SRM Contractors IPO subscribed 17.42 times on day 2, GMP increases further

The public issue of SRM Contractors, the engineering construction and development company, continued to garner strong response from investors, subscribing 17.42 times till the second day of bidding, i.e. March 27.

Investors bought 7.55 crore equity shares so far as against the IPO size of 43.4 lakh equity shares, as per the subscription data published by exchanges.

High networth individuals (non-institutional investors) provided the maximum support to the issue, picking 45.51 times the allotted quota, followed by retail investors who bid 13.95 times the reserved portion. Qualified institutional buyers bought 2.41 times the portion set aside for them.

The Jammu and Kashmir-based EPC contractor launched its maiden public issue on March 26 for fund raising of Rs 130.20 crore. The 62 lakh equity shares IPO comprises only a fresh issue by the company with no offer-for-sale component.

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SRM Contractors executes road, tunnel and slope stabilisation projects in Jammu & Kashmir and Ladakh and will utilise Rs 31.5 crore out of the net fresh issue proceeds for purchase of equipment/machineries, Rs 10 crore for repaying debt, Rs 46 crore for working capital requirements and Rs 12 crore for investment in project specific joint venture projects.

Given the consistent healthy subscription numbers, the trading premium for its IPO shares has also increased to 43 percent over the upper price band in the grey market, from 33 percent in previous session, the market observers said. The grey market is an unofficial platform wherein IPO shares can be bought and sold till the listing.

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The price band for the public issue, which closes on March 28, is Rs 200-210 per share.

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