SRM Contractors share price extended gains and was locked in at 5% upper circuit after a muted listing. The Jammu & Kashmir and Ladakh-focused construction company, SRM Contractors shares made a flat debut in the Indian stock market today.
SRM Contractors shares were listed at ₹225 apiece, a premium of 7.14% to the issue price of ₹210 per share, on the BSE. The stock began trading with a 2.5% premium at ₹215.25 per share on NSE.
Soon after the listing, SRM Contractors share price was locked at 5% upper circuit at ₹236.20 apiece on the BSE. At this price, the stock was up by 12.48% from its IPO price. On NSE, SRM Contractors shares were 5% higher at ₹226.00 apiece.
SRM Contractors IPO listing price fell significantly short of expectations as the GMP today, or grey market premium today, was 42% earlier. SRM Contractors IPO also received a strong overall subscription of 86.57 times and this also added to the surprise of the flat listing, as per analysts.
Should investors hold the stock?
Investors in SRM Contractors IPO are now wondering whether they should hold the stock after listing or sell and book profits.
“Despite the strong subscription, some investors might have found the valuation at listing less attractive. Also, broader market conditions might have impacted investor sentiment and tempered listing gains,” said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.
Nyati believes SRM Contractors’ flat listing, while not what pre-listing indicators suggested, doesn’t necessarily negate its future potential.
“The company’s strong regional presence, in-house capabilities, and healthy order book remain positive points. However, a cautious approach is advisable,” she added.
SRM Contractors IPO Details
The Initial Public Offering (IPO) of SRM Contractors opened for subscription on March 26 and ended on March 28. The IPO allotment was finalized on April 1 and the shares were listed on April 3.
SRM Contractors IPO size was ₹130.20 crore which was entirely a fresh issue of 62 lakh equity shares. The IPO price band was set at ₹200 to ₹210 per share. SRM Contractors IPO was subscribed 86.57 times on the last day of bidding.
The company proposes to utilize the net issue proceeds towards funding capital expenditure requirements for the purchase of equipment/machinery, repayment and/or prepayment of certain outstanding secured borrowings, working capital requirements, and investment in project-specific joint venture projects.
Interactive Financial Services Ltd is the book-running lead manager of the SRM Contractors IPO, while Bigshare Services Pvt Ltd is the IPO registrar.
SRM Contractors is an engineering construction and development company engaged primarily in the construction of roads (including bridges), tunnels, slope stabilization works and other miscellaneous civil construction activities in the Union Territory.
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Published: 03 Apr 2024, 11:52 AM IST