Are you wondering whether to invest in the upcoming Deepak Builders & Engineers India Limited IPO?
With the IPO opening on October 21, 2024, and closing on October 23, 2024, this article offers an in-depth review, covering every essential aspect from IPO price band to allotment and listing details.
Let’s dive in and help you make an informed decision.
IPO Overview and Timeline
The Deepak Builders IPO aims to raise ₹260.04 crores through a book-built issue, comprising a fresh issue of ₹217.21 crores and an offer for sale (OFS) worth ₹42.83 crores. The IPO will be listed on both BSE and NSE, with its tentative listing date set for October 28, 2024.
Here’s a snapshot of key dates:
| Event | Date |
|---|---|
| IPO Open Date | October 21, 2024 |
| IPO Close Date | October 23, 2024 |
| Basis of Allotment | October 24, 2024 |
| Refund Initiation | October 25, 2024 |
| Shares Credited to Demat | October 25, 2024 |
| Listing Date | October 28, 2024 |
Also Read: Upcoming IPOs With Shareholder Quota in 2024
IPO Price Band and Lot Size
The Deepak Builders IPO Price band is set between ₹192 – ₹203 per share. Investors can bid for a minimum lot size of 73 shares, requiring an initial investment of approximately ₹14,819. For small HNIs (sNII), the minimum bid size is 1,022 shares (14 lots), amounting to ₹207,466, and for big HNIs (bNII), it goes up to 4,964 shares (68 lots) for ₹1,007,692.
Below is a breakdown of investment requirements:
| Investor Category | Minimum Shares | Amount (₹) |
|---|---|---|
| Retail Investors | 73 | 14,819 |
| Small HNIs (14 lots) | 1,022 | 207,466 |
| Big HNIs (68 lots) | 4,964 | 1,007,692 |
Company Background and Business Model
Founded in 2017, Deepak Builders specializes in constructing administrative buildings, hospitals, stadiums, and infrastructure projects across India. The company operates in three major verticals:
- Construction Projects
- Infrastructure Projects
- Sale of Products
Noteworthy projects include:
- Upgrading railway stations.
- Medical college construction.
- Heritage walk development at the Golden Temple Corridor in Amritsar.
As of June 2024, Deepak Builders manages 12 ongoing projects across Punjab, Haryana, Rajasthan, and Delhi, with a robust order book worth ₹13,803.89 million.
IPO Objectives
The Deepak Builders IPO aims to raise funds for the following purposes:
- Debt Repayment/Prepayment: Reduce outstanding borrowings.
- Working Capital Requirements: Enhance liquidity for ongoing projects.
- General Corporate Purposes: Support the company’s long-term strategy.
Allotment, Listing, and Shareholder Quota
The basis of allotment for Deepak Builders IPO will be finalized on October 24, 2024, and shares will be credited to investors’ demat accounts by October 25, 2024. Investors can check their Deepak Builders IPO allotment status online through Kfin Technologies, the IPO registrar.
Here’s a quick look at the shareholder quota distribution:
| Investor Category | Allocation (%) |
|---|---|
| Qualified Institutional Buyers (QIBs) | 50% |
| Retail Investors | 35% |
| Non-Institutional Investors (HNIs) | 15% |
Financial Performance
Deepak Builders has shown remarkable growth in recent years. Between FY2023 and FY2024, revenue surged by 19%, and profit after tax (PAT) grew by 182%, demonstrating the company’s ability to execute complex projects efficiently.
| Financial Year | Revenue (₹ Cr) | PAT (₹ Cr) | Net Worth (₹ Cr) |
|---|---|---|---|
| FY2022 | 364.99 | 17.66 | 70.34 |
| FY2023 | 435.46 | 21.4 | 89.35 |
| FY2024 | 516.74 | 60.41 | 141.25 |
| Q1 FY2025 | 106.34 | 14.21 | 155.81 |
Competitive Strengths
- Diverse Portfolio: Expertise in hospitals, administrative buildings, and rail projects.
- Modern Equipment Fleet: Ensures timely delivery of projects.
- Experienced Management Team: Led by Deepak Kumar Singal and Sunita Singal, the team boasts extensive experience in infrastructure development.
- Strong Order Book: A healthy pipeline of projects guarantees future growth.
Peer Comparison
Investors often compare an IPO with peers in the same industry to assess value. Below are key performance indicators for Deepak Builders:
| KPI | Value |
|---|---|
| ROE | 8.48% |
| ROCE | 8.97% |
| Debt-to-Equity | 0.91 |
| P/E Ratio | 16.63 (Post IPO) |
| PAT Margin (%) | 13.52% |
Deepak Builders IPO Subscription Status and GMP
Investors can monitor the Deepak Builders IPO subscription status in real-time on the stock exchanges. Additionally, tracking the Grey Market Premium (GMP) can provide insights into investor sentiment. Early indicators suggest positive demand, hinting at a strong IPO listing.
Should You Apply or Avoid?
Reasons to Apply
- Strong Financial Growth: Profit and revenue have grown consistently over the years.
- Diverse Project Portfolio: Involvement in high-profile infrastructure projects ensures steady demand.
- Listing on NSE and BSE: Dual listing increases liquidity potential.
Reasons to Avoid
- Valuation Concerns: With a post-IPO P/E ratio of 16.63, some may find it slightly overvalued.
- Industry Risks: The construction sector is sensitive to economic downturns.
Conclusion: Deepak Builders IPO – A Worthy Bet?
The Deepak Builders IPO offers a compelling opportunity for investors seeking exposure to the infrastructure and construction sector. While the IPO price today reflects robust demand, careful consideration of the company’s valuation and industry risks is necessary. For those with a long-term horizon, this IPO may prove to be a promising investment.
Disclaimer: This article is intended for informational purposes only. Always conduct thorough research or consult with a financial advisor before investing in any IPO.
Source: DRHP
