Highlights
| Issue Size –: 7,95,87,627 shares | Issue Open/Close – 26 Aug / 29 Aug, 2025 |
| Price Band (Rs.) 92 – 97 | Issue Size (Rs.) – 7,720 mn |
| Face Value (Rs) 1 | Lot Size (shares) 148 |
Vikran Engineering Limited (VEL), incorporated on 2015 and it is an Engineering, Procurement and Construction (EPC) company which provides end to-end services from conceptualisation, design, supply, installation, testing and commissioning on a turnkey basis and has presence across multiple sectors including power, water, and railway infrastructure.
Their diversified portfolio spreads across (i) Power Transmission and Distribution segment (ii) Water Infrastructure segment (iii) Railways & Infra segment. The company also has experience in Solar EPC of ground mounted solar projects and smart metering.
Out of the total proceeds of Rs. 7,720 mn, ~Rs. 5,410 mn would go towards funding working capital and ~Rs 1,800 mn would go towards general corporate purpose and ~Rs. 510 mn would go towards existing promoter selling shareholders of the company.
Key Highlights
- Favourable government initiatives, increased infrastructure development in sectors such as roads, power, railways, irrigation etc have provided impetus to EPC contracts. Over the years, on back of strong government support through various initiatives has increased GVA of the industry registered 6.1 pct CAGR FY12-FY25.
- VEL have successfully completed 45 projects across 14 states with a total executed contract value of Rs. 19,199 mn. As of Q1FY25, they have 44 ongoing projects across 16 states, aggregating orders of Rs. 51,202 mn, of which Order Book of Rs. 24,424 mn.
- VEL follow an asset light model by executing more orders with relatively lower investment in fixed assets. they take equipment on rent from third party lessors of equipment across various states to meet requirements of equipment as per project needs. This helps to reduce fixed costs and makes the execution of projects cost and logistics efficient.
- Leveraging experience in the power transmission and distribution sector, VEL intend to undertake additional projects and also undertake higher value projects in this segment. They will also intend to further strengthen substation and underground cabling businesses.
- VEL are presently executing 12 ongoing water infrastructure projects. They are also currently executing projects in Madhya Pradesh, Uttar Pradesh and Chhattisgarh under the government’s Jal Jeevan Mission initiative.
- VELL’s key growth strategies include (i) Strengthen core competencies in power transmission and distribution and water infrastructure sectors (ii) Selectively expanding geographical footprint globally (iii) Expand EPC portfolio into other EPC sectors (iv) Capitalizing on Government initiatives and policies.
- The sales/EBITDA/ profit of the company have grown 32.2 pct CAGR/41.8 pct CAGR/34.8 pct CAGR over FY23-25. In FY25 sales of the company stood at Rs. 9,158 mn, rose 16.5 pct YoY. EBITDA of the company increased 20.21 pct YoY to Rs. 1,602 mn while margins expanded 50 bps YoY to 17.5 pct. Profit came at Rs. 778 mn, grew 3.99 pct YoY.
Key Risk
- Executive Director/Gati Shakti (Elect.) Railway Board has passed an Order dated July 26, 2024, in terms of which CORE/Vigilance has held that the Ministry of Railways should ban the Company for a period of two years for breaching code of integrity and involvement in illegal gratification.
- VEL is currently facing criminal proceedings based on a charge sheet filed by the Central Bureau of Investigation (CBI).
Financial Performance
| Particulars | FY23 | FY24 | FY25 |
| Sales (Rs. mn) | 5,243 | 7,859 | 9,158 |
| EBITDA (Rs. mn) | 797 | 1,333 | 1,602 |
| EBITDA Margin (%) | 15.2% | 17.0% | 17.5% |
| Profit/Loss (Rs. mn) | 428 | 748 | 778 |
| Profit/Loss Margin (%) | 8.1 | 9.46 | 8.44 |
| ROCE (%) | 32.7% | 25.7% | 16.6% |
| ROE (%) | 28.0% | 30.4% | 23.3% |
Peers Comparison based on FY25 Financials
| Particulars | Vikran | Bajel Projects | Techno Electric & Engineering | KEC | Transrail |
| Sales (Rs. mn) | 9,158 | 25,982 | 22,687 | 2,18,467 | 53,078 |
| EBITDA (Rs. mn) | 1,602 | 593 | 2,944 | 15,039 | 6,734 |
| EBITDA Margin (%) | 17.5% | 2.3% | 13.0% | 6.9% | 12.7% |
| Profit/Loss (Rs. mn) | 778 | 155 | 4229 | 5707 | 3266 |
| Profit/Loss Margin (%) | 8.44 | 0.6% | 17.4% | 2.6% | 6.1% |
| ROE (%) | 23.3% | 2.32% | 11.31% | 10.67% | 17.36% |
Valuation
VIKRAN stands as one of the fast-growing Indian Engineering, Procurement and Construction (EPC) company with extensive portfolio covers a spectrum of essential services, ranging from infrastructure projects to Power Transmission and EHV substations reaching up to 765kV. At the upper end of the price band of Rs. 97, the issue is priced at a PE of 32.2x its FY25 earnings on post issue equity capital. The issue appears to be fully priced. One can avoid this issue.
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