IPO Note : Vikran Engineering Ltd by Geojit Financial Services Ltd
Focusing on Infrastructure EPC projects....
Vikran Engineering Limited, incorporated in 2008, is a fast-growing EPC firm based in Thane, Maharashtra, specializing in turnkey infrastructure projects across power transmission (72.9% of FY25 revenue), water supply (26.7%), and railway electrification (0.31%). The portfolio includes high-voltage transmission lines, substations, smart metering, underground and surface water projects under the Jal Jeevan Mission, and railway electrification works.
* India’s power demand is expected to rise from 1,790–1,800 billion units in FY26 to 2,255–2,265 billion units by FY30, reflecting a CAGR of 5–7%. This growth will be fueled by sustained economic momentum, upgrades in distribution infrastructure, and key reforms by the central government aimed at improving the efficiency and resilience of the power sector.
* Vikran’s Revenue/EBITDA/PAT grew at a CAGR of 32%/42%/35% between FY23 and FY25, reaching Rs.915.8/Rs.160/Rs.77.8cr due to a healthy order book and superior execution.
* In FY25, the company delivered an EBITDA margin of 17.5% and a PAT margin of 8.5%, primarily due to a higher contribution from the power transmission segment in the overall revenue mix, from 48% to 73% from FY23 to FY25.
* As of June 30, 2025, the company has an order book of Rs.2,442.44cr. The order book to sales ratio is 2.7x, which provides revenue visibility for the next 2-3 years.
* The company has ~30 major ongoing projects in the power transmission and distribution business, with a contract value of Rs.3,357.18cr, 12 ongoing projects in the water infrastructure sector, with a contract value of Rs.1,693.71cr and 2 ongoing projects in the railways & infrastructure sector with a contract value of Rs.69.32cr as of june 30, 2025.
* At the upper price band of Rs.97, Vikran’s FY25 P/E ratio of 32x appears fairly priced compared to peers. Vikran has an established position as a fast-growing EPC player with a diversified order book across power transmission, water infrastructure, and railway sectors. The company’s strategic focus on capitalizing on government initiatives like the Revamped Distribution Sector Scheme and Jal Jeevan Mission, coupled with its asset-light model and pan-India presence, positions it well to benefit from India’s infrastructure boom. Therefore, we recommend a SUBSCRIBE rating for investors with a long-term horizon.
Purpose of IPO
The Issue comprises of a fresh issue of up to 7,43,29,896 equity shares totalling Rs.721cr and OFS of up to 52,57,731 shares totalling Rs.51cr. The objectives of the issue are i) Funding of the working capital requirements of the company (Rs.541cr), ii) General corporate purposes.
Key Risks
* Most projects are won via competitive bidding; delays or failure to secure new contracts may affect growth, performance, and stability.
* Policy changes or delays in government tenders may disrupt operations, contract flow, and adversely impact financial performance.
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