Globe Civil Projects IPO Day 3: Issue subscribed 86.04x. Check GMP. Should you apply or not?

Globe Civil Projects IPO Day 3: The public offering for Globe Civil Projects was entirely subscribed on the opening day of bidding, Tuesday, June 24. The response from investors for the civil construction and infrastructure development firm has been exceptionally positive, showing strong subscription figures. The offering period concludes today, Thursday, June 26.

Globe Civil Projects Limited is a full-service Engineering, Procurement, and Construction (EPC) company situated in New Delhi.

The firm has successfully executed projects in 11 states throughout India, including Uttar Pradesh, Haryana, Delhi, Maharashtra, Andhra Pradesh, Karnataka, Gujarat, Chhattisgarh, Rajasthan, Uttarakhand, and Himachal Pradesh. As of August 31, 2024, the company's total order backlog stands at ₹8,929.45 million, covering 14 different projects.

According to the red herring prospectus (RHP), the company's listed competitors include B L Kashyap and Sons Ltd (with a P/E ratio of 29.57), Ceigall India Ltd (with a P/E ratio of 12.88), PSP Projects Ltd (with a P/E ratio of 20.38), Capacit’e Infraprojects Ltd (with a P/E ratio of 20.56), and Ahluwalia Contracts (India) Ltd (with a P/E ratio of 16.41).

The Globe Civil Projects price band has been fixed in the range of ₹67 to ₹71 per equity share of the face value of ₹10. The Globe Civil Projects IPO lot size is 211 equity shares and in multiples of 211 equity shares thereafter.

Globe Civil Projects IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Tentatively, Globe Civil Projects IPO basis of allotment of shares will be finalised on Friday, June 27, and the company will initiate refunds on Monday, June 30 while the shares will be credited to the demat account of allottees on the same day following refund. Globe Civil Projects share price is likely to be listed on BSE and NSE on Tuesday, July 1.

Globe Civil Projects IPO Day 3 LIVE: Globe Civil Projects IPO Subscription Status

Globe Civil Projects IPO subscription status is 86.04 times on day 3. The retail portion was subscribed 53.72 times, and NII portion has been booked 143.15 times, Qualified Institutional Buyers (QIBs) portion has received 99.76 times bids.

The company has received bids for 1,00,94,60,714 shares against 1,17,32,392 shares on offer, according to data on BSE.

Globe Civil Projects IPO Day 3 LIVE: Review

Canara Bank Securities states that the issue is reasonably valued at approximately 20 times the price-to-earnings ratio at the upper end, aligned with FY 24 financials, while the average for competitors is comparable. Conversely, the price-to-book ratio stands at 4 times, which is marginally above the competitors' average of 3 times.

Due to a significant reliance on government projects, the company's working capital days have increased from 78 in FY 22 to 148 in the first nine months of FY 25. Given the heavy dependence on government projects, the brokerage assign a NEUTRAL rating, suggesting that investors with a long-term focus may want to evaluate this opportunity based on their personal assessment.

Globe Civil Projects IPO Day 3 LIVE: IPO details

Globe Civil Projects IPO, which is worth ₹119 crore, comprises a fresh issue of 1,67,60,560 equity shares. There is no offer for sale (OFS) component.

Globe Civil Projects IPO intends to use the net proceeds from the offering for various purposes, including financing the company's working capital needs, investing in the acquisition of construction equipment and machinery, and addressing general corporate needs.

The lead manager of the issue is Mefcom Capital Markets Ltd, and the registrar of the issue is KFin Technologies Ltd.

Globe Civil Projects IPO Day 3 LIVE: Globe Civil Projects IPO GMP today

Globe Civil Projects IPO GMP today is +15. This indicates Globe Civil Projects share price was trading at a premium of ₹15 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Globe Civil Projects share price is indicated at ₹86 apiece, which is 21.13% higher than the IPO price of ₹71.

According to the grey market trends observed over the past 12 sessions, the IPO's GMP is trending upward, indicating a promising listing ahead. The minimum GMP recorded is ₹0.00, while the maximum GMP reaches ₹15.00, as stated by experts at investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.