Mumbai, August 26, 2025 – The Indian stock market is buzzing with excitement as Vikran Engineering Limited, a fast-growing Engineering, Procurement, and Construction (EPC) company, gears up for its Initial Public Offering (IPO). Set to open for subscription on August 26, 2025, and close on August 29, 2025, the ₹772 crore IPO is drawing attention from investors eager to tap into India’s booming infrastructure sector. With a robust financial track record and ambitious growth plans, Vikran Engineering is positioning itself as a compelling opportunity—but is it a must-have for your portfolio? Let’s dive into the details and see if this IPO is worth your bid.
The IPO Breakdown: What’s on Offer?
Vikran Engineering’s IPO comprises a fresh issue of 7.43 crore equity shares, raising ₹721 crore, and an offer for sale (OFS) of 0.53 crore shares worth ₹51 crore. The price band is set at ₹92–₹97 per share, with a lot size of 148 shares, making the minimum investment for retail investors ₹13,616. The company plans to use the fresh issue proceeds primarily for working capital requirements (₹541 crore), with the remainder allocated for general corporate purposes. Shares are slated to list on the BSE and NSE on September 3, 2025, with allotment expected by September 1.
Adding to the hype, the grey market premium (GMP) as of August 26, 2025, stands at ₹22 per share, a 22.68% premium over the upper price band of ₹97, signaling strong investor enthusiasm. But does the company’s financial performance and growth outlook justify the buzz?
Financial Muscle: A Snapshot of Vikran’s Performance
| Financial Metric | FY25 (Mar 31, 2025) | FY24 (Mar 31, 2024) | FY23 (Mar 31, 2023) |
|---|---|---|---|
| Total Income | 922.36 | 791.44 | 529.18 |
| Net Sales | 915.84 | 785.95 | 524.31 |
| Total Expenditure | 651.70 | 651.70 | 444.28 |
| Operating Profit | 134.24 | 134.24 | 80.03 |
| EBITDA | 160.24 | 133.30 | 79.71 |
| EBITDA Margin (%) | 17.50% | 16.92% | 15.20% |
| Profit Before Tax | 102.75 | 102.75 | 53.98 |
| Profit After Tax (PAT) | 77.82 | 74.83 | 42.84 |
| PAT Margin (%) | 8.44% | 9.46% | 8.10% |
| Adjusted EPS (₹) | 4.35 | 4.44 | 2.94 |
| Total Assets | 1,354.68 | 959.79 | 712.47 |
| Net Worth | 467.87 | 291.28 | 131.14 |
| Reserves and Surplus | 449.52 | 290.95 | 130.85 |
| Total Borrowings | 272.94 | 183.39 | 154.92 |
| Debt-to-Equity Ratio | 0.58 | 0.63 | 1.18 |
| Return on Equity (ROE) | 16.63%* | 25.69% | 32.66% |
| Return on Capital Employed (ROCE) | 23.34%* | 30.43% | 28.04% |
| Price-to-Book Value (P/BV) | 3.81 (pre-IPO)** | – | – |
Note: The ROE and ROCE figures for FY25 cited as 35.43% and 35.67% in one source appear inconsistent with other sources, which report 16.63% and 23.34%, respectively. The lower figures are used here as they align with multiple sources and are more conservative. The P/BV of 3.81 is based on the pre-IPO Net Asset Value (NAV) of ₹25.49 as of March 31, 2025, and the IPO price band of ₹92–₹97.
Vikran Engineering has showcased impressive financial growth, making it one of the fastest-growing EPC players in India. According to its financials, the company’s revenue surged by 17% from ₹791.44 crore in FY24 to ₹922.36 crore in FY25, driven by its diversified portfolio in power transmission, water infrastructure, railways, and solar EPC projects. Profit after tax (PAT) grew to ₹77.82 crore in FY25, reflecting a solid 4% increase from ₹74.83 crore in FY24. The company’s EBITDA margin stands at a healthy 17.50%, while its profit margin of 8.44% underscores stable profitability.
Vikran’s balance sheet tells a story of disciplined expansion. Total assets climbed to ₹1,354.68 crore in FY25 from ₹959.79 crore in FY24, and net worth more than doubled over two years, bolstered by rising reserves. Key return metrics are equally compelling: a Return on Equity (ROE) of 16.63% and Return on Capital Employed (ROCE) of 23.34% highlight efficient capital utilization. The debt-to-equity ratio of 0.58 suggests balanced leverage, though borrowings have increased to fuel growth initiatives.
With an order book of ₹24,424.39 crore as of June 30, 2025, and 44 ongoing projects across 16 states valued at ₹51,202.07 crore, Vikran boasts strong revenue visibility for the next 2–3 years. Its client list, including heavyweights like NTPC, Power Grid, and state water and power distribution entities, adds credibility and ensures steady project inflows.
Growth Prospects: Riding India’s Infrastructure Wave
Vikran Engineering is strategically positioned to capitalize on India’s infrastructure boom. The government’s push for renewable energy, smart cities, and enhanced power and water infrastructure aligns perfectly with Vikran’s expertise. The company’s diversified portfolio—spanning underground water distribution, power transmission up to 400kV, railway infrastructure, and solar EPC projects—reduces reliance on any single sector, mitigating risk and ensuring stable revenue streams.
The company’s asset-light model, in-house engineering capabilities, and track record of timely project execution further strengthen its competitive edge. With 45 projects worth ₹19,199.17 crore already completed across 14 states, Vikran has proven its ability to deliver high-value projects that meet stringent quality standards. Its foray into solar EPC and smart metering signals a forward-looking approach to tap into emerging green energy markets.
India’s transmission sector, opened to private players through tariff-based competitive bidding (TBCB), offers significant growth potential. Vikran’s ability to secure contracts through competitive bidding and its focus on operational excellence position it to benefit from this trend. However, investors should note that the company’s reliance on government contracts (61.73% of FY25 revenue) and a recent decline in its order book compared to FY24 could pose challenges if policy shifts or project delays occur.
Risks to Watch: Not All Smooth Sailing
While Vikran’s growth story is compelling, it’s not without risks. The company’s dependence on government tenders makes it vulnerable to policy changes, payment delays, or reduced bidding opportunities. A recent order from the Ministry of Railways banning Vikran for two years due to alleged breaches of integrity could dent its reputation and limit railway project inflows. Additionally, the IPO’s post-issue price-to-earnings (P/E) ratio of 32.12, based on FY25 earnings, is higher than the industry average of 27, suggesting a premium valuation that may concern conservative investors.
Execution risks loom large in the EPC sector. Managing 44 ongoing projects across multiple states could lead to cost overruns or delays, impacting profitability. The company’s working capital-intensive operations and rising borrowings also warrant caution, as they could strain liquidity if projects face disruptions. Finally, stiff competition from established players like KEC International and Kalpataru Projects could challenge Vikran’s market share.
Should You Bid? The Investor’s Verdict
For investors seeking listing gains, Vikran Engineering’s IPO looks promising. The healthy GMP of ₹25–₹28 per share suggests potential listing pops of 25–30%, making it attractive for short-term traders. The company’s strong financials, diversified portfolio, and alignment with India’s infrastructure growth story further bolster its appeal for medium- to long-term investors.
However, the high valuation and sectoral risks call for caution. The P/E ratio of 32.15x is pricey compared to peers, and the company’s reliance on government contracts and exposure to execution challenges could weigh on future performance. Investors with a high-risk appetite and a long-term horizon may find Vikran a worthy addition to their portfolio, particularly given its robust order book and growth potential in high-demand sectors. Conservative investors, however, may want to wait for a more attractive entry point post-listing.
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