Vikran Engineering IPO subscribed 2.56x on Day 2, GMP at 12%; Should You Invest? Key details inside

On Day 2 of bidding, Vikran Engineering’s Rs 772 crore IPO was subscribed 2.56 times so far, led by strong demand from NIIs and retail investors. In the grey market, shares are trading at a 12% premium over the issue price of Rs 97. The offer remains open until August 29.

Vikran Engineering GMP Today:

Vikran Engineering’s IPO is attracting strong interest in the grey market, trading at a premium of 12.3% above its issue price of Rs 97. This represents a premium of approximately Rs 12, suggesting a potential listing price of around Rs 109 when the shares begin trading on the exchange. Note: The grey market premium (GMP) indicates investor sentiment but is unofficial and subject to change.

Vikran Engineering Subscription Status:

As of 10:10 am on Day 2, Vikran Engineering’s IPO is overall subscribed 2.56 times, according to stock exchange data. Retail Individual Investors (RIIs) have subscribed 2.52 times the 2.93 crore shares on offer, while Non-Institutional Investors (NIIs) have subscribed 6.10 times the 1.25 crore shares available. Qualified Institutional Buyers (QIBs) have subscribed to 58% of the 1.67 crore shares allocated to them.

Details of Vikran Engineering IPO

Vikran Engineering’s IPO, valued at Rs 772 crore, has a price band ranging from Rs 92 to Rs 97 per equity share. The public subscription will open on August 26 and close on August 29. Investors can bid for a minimum of 148 equity shares, with additional bids in multiples of this amount.

The IPO will follow a book-building process, with up to 50% of the shares reserved for Qualified Institutional Buyers (QIBs), at least 15% allocated to Non-Institutional Investors (NIIs), and a minimum of 35% reserved for retail investors. The offer includes a fresh issuance of shares worth Rs 721 crore and an Offer for Sale (OFS) amounting to Rs 51 crore.

Purpose of the Vikran Engineering IPO

Out of the fresh issue proceeds, Rs 541 crore will be utilized to meet working capital needs, with the remaining amount designated for general corporate purposes.

Vikran Engineering: Company Snapshot

Vikran Engineering is one of India’s fastest-growing engineering, procurement, and construction (EPC) companies, showing stronger revenue growth between FY23 and FY25 compared to its industry peers, as per a CRISIL report.

The company has a diversified project portfolio, with a strong presence in the energy and water infrastructure sectors, along with significant operations in the railway and solar EPC segments.

As of June 30, Vikran Engineering has completed 45 projects across 14 states, with a total executed contract value of Rs 1,920 crore.

Currently, it is undertaking 44 projects across 16 states, with a total order value of Rs 5,120 crore, including an active order book of Rs 2,442 crore.

Key government clients include NTPC, Power Grid Corporation of India, South Bihar Power Distribution, and North Bihar Power Distribution. The company is also engaged in projects for Assam Power Distribution Company and the Danapur division of East Central Railway.

Pantomath Capital Advisors and Systematix Corporate Services are the book-running lead managers for the IPO, while Bigshare Services is the registrar.

Financial Overview

The company reported a 16.5% rise in revenue, increasing from Rs 786 crore in FY24 to Rs 916 crore in FY25. Over the same period, profit after tax grew by 4%, reaching Rs 78 crore. EBITDA for FY25 was recorded at Rs 160.2 crore.

Should You Consider Subscribing?

Both Reliance Securities and Canara Bank Securities recommend investing in the issue. Reliance Securities emphasized Vikran Engineering’s strong execution track record, alignment with the government’s infrastructure initiatives, and an asset-light business model that boosts efficiency and scalability.

Canara Bank highlighted the company’s rapid growth in order execution and experienced promoters but also pointed out potential risks, including stretched working capital cycles and a recent ban on railway electrification projects imposed by the Railways’ vigilance wing, which may impact future order flows.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)