SRM Contractors Limited IPO

SRM Contractors Limited, is offering an exciting opportunity for investors through its Initial Public Offering (IPO). 

The company aims to raise crores ₹130.20 crores through a fresh issuance of 0.62 crore shares. 

Lead Manager & Registrar: Interactive Financial Services Ltd is the book running lead manager, while Bigshare Services Pvt Ltd is the registrar for the issue.

About the Company 

SRM Contractors Limited is a leading engineering, construction, and development company established in 2008. They specialize in infrastructure projects within the challenging terrain of Jammu & Kashmir and Ladakh. 

The company’s core services include:

Road Construction (including bridges): The company designs and builds new roads, widens existing ones, and improves highways for better connectivity in the region.

Tunnel Construction: Their expertise covers designing and constructing new tunnels, cut-and-cover tunnels for avalanche protection, and widening/upgrading existing tunnels.

Slope Stabilization: They offer slope stabilization solutions using various techniques to safeguard infrastructure, protect the environment, and ensure public safety.

Other Civil Construction Activities: The company also undertakes projects like government housing, drainage works, and irrigation & flood control systems.

Key Points about SRM Contractors Limited IPO

SRM Contractors Limited Key financials (in ₹ Cr)

Performance Indicators

Key Strengths of SRM Contractors Limited

1. Proven Track Record: Successfully completed 37 infrastructure projects with a total contract value of ₹770 crores.
2. Experience in Difficult Terrain: Extensive experience working in the challenging geographical conditions of Jammu & Kashmir and Ladakh.
3. Diverse Project Portfolio: Handled a variety of projects, from roads and bridges to tunnels and slope stabilization.
4. In-House Capabilities: Owns a fleet of modern machinery and equipment, reducing dependence on external suppliers.
5. Skilled Workforce: The team comprises over 293 skilled and unskilled employees, along with 22 dedicated engineers for design and execution.
6. Strong Clientele: Prestigious clients like NHIDCL, KRCL, ERA (Jammu), BRO, PWD (J&K), and more.
7. Integrated Business Model: Combined approach to procurement, construction, and equipment management ensures efficient project execution.

Key Risks of SRM Contractors Limited

1. Geographic Concentration Risk: The company’s majority business is concentrated in Jammu & Kashmir and Ladakh, which exposes the company to geographical risk.
2. Government Dependency Risk: Revenue concentration in government projects makes the company vulnerable to policy changes.
3. Client Concentration Risk: Dependence on a few clients makes the company vulnerable to their decisions.
4. Unfavourable Contract Terms Risk: The company might have to accept unfavourable terms due to client leverage.
5. Equipment Acquisition Risk: Delays or difficulties in acquiring equipment can lead to project delays and cost overruns.
6. Competitive Bidding Risk: Failure to meet prequalification criteria or higher competitor bids could lead to losing contracts.
7. Early Contract Termination Risk: Clients terminating contracts early could disrupt finances.
8. Working Capital Risk: Working capital intensive nature of the business could lead to financing difficulties.
9. Project Concentration Risk: Dependence on road, tunnel, and slope stabilization projects limits revenue diversification.
10. Litigation Risk: Ongoing litigation could have a negative impact on the business.