The Deepak Builders & Engineers IPO is generating significant interest as it prepares to open for subscription on October 21, 2024. With a Book Built Issue amounting to ₹260.04 Crores, the IPO includes a Fresh Issue of 107 Lakh Shares worth ₹217.21 Crores and an Offer for Sale of 21.1 Lakh Shares totaling ₹42.83 Crores. The subscription period will close on October 23, 2024, with the allotment expected to be finalized on October 24, 2024. Following this, shares will be listed on the BSE and SME, with a tentative listing date set for October 28, 2024.

Investment Details

The share price band for the Deepak Builders & Engineers IPO is established between ₹192 to ₹203 per equity share, with a minimum lot size of 73 shares. For retail investors, the minimum investment is ₹14,819, while High-Net-Worth Individuals (HNIs) must invest in 14 lots (1,022 shares), amounting to ₹2,07,466.

Fedex Securities Private Limited acts as the book-running lead manager for this IPO, while Kfin Technologies Limited is responsible for the issue's registrar functions.

Grey Market Premium and Allotment Status

The Grey Market Premium (GMP) for the Deepak Builders & Engineers IPO is projected to range between ₹57 to ₹42, reflecting market expectations based on the company’s financial performance. It's essential to note that trading based on GMP does not provide a reliable price discovery before the shares are listed on the exchange. The GMP serves educational and informational purposes only.

For investors eager to check their allotment status, the process is straightforward:

Navigate to the IPO allotment status page.

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

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

Submit the details to view your allotment status.

Objectives of the Deepak Builders & Engineers IPO

The proceeds from the Fresh Issue will be utilized for several key purposes:

₹300.00 Million for the repayment/prepayment of certain borrowings.

₹1,119.56 Million to fund the company's working capital requirements.

General corporate purposes.

Company Overview and Financial Performance

Deepak Builders & Engineers India is an integrated engineering and construction firm, proficient in executing a variety of construction projects, including administrative buildings, hospitals, industrial structures, and more. Established by Deepak Kumar Singal in April 1990, the company has completed over 60 construction and infrastructure projects in its three-decade journey.

Financially, the company has shown impressive growth:

Revenue for the fiscal years 2024, 2023, and 2022 were ₹5,167.42 Million, ₹4,354.60 Million, and ₹3,649.87 Million, respectively.

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

Profit After Tax (PAT) increased significantly to ₹604.10 Million for FY24, compared to ₹213.95 Million and ₹176.64 Million for FY23 and FY22, respectively.

For the Deepak Builders & Engineers IPO, the 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 stands at 12.05x, while the post-issue ratio is 15.66x, against an industry average of 25.03x. The company boasts a Return on Capital Employed (ROCE) of 41.72% and a Return on Equity (RoE) of 39.39% for FY24, suggesting a healthy valuation.

Despite the promising financial metrics, the Grey Market Premium indicates potential listing gains of only 15% - 20%. Given the overall financial landscape and valuation, it may be prudent for investors to avoid the Deepak Builders & Engineers IPO for both listing gains and long-term investments.

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