Vikran Engineering IPO Analysis: Should You Apply or Avoid?
Vikran Engineering Limited, an EPC contractor across power T&D, water infra and railway electrification, is coming to the market with a ₹772 crore IPO (Fresh: ₹721 cr; OFS: ₹51 cr) at ₹92–97 per share, opening August 26, 2025. Growth, order-book visibility and improving leverage are clear positives; tender dependence, working-capital intensity and execution risks temper the story. Here’s the full breakdown to help you decide.
What the Company Does
Vikran Engineering is a turnkey EPC player delivering design–supply–installation–testing–commissioning across:
- Power transmission & distribution
- Water infrastructure (pumping stations, pipelines)
- Railway electrification
Operating since 2014 (incorporated 2008), Vikran executes projects for state utilities, PSUs and private clients across 22 Indian states. An asset‑light model—with equipment largely rented—keeps fixed costs lean and boosts project flexibility.
Also Read :- Mangal Electrical Industries Ltd IPO Analysis
Track Record & Valuation
Growth: Revenue rose from ₹479.6 cr (FY22) to ₹922.4 cr (FY25) (~24% CAGR).
Profitability: EBITDA margin improved from 15.2% (FY23) to 17.5% (FY25); PAT margin peaked at 9.46% (FY24) and normalized to 8.44% (FY25).
Returns: ROE 16.63% (FY25) (vs 25.69% FY24), ROCE 23.34%.
Leverage: Debt/Equity improved from 1.25x (FY23) to 0.58x (FY25); current ratio 1.36x.
Valuation: At ₹97, implied P/E ≈ 22.3x (FY25)—reasonable for a mid-cap EPC with double-digit margins and a growing order book.
Vikran Engineering IPO Details
| Particulars | Details |
|---|---|
| Issue Size | ₹772 crore |
| Fresh Issue | ₹721 crore |
| Offer for Sale (OFS) | ₹51 crore (promoter) |
| Price Band | ₹92–97 |
| Face Value | ₹1 |
| Lot Size | 148 shares |
| Minimum Investment | ₹14,356 |
| Issue Opens/Closes | Aug 26–Aug 28, 2025 |
| Use of Proceeds (Fresh) | Working capital (~₹625.5 cr), general corporate |
| Listing | BSE & NSE |
Key Ratios and Valuation Metrics
| Particulars | FY2023 | FY2024 | FY2025 | CAGR (FY23–FY25) |
|---|---|---|---|---|
| Total Income | 529.18 | 791.44 | 922.36 | ~32% |
| EBITDA | 79.71 | 133.30 | 160.24 | ~41% |
| Profit After Tax | 42.84 | 74.83 | 77.82 | ~34% |
| Net Worth | 131.14 | 291.28 | 467.87 | ~91% |
| Total Assets | 712.47 | 959.79 | 1,354.68 | – |
| Total Borrowings | 154.92 | 183.39 | 272.94 | – |
Key Observations:
- Revenue grew from ₹529.18 Cr in FY2023 to ₹922.36 Cr in FY2025, a CAGR of ~32%.
- PAT nearly doubled from ₹42.84 Cr in FY2023 to ₹77.82 Cr in FY2025.
- EBITDA margins improved steadily to 17.50% in FY2025.
- Net worth rose sharply to ₹467.87 Cr in FY2025, showcasing strong equity base expansion.
Key Ratios
| KPI | FY2025 | Commentary |
|---|---|---|
| ROE | 16.63% | Healthy return, though moderated from FY2024 highs |
| ROCE | 23.34% | Indicates efficient capital use |
| PAT Margin | 8.44% | Stable despite sectoral challenges |
| EBITDA Margin | 17.50% | Strong operational efficiency |
| Debt-to-Equity | 0.58 | Comfortable leverage position |
| Price-to-Book (P/B) | 3.81 | In line with EPC sector valuations |
| Market Cap | ₹2,501.74 Cr | At IPO upper price band |
Valuation Insight:
At the upper price band of ₹97, Vikran Engineering trades at a P/E of ~22.3x (FY25 earnings), appearing reasonable compared to peers given its order book, growth momentum, and sector tailwinds.
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The Good (Strengths)
- Diversified order mix: Power (~47%), Water (~51%), Rail/Infra (~2%) reduces single-vertical risk.
- Pan-India presence: Operations in 22 states de-risk geography.
- Order-book visibility: ~₹2,442 cr book (Aug 2024) with ~65% escalation clauses supports margins and cash flow planning.
- Execution pedigree: 45 projects across 14 states with executed value of ₹1,919.9 cr showcases delivery.
- Asset-light model: Rented equipment keeps fixed costs lower; supports ROCE.
- Deleveraging trend: Stronger balance sheet improves resilience and bid capacity.
The Bad (Risks)
- Tender dependence: Competitive bidding can pressure margins and win rates.
- Working-capital heavy: Debtor days near ~200 (improved from ~260) still tie up cash.
- Customer concentration: High exposure to government/PSU counterparties; payment delays can ripple through cash flows.
- Execution & regulatory risks: Clearances, scope changes, and input inflation (steel/cement) can impact profitability.
- Cyclicality: Infra spending and policy continuity drive the pipeline.
Use of Proceeds
- Working Capital: ~₹625.5 cr to fund ongoing/new projects.
- General Corporate: Remainder for growth initiatives and contingencies.
Emphasis on WC underscores the growth pipeline—and the model’s cash needs.
Peer Context (Qualitative)
Within listed EPC/power-infra peers, ~22x P/E sits in a mid-range band—below premium multi-vertical leaders but above low-margin micro EPCs. Vikran’s 17.5% EBITDA and >8% PAT margin are solid for the space; sustainability hinges on bid discipline, execution speed, and cash conversion.
Verdict: Should You Apply?
Long-term investors: Cautious Positive.
- What we like: Improving margins, healthy ROCE, broad order book, lower leverage, and exposure to power/water capex cycles.
- What to watch: WC intensity, tender pricing, and collection efficiency.
Listing gains seekers: Moderate.
- Valuation is sensible, but near-term upside depends on subscription quality and secondary market tone for EPC names.
Bottom line: SUBSCRIBE (Long-Term) if you can stomach working-capital swings and execution variability typical of EPC, and you want leveraged exposure to India’s infrastructure push.
FAQs
1) What are the Vikran Engineering IPO dates and price band?
Opens Aug 26, 2025, closes Aug 28, 2025; price band ₹92–97 per share.
2) How is the issue structured?
₹772 cr total: ₹721 cr Fresh Issue and ₹51 cr OFS by promoter.
3) What will the company use the funds for?
Primarily working capital (~₹625.5 cr) and general corporate purposes.
4) Is the valuation attractive?
At ₹97, implied P/E ≈ 22.3x (FY25)—reasonable versus mid-cap EPC peers given double‑digit margins and improving leverage.
5) What are the key risks to track post‑listing?
Post-listing, key risks include tender dependence, high working capital needs, execution delays, cost pressures, and reliance on government spending. Monitoring order flow, cash cycles, and margins will be crucial.
Disclaimer: This article is for information only and not investment advice. Please read the official IPO documents and consult your financial advisor before investing. Investing in markets involves risks.
