SRM Contractors IPO - Investment Rationale, Financials, Key Strategies, Risks And More: Anand Rathi

Anand Rathi's IPO Report

SRM Contractors Ltd. launched its initial public offering today to raise up to Rs 130.2 crore and the offer concludes on March 28. It comprises entirely a fresh issue of up to 62 lakh equity shares.

The engineering construction and development company has fixed a price band of Rs 200 to Rs 210 per share. The minimum order lot is 70.

Objects of the Issue

• Funding capital expenditure requirements for the purchase of equipment/machinery.

• Funding working capital requirements of their company.

• Full or part repayment and/or prepayment of certain outstanding secured borrowings availed by the company.

• Investment in project Specific Joint Venture Projects.

• General corporate purposes.

Valuation and outlook

SRM Contractors has emerged as a key player in the infrastructure construction industry in the UT of Jammu and Kashmir and Ladakh. Executing several road, tunnel, and slope stabilisation projects over 15 years.

The company has an experience and has developed technical capabilities to execute projects in hilly/challenging terrain in the region, thereby being one of the reliable partners in nation-building.

We believe that valuations of the company is fairly priced and recommend a 'Subscribe-Long Term' rating to the IPO.

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