Deepak Builders & Engineers India is an integrated engineering and construction company that specializes in executing various large-scale projects, including administrative and institutional buildings, hospitals, medical colleges, industrial complexes, and sports facilities. The company plays a significant role in both the government and private sector construction markets.

The Deepak Builders & Engineers IPO is a book-built issue aiming to raise ₹260.04 Crores through a fresh issue of 107 Lakh Shares worth ₹217.21 Crores, along with an offer for sale of 21.1 Lakh Shares totaling ₹42.83 Crores. The subscription period runs from October 21, 2024, to October 23, 2024, with the allotment expected to be finalized on October 24, 2024. Shares are set to be listed on both the BSE and SME platforms, with a tentative listing date of October 28, 2024.

The share price band for the IPO is set at ₹192 to ₹203 per equity share, with a minimum lot size of 73 shares. This equates to a minimum investment of ₹14,819 for retail investors, while High-Net-Worth Individuals (HNIs) must invest at least ₹2,07,466 for 14 lots (1,022 shares).

Fedex Securities Private Limited serves as the book-running lead manager, and Kfin Technologies Limited is the registrar for the issue.

Financial Overview:

As of October 23, 2024, the Grey Market Premium (GMP) for Deepak Builders & Engineers is expected to be ₹42, suggesting strong demand based on the company’s financial performance. The live subscription status as of 5:55 PM on October 23 indicates an impressive subscription rate of 41.54 times, reflecting robust investor interest.

Objectives of the IPO:

Proceeds from the fresh issue will be allocated to:

1. Repayment/prepayment of certain borrowings, totaling ₹300.00 Million.
2. Funding working capital requirements of ₹1,119.56 Million.
3. General corporate purposes.

Company Performance:

Founded in April 1990 by Deepak Kumar Singal, the company has completed over 60 construction and infrastructure projects, including nine EPC projects.

Financial performance highlights include:

• Revenue for Fiscal 2024: ₹5,167.42 Million
• EBITDA for Fiscal 2024: ₹1,175.39 Million
• Profit after Tax for Fiscal 2024: ₹604.10 Million

These figures indicate steady growth, with the company offering shares at a pre-issue EPS of ₹16.84 and a post-issue EPS of ₹12.96. The pre-issue P/E ratio is 12.05x, and the post-issue P/E ratio is 15.66x, compared to an industry average of 25.03x. The ROCE for FY24 stands at 41.72%, and the RoE is 39.39%, suggesting that the IPO is fairly priced.

Investment Recommendation:

The Grey Market Premium indicates potential listing gains of 20%, making this IPO attractive to risky investors looking for short-term gains. However, long-term investors may want to exercise caution and consider avoiding this IPO for investment purposes.

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This article provides essential insights into the Deepak Builders & Engineers IPO, helping investors make informed decisions regarding their investments.