Vikran Engineering, a company specializing in turnkey EPC projects, has concluded its Initial Public Offering (IPO) with robust subscription rates across investor categories. However, despite the strong interest, market indicators suggest a potentially modest debut on the stock exchanges.

IPO Details and Subscription

The Rs 772 crore IPO of Vikran Engineering witnessed an impressive subscription rate of nearly 25 times across all investor categories. The offering was priced at Rs 97 per share and comprised a fresh issue of Rs 721 crore along with an offer for sale worth Rs 51 crore. This pricing structure positions the company with an approximate market capitalization of Rs 2,500 crore.

Company Profile and Financial Performance

Vikran Engineering, backed by notable investors Ashish Kacholia and Mukul Aggarwal, has established itself in key infrastructure sectors. The company's expertise lies in executing turnkey EPC (Engineering, Procurement, and Construction) projects across power transmission, water supply, and railway electrification.

The company has demonstrated strong financial growth:

• Revenue grew at a Compound Annual Growth Rate (CAGR) of 32%, reaching Rs 916.00 crore.
• Net profit increased from Rs 43.00 crore to Rs 78.00 crore.

Current Projects and Order Book

Vikran Engineering boasts a robust project pipeline:

• An unexecuted order book valued at Rs 2,442.00 crore
• Currently executing 44 ongoing projects with a cumulative worth of Rs 5,120.00 crore

Market Expectations and Valuation

Despite the strong subscription numbers, market sentiment suggests a cautious outlook:

• The grey market premium indicates potential listing gains of around 4%, which can be considered modest.
• The IPO was valued at 22 times earnings, compared to the 31-39 times valuation range of listed peers.

Potential Concerns

Investors and analysts have highlighted a few areas of concern:

1. Working capital requirements for the company's operations
2. A regulatory ban imposed by the Railway Board, which could impact future projects and growth

While Vikran Engineering's IPO has garnered significant interest from investors, the market appears to be taking a measured approach to its listing. The company's strong order book and financial growth are balanced against sectoral challenges and regulatory issues, setting the stage for an interesting market debut.

Vikran Engineering Ltd.'s Initial Public Offering (IPO) has concluded with a resounding success, attracting significant investor interest across various categories. The mainboard IPO, which aimed to raise Rs 772 crore, witnessed an impressive overall subscription of 23.59 times, indicating strong market confidence in the company's prospects.

Subscription Details

The IPO received bids for a staggering 138.59 crore shares against the 5.87 crore shares on offer. The breakdown of subscription rates across different investor categories showcases widespread enthusiasm:

IPO Structure and Pricing

The Rs 772 crore IPO was structured as follows:

• Fresh issuance: Rs 721 crore
• Offer-for-sale: Rs 51 crore

The price band for the IPO was set between Rs 92 to Rs 97 per share.

Key Dates

• Share Allotment: Scheduled for September 1
• Expected Listing Date: September 3 on both NSE and BSE

Grey Market Premium

The grey market is showing a premium of Rs 6, suggesting an expected listing price of Rs 103 per share. However, it's important to note that grey market premiums are unofficial and subject to change.

About Vikran Engineering

Vikran Engineering Ltd. is an Engineering, Procurement, and Construction (EPC) company that specializes in:

• Power transmission projects
• Power distribution projects
• Water infrastructure development

The company's focus on critical infrastructure sectors positions it in potentially high-growth areas of the Indian economy.

Investor Takeaway

The strong oversubscription across all investor categories, particularly the high interest from Non-Institutional Investors, suggests robust confidence in Vikran Engineering's business model and growth prospects. However, as with all investments, potential investors should conduct their own research and consider their risk appetite before making investment decisions.

With the allotment process set to begin soon and listing just around the corner, all eyes will be on Vikran Engineering's market debut to see if it matches the enthusiasm seen during the subscription period.