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Giriraj Civil NSE SME IPO review (May apply)

Review By Dilip Davda on March 15, 2018

Giriraj Civil Developers Ltd. (GCDL) is a civil works contracting and engineering company. Its current concentration is on the Railway sector projects, where company undertakes a wide scope of work which includes construction of foot over bridges, platform extensions; sick line sheds, stabling lines etc. It has also venture into other infrastructural projects for government / semi-government bodies like MCGM and MRVC and for various private players. Most of GCDL’s projects undertaken are in the states of Maharashtra and Gujarat. Company has successfully completed several projects since inception in 2005 and currently has 21 ongoing projects.

To part finance its repayment of certain loans and working capital needs, GCDL is coming out with a maiden IPO of 900000 equity shares of Rs. 10 each at a fixed price of Rs. 100 per share to mobilize Rs. 9.00 crore. Issue opens for subscription on 19.03.18 and will close on 21.03.18. Issue comprises fresh issue of 300000 equity shares and an offer for sale of 600000 equity shares. Minimum application is to be made for 1200 shares and in multiples thereon, thereafter. Post allotment shares will be listed on NSE SME Emerge. Issue is solely lead managed by Aryaman Financial Services Ltd. and Cameo Corporate Services Ltd. is the registrar to the issue. Issue constitutes 27.74% of the post issue paid up capital of the company. Average cost of acquisition of the shares by the promoters is Rs. 3.29 and Rs. 3.89 per share. Having issued initial equity at par, it raised further equity in the price range of Rs. 25 to Rs. 85 and has also issued bonus shares in the ratio of 1 for 1 in November 2017. Post issue its current paid up equity capital of Rs. 2.94 crore will stand enhanced to Rs. 3.24 crore.

On performance front, GCDL has posted turnover/net profits of Rs.56.74 cr. / Rs. 1.97 cr. (FY14), Rs. 49.95 cr. / RS. 1.89 cr. (FY15), Rs. 48.21 cr. / Rs. 1.75 cr. (FY16) and Rs. 45.27 cr. / Rs. 1.79 cr. (FY17). For first nine months of the current fiscal, it has earned net profit of Rs. 1.35 cr. on a turnover of Rs. 33.99 crore. Thus its top and bottom line has shown declining trends. For last three fiscals it has posted an average EPS of Rs. 5.91 and an average RoNW of 9.26%. Issue is priced at a P/BV of1.56 on the basis of its NAV of Rs. 64.22 as on 31.12.17 and at a P/BV of 1.48 on the basis of its post issue NAV of Rs. 67.53. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of around 18 against industry average of 35 and listed peers trading at CMM Infra (29), Dilip Buildcon (22), KNR Construction (17) (as on 15.03.18). Considering declining trends in performance, issue appears fully priced.

On merchant banker’s front, this is 29th mandate from its stable in the past three years (includes 1 main board IPO and the rest SME). Out of last 10 listings, 4 opened at discount, 1 at par, 4 with the premium ranging from 1% to 20%. The only main board listing (Apollo Micro) opened at a premium of around 73.8% on the day of listing.

Conclusion / Investment Strategy

Considering declining trends in performance issue appears fully priced. Cash surplus risk savvy investors may consider investment for long term on their own risk.

Review By Dilip Davda on March 15, 2018

Review Author

DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.

About Dilip Davda

Dilip Davda

Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.

Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.

(Dilip Davda -SEBI registered Research Analyst-Mumbai,

Registration no. INH000003127 (Perpetual)

Email id: ).

Giriraj Civil Developers IPO FAQs

  1. 1. Why Giriraj Civil Developers IPO?

    The initial public offer (IPO) of Giriraj Civil Developers Ltd offers an early investment opportunity in Giriraj Civil Developers Ltd. A stock market investor can buy Giriraj Civil Developers IPO shares by applying in IPO before Giriraj Civil Developers Ltd shares get listed at the stock exchanges. An investor could invest in Giriraj Civil Developers IPO for short term listing gain or a long term.

  2. 2. How is Giriraj Civil Developers IPO?

    Read the Giriraj Civil Developers IPO recommendations by the leading analyst and leading stock brokers.

  3. 3. Giriraj Civil Developers IPO what should investors do?

    Giriraj Civil Developers IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Giriraj Civil Developers IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.

  4. 4. Is Giriraj Civil Developers IPO good?

    Our recommendation for Giriraj Civil Developers IPO is to subscribe for long term.

  5. 5. Is Giriraj Civil Developers IPO worth Investing?

    As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Giriraj Civil Developers IPO.

  6. 6. When will Giriraj Civil Developers IPO allotment status?

    The Giriraj Civil Developers IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Giriraj Civil Developers IPO allotment status to check.

  7. 7. When will Giriraj Civil Developers IPO list?

    The Giriraj Civil Developers IPO will list on Monday, April 2, 2018, at NSE SME.