SRM Contractors Limited IPO
- Share.Market
- 3 min read
- 19 Mar 2024
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
IPO Opens On | March 26, 2024 |
IPO Closes On | March 28, 2024 |
Date of Listing | April 3, 2024 |
Price Band Per Share | ₹200 to ₹210 |
Lot Size | 70 Shares |
Minimum investment | ₹14,000 |
Total Issue Size | ₹130.20 Cr |
Fresh Issue Component | ₹130.20 Cr |
Exchanges Listing On | BSE, NSE |
SRM Contractors Limited Key financials (in ₹ Cr)
Period Till | 31 Mar 2021 | 31 Mar 2022 | 31 Mar 2023 |
Assets | 1,124.70 | 1,202.16 | 1,373.62 |
Revenue | 1,619.47 | 2,655.09 | 3,006.51 |
Profit After Tax | 82.73 | 175.68 | 187.46 |
Net Worth | 268.47 | 444.15 | 631.61 |
Reserves and Surplus | 253.2 | 428.88 | 464.12 |
Total Borrowing | 319.58 | 315.24 | 471.58 |
Performance Indicators
ROCE | 35.41% |
Debt/Equity | 0.75 |
RoNW | 29.68% |
P/BV | 5.57 |
PAT Margin | 6.24% |
Key Strengths of SRM Contractors Limited
- Proven Track Record: Successfully completed 37 infrastructure projects with a total contract value of ₹770 crores.
- Experience in Difficult Terrain: Extensive experience working in the challenging geographical conditions of Jammu & Kashmir and Ladakh.
- Diverse Project Portfolio: Handled a variety of projects, from roads and bridges to tunnels and slope stabilization.
- In-House Capabilities: Owns a fleet of modern machinery and equipment, reducing dependence on external suppliers.
- Skilled Workforce: The team comprises over 293 skilled and unskilled employees, along with 22 dedicated engineers for design and execution.
- Strong Clientele: Prestigious clients like NHIDCL, KRCL, ERA (Jammu), BRO, PWD (J&K), and more.
- Integrated Business Model: Combined approach to procurement, construction, and equipment management ensures efficient project execution.
Key Risks of SRM Contractors Limited
- Geographic Concentration Risk: The company’s majority business is concentrated in Jammu & Kashmir and Ladakh, which exposes the company to geographical risk.
- Government Dependency Risk: Revenue concentration in government projects makes the company vulnerable to policy changes.
- Client Concentration Risk: Dependence on a few clients makes the company vulnerable to their decisions.
- Unfavourable Contract Terms Risk: The company might have to accept unfavourable terms due to client leverage.
- Equipment Acquisition Risk: Delays or difficulties in acquiring equipment can lead to project delays and cost overruns.
- Competitive Bidding Risk: Failure to meet prequalification criteria or higher competitor bids could lead to losing contracts.
- Early Contract Termination Risk: Clients terminating contracts early could disrupt finances.
- Working Capital Risk: Working capital intensive nature of the business could lead to financing difficulties.
- Project Concentration Risk: Dependence on road, tunnel, and slope stabilization projects limits revenue diversification.
- Litigation Risk: Ongoing litigation could have a negative impact on the business.