Deepak Builders & Engineers Limited is coming up with an IPO with a fresh issue of 1,07,00,000 shares worth INR 217.21 crores and an offer to sell existing 21,10,000 shares for INR 42.83 crores. The company aims to repay the existing borrowings, fund the working capital requirement, and general corporate purposes.

Deepak Builders IPO – Important Dates

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Deepak Builders & Engineers India Limited IPO  – Company Profile

Deepak Builders & Engineers is an integrated engineering and construction company, specializing in the execution and construction of administrative & institutional buildings, hospitals and medical colleges, industrial buildings, historical memorial complexes, stadium and sports complexes, residential complexes, and various developmental and other construction activities (“Construction Projects”). 

While the primary focus and strength are deeply rooted in Construction Projects, the company has diversified in undertaking specialized structural work such as flyovers, rail under bridges, rail over bridges, approach roads, and development and redevelopment of railway stations (“Infrastructure Projects”). 

The company has demonstrated expertise in various construction and infrastructure development projects including specialized structures across four states of India, i.e. Punjab, Haryana, Rajasthan, Uttarakhand, and two Union Territories i.e. Chandigarh and the National Capital Territory of Delhi.

Deepak Builders & Engineers India IPO  Fundamental Analysis

Deepak Builders & Engineers’ revenue grew by 18.9%, reaching ₹6,034.27 million in FY2024, while PAT surged by 325% to ₹604.10 million. RONW jumped to 52.39%, reflecting strong profitability. The debt-equity ratio improved to 0.91, indicating reduced leverage, with solid asset growth and effective cost control, contributing to financial stability.

 1. Revenue Growth:

• Revenue (₹ in millions):
  • Revenue grew from ₹5,073.40 million in FY2023 to ₹6,034.27 million in FY2024, reflecting an 18.9% increase, showing steady growth.
  • For Q1 FY2025, revenue stood at ₹1,240.27 million. This is relatively slower but consistent with historical performance.

2. Expense Management:

• Expenses (₹ in millions):
  • Expenses increased from ₹4,067.34 million in FY2023 to ₹4,349.57 million in FY2024, a 6.9% rise, indicating controlled cost management compared to revenue growth.
  • For Q1 FY2025, expenses totaled ₹830.98 million, showing effective expense control in line with revenue.

3. Profitability:

• Profit After Tax (₹ in millions):
  • PAT jumped from ₹142.12 million in FY2023 to ₹604.10 million in FY2024, representing a 325% increase. This highlights a major leap in profitability.
  • In Q1 FY2025, PAT reached ₹213.95 million, which shows that the company is maintaining strong profits.
• Diluted EPS:
  • EPS rose from ₹5.96 in FY2023 to ₹16.84 in FY2024, confirming the rise in earnings for shareholders.
  • For Q1 FY2025, EPS is ₹3.96 (not annualised), maintaining a consistent trend in profitability.

4. Equity and NAV Analysis:

• Equity (₹ in millions):
  • Equity increased from ₹1,005.43 million in FY2023 to ₹1,601.00 million in FY2024, a 59.2% rise, signaling healthy capital growth.
  • By Q1 FY2025, equity rose to ₹1,741.07 million, continuing to strengthen the company’s financial position.
• NAV per Equity Share (₹):
  • NAV per share increased from ₹24.90 in FY2023 to ₹39.37 in FY2024, demonstrating an increase in asset value per share.
  • In Q1 FY2025, NAV grew to ₹43.42, further improving shareholder value.

5. Return on Net Worth (RONW):

• Efficiency:
  • RONW was 26.80% in FY2023 and jumped to an impressive 52.39% in FY2024, reflecting excellent return on equity and profitability.
  • In Q1 FY2025, RONW is 9.57% (not annualised), which, when annualized, suggests that profitability is being maintained at solid levels.

6. Financial Health Indicators:

• Debt-Equity Ratio:
  • The debt-equity ratio improved slightly from 1.04 in FY2023 to 1.00 in FY2024, showing that the company maintains a balanced leverage level.
  • By Q1 FY2025, the debt-equity ratio further improved to 0.91, reflecting a reduction in leverage and improved financial stability.
• Total Assets and Liabilities:
  • Total assets increased from ₹4,492.98 million in FY2023 to ₹6,411.02 million in Q1 FY2025, showing steady growth in the company’s asset base.
  • Total liabilities grew from ₹3,487.55 million in FY2023 to ₹4,669.95 million in Q1 FY2025, but the lower debt-equity ratio suggests that liabilities are being well-managed.

Deepak Builders & Engineers IPO Financial Analysis

Deepak Builders & Engineers India Limited IPO Peer Comparison

Deepak Builders has a RoNW of 52.39% with EPS of ₹16.84 and NAV of ₹39.37. Competitors like IRCON, Ahluwalia, PSP, and ITD Cementation have lower RoNW but higher NAVs, reflecting varying profitability and asset values across companies.

Deepak Builders & Engineers India IPO Objective

The main objective of Deepak Builders & Engineers’ is to allocate INR 30 crores for loan repayment, INR 111.96 crores for working capital needs, and the remaining funds for general corporate purposes such as operational expenses, project development, and business expansion.

1. To repay the borrowings: The company proposes to utilise INR 30 crores for the repayment of the existing loans and borrowings. 

2. To meet the working capital requirement: The company’s business is working capital intensive, and hence, the company proposes to use INR 111.96 crores to meet the working capital requirement.  

3. General corporate purpose: The company will deploy the balance of funds for general corporate purposes, including meeting operating expenses and initial development costs for various projects, strengthening business development and marketing capabilities, and addressing unforeseen exigencies in ordinary operations.

Deepak Builders & Engineers IPO Risks And Challenges

Deepak Builders & Engineers’ revenue is heavily dependent on government-related projects, making it vulnerable to policy changes that could affect contracts. Project delays or cancellations and ongoing negative cash flows pose risks to business performance and future profitability.

1. The revenue is majorly concentrated from projects undertaken or awarded by government, semi-government, and government-controlled entities. Any adverse changes in government policies may lead to the contracts being foreclosed, terminated, restructured, or renegotiated, which may have a material effect on the business.

2. The ongoing projects are exposed to various implementation risks and uncertainties and may be delayed, modified, or canceled for reasons beyond the control, which may adversely affect the business.

3. The company has sustained negative cash flows from operating activities in the past and may experience earnings declines operating losses or negative cash flows from operating activities in the future.

Deepak Builders & Engineers India IPO  – Industry & Market Potential

Currently, with the multitude of stakeholders, the Indian Construction industry is very fragmented comprising many small players and few large players. Large players dominate the construction of complex projects in roads, power, ports, airports, industrial plants, and railways as large infrastructure development requires high up-front capital investment. Moreover, stringent technical ability norms, experience, and operational and financial parameters defined by contract awarding authorities limit the entry of small players in large projects.

India’s vision of becoming ‘Atmanirbhar’ (self-reliant) and enhancing its manufacturing capabilities and exports has led to significant efforts and investment in the form of Production Linked Incentives (PLI) schemes. An outlay of INR 1.97 lakh crore (over US$ 26 billion) has been announced in the Union Budget 2021-22 for these schemes across 14 key manufacturing sectors from FY 2021-22. These PLI schemes are aimed at attracting companies looking to diversify their supply chains away from China.

Deepak Builders & Engineers India Limited IPO – Type of Offer

Deepak Builders & Engineers Limited is set to launch an IPO, offering a fresh issue of 1,07,00,000 shares valued at INR 217.21 crores, along with a sale of 21,10,000 existing shares for INR 42.83 crores. The funds will be used to repay existing loans, support working capital needs, and for general corporate purposes.

1. Fresh Issue: The company plans to issue 1,07,00,000 new shares worth INR 3,600 crores. The proceeds will be utilised to repay loans, meet the working capital requirement, and for general corporate purposes.

2. Offer for sale: The company is coming up with an offer to sell 21,10,000 existing shares. Below are the details of the promoter selling their existing shares: 

Deepak Builders & Engineers IPO Offer Size

The offer size for Deepak Builders & Engineers Limited’s IPO is INR 260.04 crores, comprising a fresh issue of 1,07,00,000 shares worth INR 217.21 crores and an offer for sale of 21,10,000 shares for INR 42.83 crores. The company plans to use the proceeds to repay borrowings, fund working capital, and for general corporate purposes.

Deepak Builders & Engineers India Limited IPO Allotment Structure

Deepak Builders & Engineers Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. 

● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

How to apply for the Deepak Builders & Engineers IPO?

To apply for the Deepak Builders & Engineers Limited IPO through Alice Blue, you would typically follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

1. Check for IPO Details: Once your account is active, you can check for the Deepak Builders & Engineers Limited IPO details in the IPO section of the Alice Blue platform.
2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
3. Submit the Application: Confirm all your details and submit your application.

 You can apply for the Deepak Builders & Engineers Limited IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

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How do you check Deepak Builders & Engineers Limited’s IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or the trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Deepak Builders & Engineers Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Deepak Builders & Engineers Limited IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, we request you reach out to our customer support team at Alice Blue for detailed assistance. 

 Apart from Alice Blue, there are other ways to check the allotment status of the Deepak Builders & Engineers Limited IPO:

● Registrar’s Website: Visit the website of Kfin Technologies Limited, the registrar of the Deepak Builders & Engineers Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

● BSE NSE: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) National Stock Exchange (NSE). You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

Deepak Builders & Engineers Limited  Ltd IPO Offer Registrar

The registrar for the Deepak Builders & Engineers Limited IPO is Kfin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly. 

Contact information for the registrar: 

Kfin Technologies Limited

Selenium, Tower B, 

Plot No. 31 and 32 Financial District Nanakramguda, 

Serilingampally Mandal Hyderabad 500 032 

Website: www.kfintech.com

E-mail: [email protected]

Deepak Builders & Engineers Limited Limited IPO –  FAQs 

1. What is Deepak Builders & Engineers Limited’s allotment date? 

The allotment date of the Deepak Builders & Engineers Limited IPO is October 24, 2024. 

2. What is the price band of the Deepak Builders & Engineers Limited IPO? 

The price band for the issue is INR 192 -203 per share. 

3. What is the size of the Deepak Builders & Engineers Limited IPO? 

The offer size for Deepak Builders & Engineers Limited’s IPO is INR 260.04 crores, comprising a fresh issue of 1,07,00,000 shares worth INR 217.21 crores and an offer for sale of 21,10,000 shares for INR 42.83 crores. The company plans to use the proceeds to repay borrowings, fund working capital, and for general corporate purposes.

4. What is the listing date of the Deepak Builders & Engineers Limited IPO? 

The listing date of Deepak Builders & Engineers Limited’s IPO is October 28, 2024.