the HNI (High Net Worth Individual) category, you need to apply for a minimum of 14 lots, and for the retail category, you need to apply for a minimum of 70 shares. Now, let’s move on to the financial aspects of this IPO.
Company Business Model
SRM Contractors Limited started its business journey in the year 2008. Till now, this company has completed a total of 37 infrastructure projects. After this, the company works in two ways. The first method is individual construction, where the company employs all the processes itself. Another method is subcontracting assignments, where the company partners with other companies.
SRM Contractors Limited Business Segment
SRM Contractors Limited operates on four major business segments. The first segment is road projects, where the company constructs roads, bridges, and highways in Jammu and Kashmir and Ladakh. The second segment is tunnel projects, where the company builds new tunnels. The third segment is slope stabilization, where the company works to stabilize the land and make it safe. The fourth segment is Adarsh Miscellaneous Civil Construction Activities, where the company constructs government and private buildings.
Financial Analysis
The financials of SRM Contractors Limited show positive growth in total assets and revenue. The revenue growth rate for 2022-2023 is projected to be 13.2%. The profit after tax has also increased from 6.71 crores in 2022 to 17.5 crores in the current financial year. The profit after tax for 2023 is expected to be around 21 crores. The return on capital employed is 29.4%, and the return on net worth is 25.02%. The PAT (Profit After Tax) margin is around 9%. Overall, the financials of the company indicate a positive trend.
Company Exchange
The main clients of SRM Contractors Limited are Government Entities, such as Government of Jammu and Kashmir, Government of India, Economic Reconstruction Agency, Railway Corporation, Irrigation and Flat Control Department, etc. The financial position of the company is also strong. If we look at the data of the last three years, there has been a continuous increase in the asset revenue and profit of the company. The company’s financial parameters are also very good, such as return on capital employed and data to equity ratio.
IPO Information
The IPO of SRM Contractors Limited is going to start from 26th March and the last date to apply is 28th March. The share price will be between ₹2000000 and you will have to buy at least 70 shares for this. Through the IPO, the company wants to invest Rs 130 crore and Rs 20 lakh. Apart from this, the company wants to purchase some equipment and make loan payments.
SRM Contractors Limited aims to utilize the IPO proceeds for strategic investments, including the acquisition of new equipment to enhance operational efficiency and expand its capabilities in delivering construction projects. Moreover, a portion of the funds raised will be allocated towards meeting existing loan obligations, thereby reducing financial leverage and strengthening the company’s balance sheet.
This IPO presents an opportunity for investors to participate in the growth trajectory of SRM Contractors Limited, a company poised to capitalize on the burgeoning demand for infrastructure development in the region. With a well-defined utilization plan for the proceeds, coupled with its track record of execution and commitment to quality, SRM Contractors Limited endeavors to create sustainable value for its shareholders while contributing to the advancement of infrastructure development initiatives.
Expectations From Tomorrow’s Market
Based on the current market trend, it is expected that the market will continue to be in an uptrend. The market is currently in a neutral trend, and to move into a positive trend, we need to observe volume distribution days. Considering the recent statement from the US Fed Chairman and the overall performance of global markets, it is expected that there will be a premium in the grey market for this IPO. However, it is important to note that market conditions and subscriptions play a significant role in the final outcome.
Long Term Investment For The Company
SRM Contractors Limited has expertise in construction and this makes them a unique business. Apart from this, there is a great need to do construction in those areas. But, there are many risks for the company, such as changes in political and economic conditions. Therefore, before making a long-term investment, you should consider your risk taking capacity.
Conclusion
In conclusion, the IPO of SRM Contractors Limited presents an opportunity for investors to consider. The company has shown positive growth in its financials, and the market conditions seem favorable. However, it is essential to evaluate your own risk appetite and make an informed decision. If you are interested in applying for this IPO, make sure to check the subscription details and open a demat account if you haven’t already. Keep an eye on the market trend and the performance of the banking sector, as it can significantly impact the IPO’s outcome.
SRM Contractors Limited is a high-quality construction company that builds roads, bridges, and tunnels in Jammu Kashmir and Ladakh. Considering the company’s business model, financial condition, and IPO details, it can be considered as a good investment. However, you are advised to seek your personal financial advice and invest keeping in mind your risk taking capacity.
Disclaimer: The information is only for information purpose only. It is always recommended to consult with certified financial experts before making any investment decisions. Follow busymoneyfreak.com .