Deepak Builders & Engineers India, an engineering and construction company, will commence its maiden share sale for subscription from Monday, October 21, and it will end on October 23. The allocation to anchor investors is scheduled to take place on Friday, October 18.
The Punjab-based company has fixed the price range for its ₹260-crore initial public offer (IPO) at ₹192 - 203 per share with a face value of ₹10 each.
The engineering and construction firm plans to issue 10.7 million new equity shares and an additional 2.11 million shares through offer-for-sale (OFS).
Participation in the OFS will include Deepak Kumar Singal and his spouse, who are the current majority owners of the company with almost 100% ownership.
Fedex Securities Pvt Ltd will serve as the book-running lead manager for Deepak Builders & Engineers' IPO, while Kfin Technologies Ltd will act as the registrar for the offering.
Deepak Builders & Engineers IPO has allocated 50% of the shares in the public issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 35% of the offer is set aside for retail investors.
Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.
Deepak Builders & Engineers IPO Promoters
The company's promoters are Deepak Kumar Singal and Sunita Singal.
Deepak Builders & Engineers IPO Peers
According to the red herring prospectus (RHP), IRCON International Ltd is one of the company's listed peers, with a P/E ratio of 24.67. Ahluwalia Contracts (India) Ltd is also listed as a peer, with a P/E ratio of 19.25. Additionally, PSP Projects Ltd has a P/E ratio of 19.16, and ITD Cementation Ltd has a P/E ratio of 37.04.
Deepak Builders & Engineers Business
Deepak Builders & Engineers India Limited is specialised in the construction of administrative, institutional, and industrial buildings, hospitals, stadiums, residential complexes, and various other construction projects.
The company has effectively completed full turnkey projects, which include architectural, structural, civil, MEP, firefighting systems, public health services, IT systems, operation theaters, medical gas pipelines, and landscaping.
The company's activities are categorised into Construction Projects business, Infrastructure Projects business, and Sale of products.
Deepak Builders & Engineers ongoing Projects
The company is currently managing twelve (12) active projects, which consist of seven (7) EPC projects and five (5) item rate/percentage rate contracts.
Within their total ongoing projects, the construction projects category includes four (4) hospital and medical college projects, one (1) administrative and institutional building, and one (1) industrial building. Their infrastructure projects category encompasses four (4) projects related to the upgrade, development, or redevelopment of railway stations and related work, as well as two (2) road and bridge projects related to rail over bridges.
Additionally, the company is responsible for carrying out operation and maintenance (O&M) activities in compliance with their contractual obligations under the projects.
Deepak Builders & Engineers Clients
The primary clientele of the company includes Northern Railways, the Department of Public Works (Roads & Buildings) in Punjab (PWD Punjab), the Department of Public Works (Roads & Buildings) in Haryana (PWD Haryana), the Public Works Department in Uttarakhand (PWD Uttarakhand), WAPCOS, NPCCL, HSCC, IOCL, the Greater Mohali Area Development Authority in Punjab (GMADA Punjab), the Ludhiana Smart City Limited (LSCL), the Punjab Cricket Association (PCA), and the Punjab Heritage and Tourism Promotion Board (PHTPB).
Deepak Builders & Engineers Group Company
The only group company of the firm is Deepak Singal Engineers and Builders Private Limited.
Deepak Builders & Engineers Financials
The revenue of Deepak Builders & Engineers India grew by 19%, and the profit after tax (PAT) surged by 182% from the financial year ending on March 31, 2023 to the financial year ending on March 31, 2024.
Deepak Builders & Engineers Order Book
As of June 30, 2024, the company's order book for fiscal 2024 stands at ₹13,803.89 million, while it was ₹11,126.88 million for fiscal 2023 and ₹16,578.79 million for fiscal 2022. The order book value on June 30, 2024, was comprised of 66.03% from railways projects, 25.05% from an industrial building project awarded by Indian Oil Corporation Ltd (IOCL), and 4.38% from hospital and medical projects awarded by government-controlled entities.
Deepak Builders & Engineers IPO - Key Risks
Some of the key risks are as follows;
The anchor investor portion will have 50% of the equity shares allotted to anchor investors locked in for 90 days from the date of allotment, and the remaining 50% of the equity shares allotted to anchor investors will be locked in for 30 days from the date of allotment.
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