The Vikran Engineering IPO is now open for subscription, with the offering valued at Rs 772 crore. This comprises a new issue of Rs 721 crore and an offer for sale worth Rs 51 crore. The IPO subscription will close on August 29. The shares are set to list on both BSE and NSE, with the listing date expected to be September 3 and allotment scheduled for September 1.
The recent Grey market premium (GMP) stands at approximately 21 percent above the IPO price, indicating strong investor interest ahead of the listing.
Strong Pre-IPO Support
Before the public launch, Vikran Engineering IPO garnered Rs 232 crore from anchor investors, including prominent Qualified Institutional Buyers (QIBs). Key backers are The Wealth Company (via India Inflection Opportunity Fund), along with well-known market figures such as Ashish Kacholia and Mukul Aggarwal, who participated in the pre-IPO placement round.
Price Band and Valuation
The shares are priced up to Rs 97 each, which places the company’s valuation at roughly 22 times its projected FY25 earnings and 4 times its book value. Analysts regard this pricing as reasonable and attractive, especially compared to many listed competitors.
Company Profile
Founded in 2008 and based in Thane, Vikran Engineering delivers a broad spectrum of EPC (engineering, procurement, and construction) services. Its portfolio spans power transmission, water infrastructure, railway electrification, metro infrastructure, and renewable energy projects. The company’s Pan India presence is marked by operations in 22 states, managing over 190 project sites.
Operating on an asset-light model, Vikran Engineering IPO emphasizes leasing equipment rather than owning it outright. This asset-light model enables greater flexibility and scalability while reducing costs, reinforcing the company’s robust execution capabilities across various infrastructure projects.
Financial Performance
The company has shown solid financial growth, with revenue rising from Rs 524 crore in FY23 to Rs 916 crore in FY25, reflecting a strong CAGR of around 32 percent. Net profit has also improved significantly, climbing from Rs 43 crore to Rs 78 crore over the same period. For FY25, revenue reached Rs 1,354.7 crore, with net profit reported at Rs 77.8 crore. EBITDA stood at Rs 160.2 crore, supported by operating margins near 12 percent.
Should You Invest? An IPO Review
The Vikran Engineering IPO holds a positive investment rationale, supported by recommendations from Reliance Securities and Canara Bank Securities. These firms highlight the company’s technical capabilities and strong execution capabilities in EPC and infrastructure projects. Additionally, government initiatives provide a favorable environment, bolstered by the experienced promoters and management team.
However, challenges exist. Canara Bank Securities flags stretched working capital cycles and a recent ban on railway electrification orders by the Railways’ vigilance wing, which could affect the company’s order book and future business prospects.
Use of Funds
The majority of IPO proceeds (Rs 541 crore) will be allocated toward working capital needs, with the rest earmarked for general corporate purposes.
In summary, Vikran Engineering IPO stands out with its solid financial growth, strategic asset-light model, and broad EPC capabilities across power transmission, water infrastructure, and railway electrification. Its Pan India presence and strong order book make it an attractive candidate for investors. While the IPO pricing is reasonable relative to peers, potential risks in working capital management and order book uncertainties should be carefully considered.
