Deepak Builders & Engineers IPO Day 3: Latest GMP and Subscription Status – Should You Apply?

The IPO of Deepak Builders & Engineers, which opened for subscription on Monday, October 21, is seeing strong interest from retail and non-institutional investors (NIIs). The ₹260.04 crore issue is priced between ₹192 and ₹203 per share. Today, October 23, is the last day for investors to subscribe.

The offer includes a fresh issue of 1.07 crore shares and an offer for sale (OFS) of 21 lakh shares. The company plans to use the proceeds to pay off debt, support working capital needs, and for general corporate purposes.

IPO Details

KFin Technologies is the registrar for the IPO, and Fedex Securities is the lead manager.

Grey Market Premium (GMP)

As per market sources, the stock’s latest grey market premium (GMP) is ₹62. Based on the upper price band of ₹203, the stock’s estimated listing price is ₹265, which reflects a premium of 30.54%.

Subscription Status

By 11:30 am on October 23 (the final subscription day), the IPO had been subscribed 18.10 times, receiving bids for 16.23 crore shares compared to the 89.67 lakh shares available.

• Retail investors: Subscribed 22 times (9.86 crore bids against 44.83 lakh shares offered)
• NIIs: Subscribed 31.67 times (6.08 crore bids against 19.21 lakh shares offered)
• Qualified Institutional Buyers (QIBs): Subscribed 1.12 times (28.61 lakh bids against 25.62 lakh shares offered)

Key Details

The IPO closes at 5 pm today. Investors can apply in lots, with one lot containing 73 shares.

• Share allotment: Expected on October 24
• Shares in demat accounts: Expected on October 25
• Stock market debut: Likely on October 28 on the BSE and NSE

Deepak Builders & Engineers specialises in constructing buildings, hospitals, stadiums, residential complexes, and other infrastructure projects.

Should You Apply?

Experts and brokerage firms are positive about this IPO due to the company’s potential in the fast-growing construction sector.

SMIFS Limited recommends subscribing to the IPO, noting that the company is set to benefit from India’s booming construction industry, projected to reach $1.4 trillion by 2025. The company’s plan to reduce debt by ₹30 crore will strengthen its financial position and lower interest costs, which could improve profits.

Akriti Mehrotra from StoxBox also advises subscribing, highlighting that the current issue is attractively priced compared to peers, with a P/E ratio of 12.1 times on the upper band. The company has a strong track record, having completed 76 projects and holding Class I (Super) Contractor accreditation.

In short, experts believe Deepak Builders & Engineers is a good long-term investment, thanks to its strong order book, growing margins, and solid growth potential.