Deepak Builders & Engineers India Limited, a leading integrated engineering and construction company, has recently launched its Initial Public Offering (IPO), which is making waves in the market. The IPO comprises a Book Built Issue amounting to ₹260.04 Crores, with a Fresh Issue of 107 Lakh Shares worth ₹217.21 Crores and an Offer for Sale of 21.1 Lakh Shares totalling to ₹42.83 Crores.

Key Dates

The subscription period for this promising IPO opened on October 21, 2024, and will close on October 23, 2024. Investors can expect the allotment to be finalized on October 24, 2024, with shares listed on the BSE and SME on or around October 28, 2024.

Pricing and Investment Details

The share price band for the Deepak Builders & Engineers IPO is set at ₹192 to ₹203 per equity share, with a minimum lot size of 73 shares. Retail investors are required to make a minimum investment of ₹14,819, while High-Net-Worth Individuals (HNIs) need to invest in 14 lots (totaling 1,022 shares), amounting to ₹2,07,466.

Fedex Securities Private Limited serves as the book-running lead manager, while Kfin Technologies Limited acts as the registrar for the issue, ensuring a smooth and efficient IPO process.

Grey Market Premium

The Grey Market Premium (GMP) for the Deepak Builders & Engineers IPO is reported at ₹42, indicating potential listing gains. However, it's essential to note that trading based on GMP carries risks, as it largely depends on the demand and supply dynamics in an unorganized market.

Live Subscription Status

As of 11:15 AM on October 22, 2024, the Deepak Builders & Engineers India IPO has been subscribed 6.21 times on its second day of the subscription period. Investors can check the live subscription status on the BSE website to stay updated on the demand for this IPO.

Anchor Investors and Funding

In an encouraging sign, Deepak Builders & Engineers India has raised ₹78.01 Crores from anchor investors at a price of ₹203 per share. The company allocated 38,42,939 equity shares to these investors, which reflects confidence in its growth prospects.

IPO Allotment Process

The allotment date for the Deepak Builders & Engineers IPO is set for October 24, 2024. Investors can easily check their allotment status online through the registrar's website. Here’s how you can do it:

Navigate to the IPO allotment status page.

Select Deepak Builders & Engineers India Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to check your allotment status.

Objectives of the IPO

The proceeds from the Fresh Issue will be directed towards:

₹300.00 Million for repayment or prepayment of certain borrowings.

₹1,119.56 Million for funding the company's working capital requirements.

General corporate purposes, ensuring robust growth and sustainability.

Financial Performance

Deepak Builders & Engineers has demonstrated steady financial growth over the past few years:

Revenue for Fiscal 2024, Fiscal 2023, and Fiscal 2022 was ₹5,167.42 Million, ₹4,354.60 Million, and ₹3,649.87 Million, respectively.

EBITDA for the same periods was ₹1,175.39 Million, ₹528.93 Million, and ₹438.71 Million.

Profit after Tax has seen significant growth, reaching ₹604.10 Million in Fiscal 2024.

The company’s pre-issue Earnings Per Share (EPS) is ₹16.84, with a post-issue EPS of ₹12.96. The pre-issue Price-to-Earnings (P/E) ratio is 12.05x, while the post-issue P/E ratio is 15.66x against the industry average of 25.03x. The Return on Capital Employed (ROCE) for FY24 is an impressive 41.72%, while the Return on Equity (RoE) stands at 39.39%. These metrics suggest that the IPO is reasonably priced and presents a viable investment opportunity.

Investment Recommendation

Given the financial performance and the valuation metrics of Deepak Builders & Engineers, we recommend that risk-tolerant investors consider applying for the IPO to potentially benefit from listing gains. However, long-term investors may want to approach with caution.

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