Deepak Builders & Engineers IPO: Review, Valuation, Date & GMP

Deepak Builders & Engineers IPO-Complete Overview

Deepak Builders & Engineers IPO a Mainboard IPO is a book-built issue of Rs.260.04 crore (12,810,000 Shares) by Deepak Builders & Engineers Ltd. It is a construction company that specializes in building hospitals, stadiums, residential complexes, offices, institutional, and industrial structures, among other things. It was founded in September 2017.

The business has finished turnkey projects including operation theaters, medical gas pipelines, architecture, structural engineering, civil engineering, MEP, firefighting systems, and public health services.

The following verticals best describe the company's business:

The businesses involved in construction projects, infrastructure projects, and product sales.

The business has finished building and infrastructure projects in two Union Territories, Chandigarh, and the National Capital Territory of Delhi, as well as four states in India: Punjab, Haryana, Rajasthan, and Uttarakhand.

The company manages 12 projects, comprising five item rate/percentage rate contracts and seven EPC projects. The construction portfolio comprises four hospital and medical college projects, one institutional and administrative building, and one industrial building project. The infrastructure projects comprise two road and bridge projects on the Railway over bridges, as well as four projects centered around the development, renovation, and upkeep of railway stations and associated work.

The company's order book quantities as of June 30, 2024, are as follows: 16,578.79 million for Fiscal 2022, Rs.7,196.32 million for Fiscal 2021, Rs.13,803.89 million for Fiscal 2024, and Rs.11,126.88 million for Fiscal 2023.

This new IPO is to be launched on 21 October 2024, and the initial public offering of this upcoming IPO will end on 23 October 2024.

 

Deepak Builders & Engineers IPO Details

Deepak Builders IPO price band is Rs.192 to Rs.203 for each Share. The IPO date is from 21 October to October 23, 2024, and it will be listed at BSE and NSE.

 

Deepak Builders & Engineers IPO listing date

The IPO listing date is on Monday, October 28, 2024,

 

Deepak Builders IPO size

This IPO size is a total of 1,28,10,000 Shares (Rs.260.04) with a fresh issue of 10,700,000 (Rs.217.21 Cr) and an offer for sale (OFS) of 2,110,000 crore Shares (Rs.42.83 Cr).

If You want to apply for the IPO, Click Here to Open a Demat Account

 

Deepak Builders & Engineers: Project Portfolio

 

Company Financial

The company’s revenue grew by 19% and PAT increased by 182% between FYs ended 31 March 2024 and 31 March 2023.

(Amount in Crore)

 

Revenue Bifurcation

Below is the revenue breakdown for various activities.

(Amount in million)

 

 

State-wise Revenue Bifurcation 

(Values in millions)

 

 The Objective of the Issue

The company desires to use the Net Proceeds from the Issue to fulfill its following goals:

• Payback or prepayment, in whole or in part, of some loans taken out by the business.

• Financing the business's needs for working capital.

• Corporate Purposes.

 

Peers of Deepak Builders & Engineers Ltd.

Evaluation

Deepak Builders IPO price is between Rs.192 to Rs.203 for each Share.

Evaluation of P/E Ratio

Considering the period of FY 2024, with an EPS of Rs.16.84 from the last year, the resulting P/E ratio is 12.05x.

Considering the weighted EPS of Rs.11.23 for the last three years, the P/E ratio is 18.07x.

Comparative Analysis with Listed Peers

The average P/E Ratio of the industry is 25.03x.

 

In simple words, the P/E ratio of this IPO (12.05x), compared with the industry’s average P/E of 25.03x, has an undervaluation (on a P/E ratio basis only). Hence the price of the Share seems fully priced for the investors when considered based on the average P/E ratio of the industry.

 

IPO's Strengths 

• A well-established presence and track record.

• Good order book with a clientele of government agencies.

• Robust financial results.

• Seasoned marketers with a solid foundation in senior management.

IPO’s Weaknesses 

• The majority of revenue comes from projects that are granted or carried out by government, semi-government, and government-controlled organizations. Any unfavorable modifications to government regulations could result in the foreclosure or termination of its contracts.

• Several large-scale projects make up the majority of the portfolio of projects. Any obstacle or delay with these initiatives could negatively affect its financial situation.

• Since Punjab has historically accounted for a large portion of its project portfolio, any modifications to the region's laws, policies, or another political and economic climate could harm its operations, finances, and business.

 

Deepak Builders IPO GMP 

Deepak Builders IPO GMP today is Rs.27 as of 17 October 2024. With a price of Rs.203 per Share, the estimated IPO listing price is Rs.230 when writing this information.

 

Deepak Builders & Engineers IPO Timetable (Tentative)

The IPO open date is from October 21 to October 23, 2024, with IPO allotment on October 24, 2024, refund initiation on October 25, 2024, and listing on Monday, October 28, 2024.

 

Deepak Builders & Engineers IPO Details

Deepak Builders & Engineers IPO lot size and price

The IPO allows retail investors to invest in a minimum and maximum of 1 Lot (73 Shares) amounting to Rs.14,819 and 13 Lots (949 Shares) amounting to Rs.1,92,647 respectively, while for HNI investors, the minimum Lot is 14 (1,022 Shares) amounting to Rs.2,07,466.

Deepak Builders & Engineers IPO Reservation

Promoters and Management of Deepak Builders & Engineers Ltd. 

• Deepak Kumar Singal

• Sunita Singal

Deepak Builders & Engineers IPO Lead Managers

• FedEx Securities Pvt Ltd.

 

Dividend Policy

The company has not paid any dividends in the last five fiscals.

 

Conclusion

While the project portfolio and financial performance of Deepak Builders & Engineers Ltd. are strong, they heavily rely on government contract contracts, which carries a significant risk. The issue may be in high demand from investors looking to expand in the construction industry because of its competitive PE ratio when compared to its peers. However, government initiatives and a concentration on particular fields could lead to instability and long-term dependency.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

To Read the Prospectus of the Company Click Here to Download the DRHP.

DISCLAIMER: The content is purely for educational and information purposes only. We do NOT encourage/advise/suggest our active readers to be involved in any kind of buying or selling securities activities. Always consult your eligible financial advisor for investment-related decisions. The author does NOT through this blog intend to involve readers in trading.  

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