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Deepak Builders & Engineers India is a Ludhiana based construction company, undertaking government projects in North India. Deepak Builders & Engineers IPO looks to raise Rs 260.04 crores. The issue is a combination of fresh issue of Rs 217.21 crores and offer for sale of Rs 42.83 crores.

About Deepak Builders & Engineers India Limited:

• Deepak Builders and Engineers India Limited, was established in September 2017,
• Deepak Builders & Engineers India Limited is an integrated engineering and construction company which specializes in a wide array of construction projects, ranging from administrative, institutional, and industrial buildings to hospitals, stadiums, and residential complexes. The company boasts a strong track record of successfully completing turnkey projects that include architectural, structural, civil, and mechanical engineering services. Their expertise also extends to medical gas pipelines, public health services, firefighting systems, and landscaping.
• hey have completed 17 Projects including some prestigious projects, such as construction of Jang-E-Azadi Memorial at Kartarpur, Jalandhar, Punjab, development of Karuna Sagar Maharishi Valmiki Tirath Asthaan at Ram Tirath, Amritsar, Punjab, Construction of Geriatrics Block in AIIMS Campus, New Delhi Construction of super specialty block at Government Medical College, Patiala
• Company operates under 3 business verticals.
  • Construction Projects business
  • Infrastructure Projects business
  • Sale of products. ( left over items, inventory)
• The Promoters of the Company are Deepak Kumar Singal and Sunita Singal.

Financials : Deepak Builders & Engineers India Limited

Anchor: Deepak Builders & Engineers IPO

Salient Points: Deepak Builders & Engineers IPO

• The construction industry in India is on a strong growth trajectory and is expected to reach USD 1.4 trillion by 2025 contributing 8%-10% to the country’s GDP.
• Deepak Builders will use ₹Rs 30 crore of fresh issue proceeds to repay debt, ₹Rs 111.96 crore for working capital, and the remaining for general corporate purposes.
• Apart from 17 completed projects, currently, the company has 12 ongoing projects, including 7 EPC projects and five item-rate/percentage based rate contracts. Out of these ongoing projects, the Construction Projects comprise four hospital and medical college projects, one administrative and institutional building, and one industrial building, and the Infrastructure Projects comprise four projects relating to the upgradation/ development/redevelopment of Railway Stations and related work and two roads and bridges projects relating to rail over bridges.
• Peers:

• Has good profit margins but is noticeably small player.
• They started mainly with Punjab but have successfully expanded across key northern states and regions in India:
  • States: Punjab, Haryana, Rajasthan, Uttarakhand
  • Union Territories: Chandigarh, National Capital Territory of Delhi
• For the fiscal ending March 31, 2024, company reported 19% jump in revenue, along with an 182% surge in profit after tax (PAT) compared to the previous fiscal year. The sharp jump in profit could be window dressing before IPO,. Management says that this is due to better mix of railways/Industrial infra/construction projects which have higher margins.
• They mainly cater to Govt clients. This includes names like

• As of June 30, 2024, the company’s order book for fiscal 2024 stands at Rs 13,80 croren. The order book mix is railway projects (66%), industrial building projects awarded by IOCL (25%), and hospital and medical projects (4.4%) from government-controlled entities.
•  Company has transitioned into a strong EPC player, demonstrating their expertise in various construction and infrastructure development projects. Railways and Industrial projects have better margins and their share is increasing.
• I may apply Deepak Builders & Engineers IPO. Profits have jumped significantly last year but not sure that these will be sustainable. Management has guided for growth but a small issue can sometimes lack market visibility and attention. Good presence in railways platforms construction works can attract some investors. It also has a robust order book.
• GMP as reported on social media was around Rs. 60 (30%).
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.