Vikran Engineering Makes Modest Debut with 3% Premium, Meeting Market Expectations

Vikran Engineering Limited, the engineering, procurement, and construction (EPC) company, made a modest debut on BSE and NSE on September 3, 2025. After closing its IPO bidding between August 26-29, 2025, the company commenced trading with a 3% premium at ₹99.70 on BSE and ₹99 on NSE, meeting initial market expectations and reflecting steady investor confidence in the infrastructure development sector.

 Vikran Engineering Listing Details

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Vikran Engineering Limited launched its IPO at ₹97 per share with a minimum investment of 148 shares costing ₹14,356. The IPO received a strong response with a subscription of 24.87 times - NII leading at 61.77 times, QIB at 20.51 times, and retail investors at 11.56 times, indicating solid investor interest across all categories in the EPC business with backing from marquee investors.

First-Day Trading Performance Outlook

• Listing Price: The Vikran Engineering share price opened at ₹99.70 on BSE and ₹99 on NSE, representing premiums of 2.78% and 2% respectively from the issue price of ₹97, delivering modest gains for investors and meeting market expectations.

Growth Drivers and Challenges

Growth Drivers:

• Strong Financial Growth: Revenue increased by 17% to ₹922.36 crore in FY25 with consistent profitability, reflecting robust demand for infrastructure projects and successful execution capabilities.
• Substantial Order Book: Order book worth ₹2,442 crore as of June 2025 providing strong revenue visibility and business sustainability across power transmission, water infrastructure, and railway projects.
• Diversified Service Portfolio: Comprehensive EPC services across power transmission and distribution (up to 400kV substations), water infrastructure, railway infrastructure, and expanding solar energy projects.
• Asset-Light Business Model: Efficient capital utilization with strong ROCE of 23.34% and healthy EBITDA margin of 17.50% indicating operational efficiency and scalability.

Challenges:

• Modest Profit Growth: PAT grew by only 4% to ₹77.82 crore despite 17% revenue growth, indicating margin pressures and competitive pricing in the EPC sector.
• High Valuation Concerns: Post-IPO P/E ratio of 32.15 and Price to Book Value of 3.81 indicating premium pricing requiring sustained performance to justify investor expectations.
• Execution Risk: EPC projects involve execution risks, regulatory challenges, and working capital intensive operations affecting cash flow management.
• Market Dependence: Business heavily dependent on government infrastructure spending and policy support for power transmission and water projects.

Utilisation of IPO Proceeds

• Working Capital Requirements: ₹541 crore for funding working capital needs supporting large-scale EPC project execution and business operations across multiple states.
• General Corporate Purposes: ₹129.97 crore for general corporate purposes supporting business expansion and strategic initiatives in the infrastructure sector.
   

Financial Performance of Current Infraprojects

• Revenue: ₹922.36 crore for FY25, showing solid growth of 17% from ₹791.44 crore in FY24, reflecting strong demand for infrastructure projects and successful business expansion.
• Net Profit: ₹77.82 crore in FY25, representing modest growth of 4% from ₹74.83 crore in FY24, indicating margin pressures despite revenue growth.
• Financial Metrics: Solid ROE of 16.63%, strong ROCE of 23.34%, reasonable debt-to-equity ratio of 0.58, good RoNW of 16.63%, healthy PAT margin of 8.44%, robust EBITDA margin of 17.50%, high Price to Book Value of 3.81, and market capitalisation of ₹2,501.74 crore.