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• IPO opening date: August 26, 2025
• IPO closing date: August 29, 2025
• IPO size: Rs 772 crore Fresh issue: Rs 721 crore Offer for Sale (OFS): Rs 51 crore by Rakesh Ashok Markhedkar IPO
• Price band: Rs 92-97 per share Minimum bid lot: 148 shares Allocation for investors: Qualified Institutional Buyers (QIBs) 50%, Non-Institutional Bidders (NIBs) 15%,
• Retail Individual Bidders (RIBs) 35%
• Lead Managers: Pantomath Capital Advisors Private Limited, Systematix Corporate Services Limited
• Registrar: Bigshare Services Private Limited

About the Company

• Vikran Engineering is one of the fast-growing Indian Engineering, Procurement and Construction (EPC) companies, providing end-to-end services on a turnkey basis across power, water, and railway infrastructure sectors.
• The company successfully executes projects for government entities, public sector undertakings, and private companies, maintaining a focus on operational excellence and efficient cost structure. It holds pre-qualifications for government projects in power transmission lines up to 400 kV and substations up to 765 kV. Main products/services: Power Transmission, EHV (GIS/AIS) Substation, Power Distribution, Solar Power, Railway and Metro Electrification, Water Segment. Sales & manufacturing units:
• The company has executed projects across 22 states and is currently active in 16 states in India, supported by 190 sites and store locations.
• Employees: 761 employees as of June 30, 2025.
• Promoters: Rakesh Ashok Markhedkar, Avinash Ashok Markhedkar, and Nakul Markhedkar.
• Branches/network: Pan-India presence, currently executing 44 projects across 16 states in India as of June 30, 2025. It maintains a diversified supply chain with over 3,500 suppliers and service providers.

Financials

Post IPO Market cap: Rs 2501.74 crore P/E FY24: 33.45 times P/E FY25: 32.12 times

Observations on results: The company has demonstrated consistent revenue and EBITDA growth across the reported periods. EBITDA margins have shown a positive trend, expanding year-on-year from FY23 to FY25. While Net Profit saw strong growth between FY23 and FY24, its growth significantly slowed in FY25, accompanied by a slight decrease in PAT margin.

Salient points

• Use of funds: The net proceeds from the fresh issue, aggregating Rs 721 crore, are primarily intended for funding working capital requirements (Rs 541 crore), with the balance allocated for general corporate purposes.
• Business scenario: The company anticipates a strong business outlook for the next 10 years due to aligning its operations with significant government expenditure plans in power, electrification, and water irrigation projects. The ongoing mega solar power and evacuation plans are well-suited to the company’s capabilities and government initiatives. Anticipated GST rationalization, particularly reductions on construction and solar materials, is expected to further boost project activity and enhance overall industry and company profitability.
• Business Verticals: The company operates primarily in Power Transmission & Distribution, Water Infrastructure, and Railway & Infrastructure sectors. It also has experience in Solar Power and Smart Metering projects. Revenue Model: Vikran Engineering provides end-to-end Engineering, Procurement, and Construction (EPC) services, encompassing conceptualization, design, supply, installation, testing, and commissioning on a turnkey basis. Contracts are predominantly secured through competitive bidding processes.
• Growth Strategies: The company plans to strengthen its core competencies in power transmission, distribution, and water infrastructure, including undertaking higher-value projects and enhancing its substation and underground cabling businesses. It aims for selective global expansion, particularly into African and Middle Eastern markets, leveraging its domestic experience. Diversification of the EPC portfolio into other sectors like railways, metros, and solar EPC (up to 100MWp turnkey projects and 300MWp balance of system projects) is also a key strategy. The company seeks to capitalize on government initiatives and policies such as the Revamped Distribution Sector Scheme (RDSS) and Jal Jeevan Mission, aligning with national infrastructure development priorities.
• Risks: The company faces an ongoing litigation regarding the recoverability of INR 292.90 million from a customer. There is also a rising dependence on a few key clients, with revenue from the top five customers reaching 69.5%. Furthermore, most of the company’s Directors lack prior directorship experience in listed companies.
• Litigations: As of the Red Herring Prospectus date, there is one material litigation involving a claim for the recoverability of INR 292.90 million from a customer, which is currently pending in the Commercial Court, Jaipur. The management is confident of recovery based on legal advice.
• Revenue split by region (Power Transmission & Distribution): In FY25, revenue from the North region was 25.4%, South 27.6%, East 17.8%, and West 29.2%.
• Revenue split by product or service: In FY25, Power Transmission & Distribution accounted for 72.90% of revenue, Water Infrastructure 26.79%, and Railway & Infrastructure 0.31%. In FY24, these figures were 49.31%, 49.28%, and 1.40% respectively, and in FY23, they were 48.27%, 49.40%, and 2.33%.
• The company operates on an asset-light model, primarily renting equipment, which helps reduce fixed costs and allows for flexible scaling. T
• Expansion: Planned expansion includes existing segments like substations, transmission lines, power distribution, water and irrigation projects, and railway electrification. The company also aims to expand into the private sector and explore international markets, particularly in Africa and the Middle East. Strategies:
• Order book: As of June 30, 2025, the unexecuted order book stood at Rs 2,442.44 crore, which is 2.7 times its FY25 revenue, providing strong revenue visibility. Management aims to maintain the order book at 2 to 2.5 times revenue and expects it to grow further with IPO funds.
• Clients: Key clients include government entities and public sector undertakings such as NTPC, Power Grid Corporation of India, various state power distribution companies (e.g., South Bihar, North Bihar, Transmission Corporation of Telangana, Madhya Pradesh Power Transmission Company), and water and sanitation missions.
• Government orders constitute 61.73% of the order book, public sector undertakings 18.41%, and private sector orders 19.86%.
• Working capital & inventory days: Working capital requirements have escalated, rising from 4.7 months in FY23 to nearly 9 months in FY25, which is twice the industry average of 4-4.5 months.
• Receivables trend: Trade receivables include significant retention money, amounting to INR 1,654.50 million in FY25.
• CAGR Revenues/profits/Margins last 3 years (FY23-FY25): Revenue CAGR: 32.17% PAT CAGR: 34.78% EBITDA CAGR: 41.78% EV/EBIDTA: 12.4x for FY25.

Peers

Management commentary

Fund utilization: Rakkesh Markhedkar, CMD, stated that the entire primary issue proceeds will be utilized for working capital requirements. Growth plans: The company aims to expand within its existing segments, including substation, transmission lines, power distribution projects, water and irrigation projects, and railway electrification. Ashish Bahiti, CFO, noted that the business outlook is very strong for the next 10 years, aligning with government expenditure plans for power segments, daily electrification, and water irrigation projects. The company’s plans are well-suited for mega solar power and their evacuation plans. Clientele: Rakkesh Markhedkar explained that the client base is linked to the company’s expertise in specialized projects (e.g., 765 KV, 400 KV AIS/GIS substations, transmission lines). This leads to a majority of clients being large central government organizations like Power Grid Corporation of India, NTPC, railways, and various state electricity and water resource boards.

Opinion

AI will be applying for the IPO for medium to long term potential. While the issue appears fully priced based on recent financial data, the company benefits from strong growth in the Indian EPC sector, a robust order book providing revenue visibility, and attractive profitability margins compared to its peers due to an asset-light operating model. There are concerns such as deteriorating working capital management and a declining Return on Equity .

Post IPO equity capital: Rs 25.79 crore P/E for FY 24: 33.45 times P/E FY25: 32.12 times

• 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.