Globe Civil Projects IPO: Key strengths and risks from RHP you need to know

Globe Civil Projects IPO: Civil construction and infrastructure developer Globe Civil Projects' ₹119 crore initial public offer, which is a fresh issuance of 1.68 crore shares, will open for public subscription on Tuesday, June 24. The issue will conclude on Thursday, June 26. The price band has been set at ₹67–₹71 per equity share, and a lot consists of 211 shares.

Proceeds to the tune of ₹75 crore will be used for working capital needs, and ₹14.26 crore for capital expenditure requirements towards the purchase of construction equipment. A part will also be used for general corporate purposes and issue expenses.

Globe Civil Projects IPO: Strengths

• The company has strong project management and execution capabilities. As of the date of filing the red herring prospectus, it has completed 37 projects and has 13 ongoing projects.
• The company's order book as of December 2024, March 2024, and March 2023 stood at ₹778.5 crore, ₹980.8 crore, and ₹937.8 crore, respectively.
• The firm has shown strong and consistent financial performance. Its revenue from operations grew from ₹285.7 crore in FY22 to ₹332.1 crore in FY24, reflecting a CAGR of 7.82%.
• Its promoters and directors, Ved Prakash Khurana, Vipul Khurana and Nipun Khurana, have an average of 19 years of experience in the construction field.

Globe Civil Projects IPO: Risks

• In the fiscal year 2024, FY23, and FY22, the company derived 29.77%, 57.48%, and 54.62%, respectively, of its revenue from the construction project receipts business segment from projects developed by the Central Public Works Department (CPWD), the company's top customer. Inability to win projects from CPWD could affect the company's financial condition.
• Globe Civil Projects' business and profitability depend on the demand for construction services. Any decline in such activity can adversely affect the company's business.
• For 9MFY25, the company submitted bids for 11 projects but secured only one. This reflects a success rate of 9.09%. In FY24, the success rate was 54.55%. The company's revenues depend on securing new contracts and the timing of those awards. Failure to meet pre-qualification criteria, or non-qualification because of technical reasons, may hamper its revenue.