The Indian stock market has been witnessing a strong pipeline of IPOs, reflecting both investor appetite and companies’ need for capital. Among these, Vikran Engineering Ltd. has attracted attention with its ₹772 crore public issue. With a strong order book, government contracts, and steady financial growth, the company has sparked curiosity among retail and institutional investors alike.
But beyond fundamentals, what’s generating buzz is the Grey Market Premium (GMP), a crucial indicator of expected listing gains. Currently, Vikran Engineering’s IPO GMP signals a healthy premium, suggesting optimism in the unlisted market.
In this detailed blog, we’ll cover everything about Vikran Engineering’s IPO—company profile, issue structure, GMP trends, financials, strengths, risks, and whether investors should subscribe.
Company Overview
Incorporated in 2008, Vikran Engineering is an Engineering, Procurement, and Construction (EPC) company with expertise in:
- Power transmission and distribution projects.
- Water infrastructure.
- Railway electrification.
- Metro works.
- Solar energy projects.
The company follows an asset-light business model, outsourcing much of its heavy machinery and equipment, which helps reduce capital burden.
Key Clients
Vikran Engineering’s client base is dominated by government and public sector enterprises, including:
- NTPC Limited
- Power Grid Corporation of India
- State electricity boards
- East Central Railway
Order Book
As of June 2025:
- Completed 45 projects across 14 states (worth ₹1,920 crore).
- Managing 44 ongoing projects in 16 states, with a robust order book of ₹5,120 crore (₹2,442 crore confirmed).
This provides strong visibility into future revenues.
IPO Structure and Details
- Issue Size: ₹772 crore
- Fresh Issue: ₹721 crore
- Offer for Sale: ₹51 crore
- Price Band: ₹92 – ₹97 per share
- Face Value: ₹1 per share
- Lot Size: 148 shares and multiples thereafter
- Allocation:
- QIBs: 50%
- NIIs: 15%
- Retail: 35%
- Subscription Dates: Aug 26 – Aug 29, 2025
- Allotment Date: Sep 1, 2025
- Refunds/Listing: Listing on Sep 3, 2025, on NSE and BSE
Pre-IPO Moves
- Raised ₹232 crore from anchor investors, including marquee names like Ashish Kacholia and Mukul Aggarwal.
- Announced a 5% dividend payout on profits at its AGM, just ahead of IPO—interpreted as a confidence-boosting signal.
Financial Performance
Vikran Engineering has shown consistent revenue and profit growth:
- FY23: Revenue ₹524 crore, PAT ₹42.8 crore
- FY24: Revenue ₹786 crore, PAT ₹75 crore
- FY25: Revenue ₹916 crore, PAT ₹77.8 crore
The company’s CAGR in revenue stands at ~16.5%, with profits steadily rising despite competitive pressures.
Valuation
At the upper price band (₹97), the IPO is priced at a P/E of ~19.7x (FY24 EPS). Compared to industry peers trading at P/Es of 50–60x, Vikran appears reasonably priced, offering room for valuation upside.
Grey Market Premium (GMP) Trends
The Grey Market Premium indicates how much investors are willing to pay over the issue price in unofficial trading before listing.
- Current GMP: ₹17 per share.
- This suggests a potential listing at ₹113–114, ~17–18% above the upper band of ₹97.
- Earlier, GMP touched ₹22–23 but has stabilized at around ₹17.
Interpretation
- A positive GMP indicates strong investor demand.
- While GMP is unofficial and speculative, it reflects sentiment and often predicts listing performance.
Strengths of Vikran Engineering IPO
- Robust Order Book: ₹5,120 crore backlog ensures revenue visibility.
- Diversified Operations: Presence across power, water, metro, solar, and rail sectors reduces risk.
- Government Contracts: Association with reputed clients adds credibility.
- Consistent Growth: Steady rise in revenue and profits over 3 years.
- Attractive Valuation: Priced lower than peers, providing listing upside potential.
- Anchor Investor Backing: Strong support from institutional investors builds trust.
- Dividend Policy: Announcement of 5% profit dividend shows shareholder focus.
Risks & Challenges
- Dependence on Government Projects: Nearly 60% of revenue is tied to government contracts; delays in tendering or payments could hurt cash flow.
- Working Capital Intensity: High receivables may pressure liquidity.
- Execution Risk: EPC projects involve delays, cost overruns, and operational risks.
- Competition: Intense competition in EPC space could impact margins.
- Raw Material Costs: Fluctuations in steel and cement prices may affect profitability.
Investor Sentiment
Market experts are generally positive on the IPO:
- Analysts highlight its attractive valuation and diversified portfolio as key strengths.
- GMP indicates strong retail interest, though not as high as some over-subscribed IPOs.
- Institutional support from anchors adds credibility.
For long-term investors, Vikran Engineering could benefit from India’s massive infrastructure push in power, water, and railways.
Should You Subscribe?
Reasons to Subscribe:
- Strong order book & client base.
- Reasonable valuation compared to peers.
- Steady financial growth.
- Healthy GMP suggesting potential listing gains.
Reasons to Stay Cautious:
- Heavy reliance on government contracts.
- Execution and working capital risks.
- Margins may come under pressure if input costs rise.
Verdict:
For investors looking at both listing gains and long-term growth in infrastructure, Vikran Engineering’s IPO appears to be a solid opportunity. Risk-averse investors, however, should consider the working capital intensity and project execution challenges before committing.
Conclusion
The Vikran Engineering IPO combines a strong project pipeline, financial growth, and reasonable pricing with the excitement of a 17–18% Grey Market Premium. Backed by marquee investors and government-driven infrastructure demand, the company is well-positioned to deliver growth.
While risks remain—especially around government dependence and execution—on balance, Vikran Engineering offers a compelling investment case for both listing pop seekers and long-term investors bullish on India’s infrastructure sector.
Final Take: A subscribe call looks justified, keeping in mind one’s risk appetite.