Deepak Builders and Engineers IPO: The initial public offering of construction company Deepak Builders and Engineers Ltd opened on Monday, October 21. The Rs 260-crore IPO has been fully subscribed within just one and a half hour of bidding, with the retail category receiving 1.81 times subscription till 11:35 am. The grey market activity also indicates a robust 30% gain for investors.
Till 11:35 am on the first day of bidding on Monday, the Deepak Builders and Engineers IPO received overall bids for 96,59,287 shares as against 89,67,061 shares on offer, a 1.08 times subscription.
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Its retail quota has been subscribed by 1.81 times so far, while its non-institutional investor (NII) category received a 0.81 times subscription.
Deepak Builders and Engineers IPO: Key Dates
The Deepak Builders and Engineers IPO will remain opened for public subscription between October 21 and October 23. The share allotment of the Deepak Builders and Engineers IPO will likely be finalised on October 24, while its shares will be listed on both BSE and NSE on October 28.
Deepak Builders and Engineers IPO: Price Band and Lot Size
The price band of the Rs 260.04-crore IPO has been fixed at Rs 192 to Rs 203 per share for the public issue.
Investors can bid for 73 shares in one lot and in multiples thereoff.
Deepak Builders and Engineers IPO: GMP Today
According to market observers, unlisted shares of Deepak Builders and Engineers Ltd are trading just Rs 60 higher in the grey market than its issue price. The Rs 60 grey market premium or GMP means the grey market is expecting a 29.56 per cent listing gain from the public issue.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Deepak Builders and Engineers IPO: Analysts’ Recommendations
Brokerages have given their ‘subscribe’ rating to the IPO. However, they also remain cautious of some risks.
Giving a ‘subscribe for long-term investment’ rating, brokerage firm Swastika Investmart said Deepak Builders is a growing engineering and construction company in northern India, with consistent growth in revenue and profitability. However, geographical concentration, high competition, and government dependence could pose risks.
The brokerage firm has recommended the IPO for long-term investors seeking exposure to the Indian construction sector, with careful due diligence.
Another brokerage firm BP Wealth in its IPO note also recommended to ‘subscribe for medium to long term’.
BP Wealth said Deepak Builders is well-positioned for future expansion with a proven track record of 76 completed projects and Class I (Super) Contractor accreditation.
“The current issue is priced at a P/E of 12.1x on the upper band based on FY24 earnings and is relatively lower than peers,” it said.
Deepak Builders and Engineers: More Details
The IPO is a combination of fresh issue of 1.07 crore shares aggregating to Rs 217.21 crore and an offer for sale of 0.21 crore shares aggregating to Rs 42.83 crore.
Deepak Builders & Engineers India Limited, which was incorporated in September 2017, is a construction company specialising in administrative, institutional, and industrial buildings, hospitals, stadiums, residential complexes, and other construction activities.
The company has completed turnkey projects encompassing architectural, structural, civil, MEP, firefighting systems, public health services, IT systems, operation theaters, medical gas pipelines, and landscaping.
Its revenue rose 19 per cent to Rs 516.74 crore and net profit increased by 182 per cent to Rs 60.41 crore in the financial year 2023-24.
Fedex Securities Pvt Ltd is the book running lead manager of the Deepak Builders & Engineers IPO, while Kfin Technologies Limited is the registrar for the issue.
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