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Vikran Engineering IPO Day 1 Live: Vikran Engineering, an infrastructure EPC firm, will begin its subscription period on August 26 and will close on August 29. Vikran Engineering IPO price band has been established at ₹92-97 per share.

Vikran Engineering IPO comprises a fresh issue of shares estimated at around ₹721 crore and an offer-for-sale section valued at ₹51 crore by the promoter.

The Mumbai-based company plans to use the proceeds from the fresh issue, amounting to ₹541 crore, to fund working capital needs, with the remainder allocated for general corporate uses.

Vikran Engineering is recognized as one of the rapidly expanding Indian Engineering, Procurement & Construction (EPC) firms, delivering comprehensive services from conceptualization and design to supply, installation, testing, and commissioning on a turnkey basis.

Pantomath Capital Advisors and Systematix Corporate Services serve as the lead managers for the book-running process, while Bigshare Services is appointed as the issue's registrar.

(Stay tuned for more updates)

Foreign companies and multinational corporations looking to establish or expand their presence in India often require EPC services.

Multinational Corporations: Global players in industries such as energy, automotive, and chemicals may engage Indian EPC firms for their projects in India.

Private companies across various industries also play a substantial role in the EPC industry.

Industrial Sector: Companies in sectors such as oil and gas, power, petrochemicals, and manufacturing frequently require EPC services for setting up plants and facilities.

Real Estate and Commercial: Real estate developers and commercial establishments often engage EPC contractors for large-scale construction projects.

The company follows an asset light model by executing more orders with relatively lower investment in fixed assets. It rents equipment from third-party lessors across various states to meet project-specific requirements. This approach helps reduce fixed costs and enhances cost and logistics efficiency in project execution. It also enables the management team to concentrate on core business functions rather than managing and maintaining in-house assets.

“We assign a ‘Subscribe (With Caution)’ rating to this IPO given the company’s diversified order book, presence across business verticals, and consistent financial growth. However, negative net cash flows from operating activities in recent fiscals make us cautious from a long-term investment perspective,” said Marwadi Shares and Finance Ltd.

The company’s strategic focus on capitalizing on government initiatives like the Revamped Distribution Sector Scheme and Jal Jeevan Mission, coupled with its asset-light model and pan-India presence, positions it well to benefit from India’s infrastructure boom. At the upper band of ₹97, the issue is valued at a P/E ratio of 32.15x, based on PAT of FY25 EPS of ₹3. We are recommending a “subscribe” rating for this issue," said Arihant Capital Markets.

“The issue is fairly priced at 22X PE and 4X PB as compared to 61X PE and 4X PB average of its listed peers. However, ban on the company by Executive director of Gati Shakti and stretched working capital remains a concern. We recommend SUBSCRIBE the issue for investors with high-risk appetite,” said Canara Bank Securities.

Vikran Engineering IPO subscription status was 15% on day 1. The retail portion was subscribed 20%, and NII portion has been booked 25%, Qualified Institutional Buyers (QIBs) portion is yet to receive bids.

The company has received bids for 89,98,992 shares against 5,87,39,128 shares on offer, at 10:18 IST, according to data on BSE.

The company undertakes its EPC business in an integrated manner. The company has developed resources in-house to deliver a project from conceptualization until completion ensuring overall overview of the project and execution of the project. The company has a team of 12 designers and engineers who have industry knowledge in the business verticals with a total cumulative experience of over 93 years who help the company to offer customised solutions for its turnkey projects.

The company’s clients in the government sector include NTPC, Power Grid Corporation of India, South Bihar Power Distribution Co. Ltd., North Bihar Power Distribution Co. Ltd., Transmission Corporation of Telangana Limited, Madhya Pradesh Power Transmission Company, Madhya Pradesh Madhya Kshetra Vidyut Vitran Company, District Water and Sanitation Mission (PHED) and State Water and Sanitation Mission (SWSM). 

Further the company is working on certain projects for Assam Power Distribution Company and the Danapur division of the Eastern Central Railway. The company’s projects cover the following infrastructure business verticals.

They have a strong order book of ₹2000+ Cr (2x FY25 Revenues) which gives them growth visibility for the next 2 years. Given the government’s focus on recycling the water and their push on power infrastructure, the company is well positioned to capitalize on future tenders.

The company has witnessed business growth under the leadership and guidance of one of the Promoters, Chairman and Managing Director, Rakesh Ashok Markhedkar, who has 34 years of experience, largely in EPC sector. Avinash Ashok Markhedkar has over 33 years, Nakul Markhedkar, the company’s Whole-Time Director has 9+ years of experience. 

The company’s senior management team is able to leverage their collective experience and knowledge in the EPC industry, to execute business strategies for the company’s growth. The company’s KMP and SMP team comprises of professionally qualified people having experience in various business functions.

“With a consistent track record of executing large-scale projects along with asset-light model for marquee government and public sector clients and PAN India presence, Vikran Engineering Limited is well-positioned to capitalize on opportunities in the high-growth infrastructure sector. Considering its scalability, financial strength, and sectoral tailwinds, we assign a ‘Subscribe for Long term’ rating for the IPO,” said brokerage house, Anand Rathi Research.

The issue has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Tentatively, Vikran Engineering IPO basis of allotment of shares will be finalised on Monday, September 1 and the company will initiate refunds on Tuesday, September 2 while the shares will be credited to the demat account of allottees on the same day following refund. Vikran Engineering share price is likely to be listed on BSE and NSE on Wednesday, September 3.

Vikran Engineering announced on Monday that it has raised ₹231.6 crore from anchor investors just a day before its public share sale opens for subscriptions. 

The anchor portion saw involvement from a range of investors, including Bank of India Mutual Fund (MF), ITI MF, Samco MF, SBI General Insurance, IMAP India, Bengal Finance and Investment, VPK Global, and Societe Generale, among others, as detailed in a circular posted on the BSE website. 

According to the circular, Vikran Engineering has allocated more than 2.38 crore equity shares to 14 entities at a price of ₹97 each, resulting in a total transaction value of ₹231.60 crore.

Vikran Engineering IPO GMP today or grey market premium is +21. This indicates Vikran Engineering share price were trading at a premium of ₹21 in the grey market on Tuesday, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Vikran Engineering share price was indicated at ₹118 apiece, which is 21.65% higher than the IPO price of ₹97.

Through the analysis of the past nine sessions of grey market activities, the current IPO GMP is showing an upward trend and is anticipated to have a robust listing. The minimum GMP recorded is ₹0.00, while the maximum GMP stands at ₹21.00, as per the experts at investorgain.com.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.

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