IPO closes on 29 Aug'25
Vikran Engineering Ltd
Minimum Investment
₹ 14,356 / 148 shares
Our Verdict:
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- Vikran Engineering Ltd (VEL) has established itself as a mid-sized EPC player with a strong presence in power transmission. While its scale may be smaller compared to larger listed peers, its efficient project execution remains a key strength.
- Over the past three years, VEL has shown impressive revenue and earnings growth. In terms of valuation also, the IPO is attractively priced at 22x based on FY25 earnings.
- With VEL’s robust growth trajectory, fair valuations, solid order book and the structural growth of the industry, investors may consider subscribing to the IPO with a medium-to-long-term perspective.
About the company
Founded in
4 Jun'08
Managing director
Rakesh Markhedkar
- VEL is an Engineering, Procurement and Construction (EPC) company with expertise across various infrastructure sectors. Its portfolio includes power transmission and distribution, water networks, underground cabling, solar EPC, and railway traction substations.
- With a pan-India presence, VEL operates across 190 sites and store locations as of June 30, 2025, supported by a broad supplier base of over 3,500 partners, ensuring scalability and efficient project execution. The firm is strategically positioning itself for higher-value EPC opportunities by expanding into metro projects, balance-of-system solar projects up to 300 MWP and bullet train power supply contracts.
STRENGTHS
- Financial Performance: VEL achieved impressive growth from FY23 to FY25, with a robust CAGR of 32% in operating revenue, 42% in EBITDA and 35% in net profit.
- Solid Return Ratios: VEL demonstrates strong operational efficiency with a with a Return on Equity (RoE) of 17% and a Return on Capital Employed (RoCE) of 23% in FY25.
- Solid Order Book: As on June 30, 2025, VEL’s Order Book was Rs 2,442.4 crore, which is ~2.5 times of its FY25 revenue, thereby providing strong revenue visibility.
- Financial Flexibility: Post-IPO, VEL will achieve a debt-free balance sheet, with its debt-to-equity ratio nearing zero. The management has also expressed the potential to raise debt up to 1x equity, should growth opportunities arise. This prudent approach ensures the company has ample flexibility to fund future expansion and pursue new business opportunities in emerging sectors.
RISK FACTORS
- Client Concentration: In FY25, over 88% of VEL’s revenue was derived from the top 10 customers. A reduction or loss of orders from these key clients could have a significant impact on financial performance.
- Decline in Order Book: VEL's order book for FY25 has decreased notably compared to FY24, with a marked reduction in government orders and a decrease in the value of orders related to water and railway infrastructure projects.
- Trade Receivables: As of FY25, VEL's trade receivables stood at Rs 634 crore, of which Rs 79 crore (12.19%) remained outstanding for more than six months. Delayed or non-payment of receivables could negatively affect the company’s financial health, operations, and cash flow.
- Cash Flow Challenges: VEL has experienced negative operating cash flows for both FY25 and FY24. Prolonged negative cash flow may strain liquidity, increase dependence on external funding, and threaten business continuity.
- Regulatory Concern: The Executive Director of Gati Shakti (Elect.) Railway Board issued an order on July 26, 2024, stating that CORE (Central Organisation for Railway Electrification)/Vigilance found VEL in breach of the code of integrity and involved in illegal gratification. It has been recommended that the Ministry of Railways impose a two-year ban on VEL.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 772 crore
Fresh Issue
₹ 721 crore
OFS
₹ 51 crore
Price range
₹ 92 - 97
Lot size
148 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Meeting the working capital requirements of the company; and
- General corporate purposes.
Dates
Bidding open
26 Aug'25
Bidding close
29 Aug'25
Allotment date
1 Sep'25
Refund date
2 Sep'25
Listing
3 Sep'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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