IPO Watch: SEBI RA Recommends Subscribing To Globe Civil Projects

The initial public offering (IPO) for Globe Civil Projects opened on Tuesday and closes on June 26. The IPO is priced between ₹67 and ₹71 per share, and investors can apply for a minimum of 211 equity shares, or multiples after that.

SEBI-registered analyst Aditya Hujband recommends applying for the Globe Civil Projects IPO.

Its grey market premium (GMP) stands at ₹15 per share. This suggests a potential listing price of ₹86 per share, a 21.13% premium over the upper price band limit.

The company plans to use the IPO funds to meet working capital requirements, purchase construction equipment and machinery, and address general corporate purposes.

What Works?

Globe Civic Projects’ strength lies in its two decades of experience and proven track record in executing complex infrastructure projects across multiple states. They maintain a healthy order book with a deal pipeline of nearly ₹893 crore, showing business visibility for the next three years. 

They have established ties with reputed government and public sector clients, providing stability and repeat business. Its CPWD Class-I registration allows participation in large-scale government tenders and projects. 

 Key Risks

Speaking of risks, the company is heavily dependent on government projects, making it sensitive to policy changes and delays. The business is also capital-intensive, requiring significant upfront funding, which may stress liquidity. 

And, a high share of revenue comes from a few major clients, increasing risk if contracts are lost or delayed.

Established in 2002, Globe Civil Projects specializes in infrastructure development and has executed projects across 11 Indian states. The company primarily focused on three sectors: Transport and Logistics, Social and Commercial Infrastructure, and Non-Infrastructure (including housing and commercial offices). 

Some of their notable projects include the construction of indoor stadiums for the Commonwealth Games 2010, ward blocks for GTB Hospital in New Delhi, and the infrastructure for the Indian Institute of Management, Noida. 

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