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

Vikran Engineering IPO: A Hot Ticket on Day 2?

Vikran Engineering's Rs 772 crore IPO is making waves, with Day 2 seeing a 2.56 times oversubscription. This strong interest, fueled by robust demand from both retail and Non-Institutional Investors (NIIs), has the grey market buzzing with shares trading at a 12% premium above the issue price of Rs 97.

A Closer Look at the Numbers:

• Overall Subscription: 2.56 times
• Retail Individual Investors (RIIs): 2.52 times subscribed
• Non-Institutional Investors (NIIs): 6.10 times subscribed
• Qualified Institutional Buyers (QIBs): 58% subscribed

This translates to a potential listing price around Rs 109, based on the current grey market premium (GMP). Remember, the GMP is unofficial and subject to change.

IPO Details:

• Price Band: Rs 92 - Rs 97 per share
• Offer Open: August 26 - August 29
• Minimum Bid: 148 shares
• Fresh Issue: Rs 721 crore (Rs 541 crore for working capital, remainder for general corporate purposes)
• Offer for Sale (OFS): Rs 51 crore

Vikran Engineering: Company Snapshot

Vikran Engineering is a rapidly growing EPC (Engineering, Procurement, and Construction) company, boasting stronger revenue growth than its industry peers (as per a CRISIL report). The company’s success is built on:

• Diversified Portfolio: Energy, water infrastructure, railway, and solar EPC segments.
• Impressive Track Record: 45 completed projects across 14 states (total executed contract value: Rs 1,920 crore) and 44 ongoing projects in 16 states (total order value: Rs 5,120 crore, including an active order book of Rs 2,442 crore).
• Strong Client Base: Key government clients include NTPC, Power Grid Corporation of India, and various state power distribution companies.
• Financial Strength: FY25 saw a 16.5% revenue increase (Rs 916 crore) and a 4% rise in profit after tax (Rs 78 crore).

Should You Invest?

Reliance Securities and Canara Bank Securities both recommend this IPO, citing Vikran Engineering's strong execution, alignment with government infrastructure initiatives, and efficient asset-light business model. However, Canara Bank also notes potential risks including stretched working capital cycles and a recent railway project ban. Remember to conduct your own thorough research before making any investment decisions.

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