“SME IPO: Chavda Infra Sees Rollercoaster Debut, Listing at 40% Premium Before Hitting Lower Circuit”
Chavda Infra, a small and medium enterprises (SME) company, made a striking debut in the stock market, initially opening at a substantial 40 percent premium to its issue price of Rs 65. However, the company’s shares faced a swift reversal of fortunes, plunging to the 5 percent lower circuit on September 25, in sync with the broader market’s weakness.
The stock commenced trading at Rs 91, briefly reaching Rs 92 before encountering selling pressure. As of 10.58 am, Chavda Infra was trading at Rs 86.45 on the NSE EMERGE platform.
Chavda Infra is an integrated civil construction firm renowned for its diversified range of construction and related services, particularly in Gujarat, with a strong presence in Ahmedabad and Rajkot. The company offers comprehensive construction solutions, encompassing everything from planning and design to construction and post-construction activities, catering to residential, commercial, and institutional projects.
Over the years, Chavda Infra has successfully executed more than 100 projects valued at Rs 670.99 crore. As of May 31, the company had 26 ongoing projects valued at approximately Rs 601.39 crore, comprising four commercial projects, four institutional projects, and 18 residential projects.
In its IPO prospectus, Chavda Infra highlighted its revenue generation across three core business verticals: contracting services, development services, and commercial renting services.
According to the financial data presented in the prospectus, the company has consistently maintained an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) margin of around 15 percent throughout FY21-23. Furthermore, Chavda Infra boasted impressive financial metrics, including a high RoE (Return on Equity) and RoCE (Return on Capital Employed) standing at 49 percent and 44 percent, respectively, in FY23.
