Garden Reach Shipbuilders & Engineers Limited IPO
Garden Reach Shipbuilders & Engineers Limited IPO
(i) Garden Reach Shipbuilders & Engineers Limited was incorporated at Calcutta on February 26, 1934. The Company is a shipbuilding company in India under the administrative control of the MoD and primarily adhere to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. In addition to the ship and warship building capabilities, they are engaged in engineering and engine production activities. As a part of the engineering division, they manufacture deck machinery items, pre-fabricated portable steel bridges, and marine pumps. Their shipbuilding division contributes a significant majority of their revenue from operations. They have derived 81.23%,75.10%, 79.09% and 83.33% of their gross revenue from operations on September 30, 2017, Fiscals 2017, 2016 and 2015 respectively from their shipbuilding division.
(ii) Over the years, the Company has established capabilities for in-house design and shipbuilding and has made considerable contributions to the indigenous warship construction program of the country. The shipbuilding product line spans from technologically sophisticated Frigates and Corvettes to Fast Patrol Vessels.
(iii) In the last five (5) decades, they have built and delivered ships ranging from small to large and advanced vessels including frigates, anti-submarine warfare corvettes, missile corvettes, landing ship tanks, landing craft utilities, survey vessels, fleet replenishment tankers, fast patrol vessels, offshore patrol vessels, inshore patrol vessels, WJ-FAC, hover crafts and fast interceptor boats to the Indian Navy, Indian Coast Guard, MHA and Governments of other countries. They have built and supplied more than seven hundred fifty (750) vessels to carry men and materials as well as for the surveillance of the coastline.
(iv) Presently, they have three (3) separate facilities for shipbuilding, all of which are located in close vicinity of each other at Kolkata, India. They build their ships at the Main Works Unit and the Rajabagan Dockyard. The third facility, the FOJ Unit is primarily used for fitting out and repair of ships. They acquired the Rajabagan Dockyard from Central Inland Water Transport Corporation Limited in the year 2006. The DEP Unit in Ranchi is engaged in the testing and overhauling of marine propulsion engines and assembly of semi-knocked down units of diesel engines.The Engineering segment is engaged in the manufacturing and fabrication of portable steel bridges, deck the machinery of ships and marine pumps.
(v) Interaction with management
Objects of the Garden Reach Shipbuilders & Engineers Limited IPO:
Garden Reach Shipbuilders & Engineers Limited IPO Details:
| Open Date: | Sep 24 2018 |
| Close Date: | Oct 01 2018 |
| Total Shares: | 29,210,760 |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Book Built Issue IPO |
| Issue Size: | 339.39 Cr. |
| Lot Size: | 120 Shares |
| Issue Price: | ₹ 115-118 Per Equity Share |
| Retail Discount: | 5 |
| Listing At: | NSE,BSE |
| Listing Date: | Oct 09 2018 |
Promoters And Management:
Company Business:
Capital Structure:
| (i) Authorized Share Capital 125,000,000 shares at FV@10) | 125 Cr |
| (ii) Issued, Subscribed,& Paid-up Share Capital Before Issue (114,552,000 Shares at FV@10) | 114.552 Cr |
| (iii) Present Issue OFS to public ( 29,210,760 Shares at FV@10) | 25.5% of Paid up capital |
| (iv) Present Issue OFS to Employees ( 572,760 Shares at FV@10) | .5% of Paid up capital |
| (v) Reservation for QIB (14319000 Shares at FV@10) | 50% |
| (vi) Reservation for HNI (4295700 hares at FV@10) | 15% |
| (vii) Reservation for Retail (10023300 Shares at FV@10) | 35% |
| (viii) Paid Up Share Capital after the issue | 114.552 Cr |
Financials of Garden Reach Shipbuilders & Engineers Limited IPO:
| 1. Assets and Liabilities Key Parameters | ||||||
| Year | Asset(M) | Liabilities(M) | Net Worth(M) | Book Value | Liability/Equity | RONW |
| FY15 | 40,009.75 | 29,941.51 | 10,068.24 | 81 | 2.97 | 5% |
| FY16 | 44,538.91 | 33,172.36 | 11,366.55 | 92 | 2.92 | 14% |
| FY17 | 45,666.35 | 34,834.91 | 10,831.44 | 87 | 3.22 | 1% |
| FY18 | 42,602.33 | 32,442.96 | 10,159.37 | 89 | 3.19 | 9% |
| 2. Profit n Loss Key Parameters | ||||||
| Year | Revenue(M) | PAT(M) | EBITDA Margins | Profit Margins | Outstanding Shares( M) | EPS |
| FY15 | 16,294.43 | 458.04 | 7.5% | 3% | 123.84 | 4 |
| FY16 | 18,560.56 | 1,596.41 | 15.0% | 9% | 123.84 | 13 |
| FY17 | 11,463.12 | 116.9 | 5.0% | 1% | 123.84 | 1 |
| FY18 | 15,257.50 | 943.56 | 19.0% | 6% | 114.552 | 8 |
| 3. Cash Flow Statement(all figures in Million) | ||||
| Particulars | FY18 | FY17 | FY16 | FY15 |
| (i) Net Cash Generated from Operation | -740.15 | -1,912.17 | 4,230.24 | 1,074.49 |
| (ii) Net Cash Generated from Investment | 2,673.71 | 2,268.17 | -4,832.47 | 100.65 |
| (iii) Net Cash Generated from Financing Activity | -1,933.15 | -499.99 | -295.8 | -184.37 |
| (iv) Total[ (i)+(ii)+(iii) ] | 0.41 | -143.99 | -898.03 | 990.77 |
| (v) Cash and Cash Equivalent (Opening) | 118.49 | 262.48 | 1,160.51 | 169.55 |
| (vi) Cash and Cash Equivalent (Closing) | 118.90 | 118.49 | 262.48 | 1,160.32 |
Recommendation on Garden Reach Shipbuilders & Engineers Limited IPO:
Lead Manager of Garden Reach Shipbuilders & Engineers Limited IPO:
Registrar of Garden Reach Shipbuilders & Engineers Limited IPO:
Company Address:
Bid Details of Garden Reach Shipbuilders & Engineers Limited IPO as on
01-Oct-2018 17:00:00 IST
Discussion on Garden Reach Shipbuilders & Engineers Limited IPO:
29 Comments
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Is ipo withdrawn because my money returned to my account
I was applied in hni categories which was subscribe only 35%
You must not have received the IPO Allotment. You should feel lucky that you didnt get the IPO in this market situation.
Yes because I am feeling relaxed now. Thanks to God for 0 allottement
See the listing price. I told u that you would be lucky.
When it will list. Dear admin pls reply
Tuesday or Wednesday.
Dear admin
Can you suggest approximate listing price ..
Should not apply any more…
State Bank of India is not allowing with drawl of this IPO despite the date been extended. Anyone has solution?
Call the Call Center and resolve the issue.
*Garden Reach IPO extended*
Initial Price band 115-118, now revised to 114-118
Date extended till 01-Oct-2018, Monday
Very poor response to the IPO.
Likely to be withdrawn.
Date extended
Dear Admin,
Apply kare k nahi??
As per price band with discount, can expect for listing gain.
Avoid.
Garden Reach IPO
Defence contractor. Past performance of defence contractors are not good though thousands of crore order book i. e. Cochin Shipyard, BDL, HAL. I am avoiding this IPO.
How Revenue is recognised for Work in Progress Vessels?
(i) The Company generally accept orders for construction of vessels to be delivered up to twenty-three (23) months to sixty-six (66) months from the date of the order. So the question here is how Revenue is recognized for work-in-progress vessels. Let us see.
a) Cost Plus Contracts:
“At cost incurred plus profits accrued up to the reporting date as per Contract / Letter of Intent.”
b) Fixed Price Contracts:
How profit is reliably measured:
“At costs incurred up to the reporting date plus profits recognized under percentage completion method in the proportion, the actual costs incurred bear to the estimated total cost to completion as on that date”.
How the loss is anticipated:
“When it is probable that total contract costs will exceed the total contract revenue, the expected loss is fully recognized as an expense immediately, irrespective of physical progress achieved on the reporting date.”
(ii) The aggregate order book as on July 31, 2018, was ₹203,136.10 million, comprising gross order value in the shipbuilding segment, engineering segment and the engine segment of ₹200,294.20 million, ₹851.70 million and ₹1,990.20 million, respectively.
Listing gain expect kar skte he isme ? Then i can apply
Just wait for the Grey Market Activity to star. However, as an IPO is priced at a good valuation so listing gains will definitely be there.
The Revenue and Profit have shown degrowth in last 5 years. The Revenue which was close to 1600 Cr in FY13 has reduced to 1525 Cr in FY18. The Profit margins have also gone down from 8% in FY13 to 6% in FY18. So overall performance is not good. The recent listing of Cochin Shipyard IPO which was also a govt entity in the business of shipbuilding is available below issue price. Hence nothing much to entice in the business.
As of 31st July 2018, the company has a total debt of 500 Cr. The total equity is 1015.9 Cr.
So D/E is .49.( Quite Manageable).
The Company’s clients are Indian Navy and Coast Guard. The shipbuilding division contributes around 80% of the business.
The company has a strong order book of ₹20313 Cr as on July 31, 2018, comprising gross order value in the shipbuilding segment, engineering segment and the engine segment of ₹20029 Cr, ₹85 Cr, and ₹1,99 Cr, respectively.
The company has three business units namely Main Works Unit, FOJ Unit, and DEP unit.
(i) Main Works Unit– This unit allows the company to use modular construction when building warships, which enable them to reduce the shipbuilding period, improve quality through the implementation of integrated construction technology, and to construct ships in line with the global practices in the shipbuilding industry. The facilities allow them to produce eight (8) large ships and twelve (12) medium/ small ships concurrently.[ Shipbuilding segment]
(ii) FOJ Unit– Main Works Unit is supported by the FOJ Unit, which is dedicated to fitting out and repair of ships.[Engineering segment ]
(iii) DEP Unit – It is a state-of-the-art diesel engine assembly shop that carries out overhaul and assembly of engines in a dust-and-moisture-proof environment[ Engine Segment]
EPS Story of the Garden Reach based on FY18 Financials
(i) PAT= 94.3 Cr
(ii) No. of Outstanding Shares= 11.4552 Cr
(iii) EPS= 8.23
(iv) P/E= 14.337
Conclusion- The Pricing has been done at reasonable valuations.
It is a pure Offer for Sale of 29,210,760 Equity Shares by the Govt of India at the face value ₹10 each. The Issue is priced at 115-118 with a retail discount of Rs.5 per Share.
What will be growth in 1 year?
The growth of the company in the last 5 years is negative. So the prediction of the future is difficult.