Vikran Engineering IPO Subscribed 2.5x on Day 1; Retail, NIB Lead as GMP Slips

Vikran Engineering Ltd, a fast-growing EPC player with a nationwide presence, is raising ₹772 crore through its IPO from August 26 to 29, 2025. On the first day, investors showed active participation, with total subscription at 2.51x, led by non-institutional buyers and retail investors. Institutional demand, however, remained limited. Meanwhile, the GMP cooled to ₹13 from ₹21 a day earlier, reflecting cautious but steady interest. This update looks at subscription trends, GMP movement, company fundamentals, and risks that matter for investors tracking the IPO closely.

IPO Overview

• IPO Date: August 26 to August 29, 2025
• Total Issue Size: ₹772 crore
• Price Band: ₹92 to ₹97 per share
• Lot Size: 148 Shares
• Tentative Allotment Date: September 1, 2025
• Listing Date: September 3, 2025 (Tentative)
• Subscription Status: 2.51 times as of day 1.
• GMP: The GMP for Vikran Engineering IPO is ₹13, reflecting a 13.4% gain over the issue price, according to Chittorgarh.com (as of August 28).
  Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Highlight of Day 1 of the IPO

On Day 1, Vikran Engineering IPO achieved a subscription of 2.51x, driven by strong non-institutional demand (5.43x) and solid retail participation (2.44x). QIBs contributed 0.43x, showing a wait-and-watch approach. The GMP, however, slipped from ₹21 to ₹13, pointing to a moderation in listing expectations even as overall demand stayed healthy.

How does Vikran Engineering Make Money?

Vikran delivers end-to-end EPC services cutting across power transmission & distribution, smart metering, water infrastructure, and railway projects. Operating a light asset model with mostly leased equipment, it manages design, supply, installation, and commissioning, emphasizing flexibility and cost efficiency. Currently handling multiple projects nationwide, Vikran boasts a broad presence with 190 active sites and a workforce of over 760 employees.

Objectives of the IPO

• Working Capital: ₹541 crore to support day-to-day operational cash needs tied to projects.
• Capital Expenditure: Funding to bolster assets, especially expanding and upgrading facilities.
• General Corporate Use: A portion reserved for strategic growth initiatives, brand building, and acquisitions.
• Offer for Sale: Existing promoters divesting some holdings; proceeds won’t flow to the company.

Strengths:

• Revenue grew at a healthy CAGR of 32%, while profits soared nearly 35% annually in the past two years.
• Industry-best EBITDA margin of 17.5%, signaling operational efficiency.
• Strong order book at over twice the annual revenue, lending visibility to future earnings.

Risks:

• High working capital intensity (75% of revenue) and negative operating cash flow may strain liquidity.
• Revenue concentrated with a few clients (top ten accounts for 88%) exposes the business to policy shifts and payment delays.
• Rising debt levels (32.7% annually between FY23 and FY25) necessitate careful financial management.
• Limited scale with less than 0.5% market share poses competitive challenges.

For detailed information, visit Vikran Engineering’s IPO page.

Peer Comparison

As per the RHP, Vikran Engineering’s listed industry peers are Bajel Projects, Kalpataru Projects, Techno Electric & Engineering, SPML Infra, KEC International, and Transrail Lighting.

Source: RHP

IPO Valuation

Vikran’s P/E of 22.3 places it attractively below peers such as Bajel Projects and Techno Electric, suggesting reasonable pricing. Return on net worth and strong margin profiles signal earnings efficiency, but investors should watch financial leverage and sector cyclicality closely.

Disclaimer: The P/E ratio here is calculated using the company’s post-IPO equity and its most recent FY25 net profits at the upper end of the price band.

Who’s Leading Vikran Engineering?

Vikran’s leadership is helmed by Chairman and Managing Director Rakesh Ashok Markedkar, who carries over 34 years’ experience in the EPC space, touted for excellence and honored with multiple leadership awards. Alongside him, Avinash and Nakul Markedkar play crucial leadership roles, bringing operational depth and strategic direction.

Industry Outlook

The company operates in the Engineering, Procurement, and Construction (EPC) sector, which is all about building big projects. These companies provide complete, start-to-finish services from planning and design to getting materials, installing them, testing, and finally handing over the completed project. Companies in this sector make money by successfully completing these projects, often won through a competitive bidding process, within agreed budgets and timelines.

With an expected GDP growth of nearly 6.7%, project pipelines are robust. Government initiatives in renewable energy and smart grid tech add tailwinds. However, rising commodity costs, high working capital needs, and policy uncertainties challenge margins and cash flow for EPC firms.

Who’s Making Money via the IPO OFS: Selling Shareholders

One notable aspect of the Vikran Engineering IPO is the OFS component, where a portion of shares is sold by existing shareholders rather than the company raising fresh capital. In this IPO, Rakesh Ashok Markkar, one of the promoters, is the sole selling shareholder. He is offloading 52,57,731 equity shares worth up to ₹51 crore. This means that while the company will receive proceeds from the fresh issue to fund growth and operations, this portion of the IPO proceeds will go directly to this promoter, providing him a chance to realize part of his investment.

Analyst View

The Vikran Engineering IPO has drawn decent interest on Day 1, with total subscription at 2.51x. Retail participation (2.44x) and strong demand from non-institutional buyers (5.43x) underline investor appetite. However, Qualified Institutional Buyers (QIBs) remain cautious with just 0.43x subscription, which is important since institutional demand often sets the tone for pricing stability.

On the grey market side, the GMP slipped from ₹21 before IPO opening to ₹13 on Day 1, reflecting some cooling of sentiment. While this doesn’t mean weak prospects, it does show cautious optimism rather than frenzy.

Business fundamentals remain attractive with a large EPC order book and margin leadership, but working capital pressures and execution risks shouldn’t be ignored. Overall, the combination of subscription trend and GMP shows reasonable traction, although momentum from QIBs will be critical in the days ahead.

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5. Tap Apply Now and choose the number of lots.
6. Use INDpay UPI for instant mandate tracking.
7. Your funds will be blocked until the share allotment is finalized.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Vikran Engineering's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.