Vikran Engineering Limited is hitting the primary market with its ₹772 crore IPO. The company operates in Engineering, Procurement, and Construction (EPC) with a strong presence across power transmission, water infrastructure, railways, and solar EPC projects. While the IPO is creating buzz with a healthy grey market premium (GMP), investors should carefully analyze the strengths, risks, and long-term prospects before investing.
Earlier we posted Detailed Review on Vikran Engineering IPO which you can check.
Key Strengths of Vikran Engineering IPO
- Robust Order Book – The company boasts an order book of ₹24,424 crore as of June 2025, ensuring revenue visibility for the next few years.
- Diversified Business Segments – Presence across power, water, railways, and solar EPC reduces dependency on a single segment.
- Consistent Financial Growth – Revenue has grown from ₹529 crore in FY23 to ₹922 crore in FY25 with improving profit margins.
- Strong Return Ratios – ROE of 16.63% and ROCE of 23.34% indicate efficient capital utilization.
- Asset-Light Model – Focus on execution efficiency rather than heavy asset investments helps maintain agility.
Risks and Concerns
- High Valuation – Post-issue P/E of 32.15x is expensive compared to industry average (27x).
- Government Dependency – Heavy reliance on state and central government contracts exposes the company to policy delays and payment risks.
- Working Capital Intensive – Large EPC projects require high working capital, increasing debt risks.
- Competitive Pressure – Faces stiff competition from established EPC players like KEC International and Kalpataru Projects.
- Execution Challenges – Managing 44 ongoing projects across multiple states may lead to cost overruns and delays.
Long-Term Prospects
India’s push towards infrastructure development, renewable energy, and smart cities creates strong opportunities for EPC companies. Vikran Engineering, with its diversified presence and execution track record, is well-positioned to benefit from these trends. However, its success depends on efficient project execution, managing debt, and maintaining profitability amidst stiff competition.
Final Thoughts
- For Listing Gains: Investors may subscribe, given the decent GMP of ₹25–28 per share.
- For Long-Term: Only investors with a high-risk appetite should consider, as valuations are on the higher side.
View: Subscribe with caution.
✅ Disclaimer: This article is for information purposes only. Investors should consult their financial advisor before making investment decisions.
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