Deepak Builders & Engineers IPO Opens Monday: Grey Market Premium Soars 23%! Key Details Inside

The Initial Public Offering (IPO) for engineering and construction company Deepak Builders and Engineers will be open for subscription on October 21. The company’s shares are currently trading at a 23% premium in the grey market, with a grey market premium (GMP) of ₹50 per share.

Key IPO Details

The price range for the shares is set between ₹192 to ₹203 per share. The IPO will involve a fresh equity issue of ₹217 crore and an Offer for Sale (OFS) of 21 lakh shares.

• Allocation of shares: 50% of the offer is reserved for qualified institutional buyers, 35% for retail investors, and 15% for non-institutional investors.
• Bid lots: Investors can bid for 73 shares per lot and in multiples thereafter.

Fund Utilisation

The company plans to use ₹95 crore from the IPO for working capital and ₹30 crore to pay off debts. The rest will be used for general corporate purposes, according to the draft papers.

Company Overview

Deepak Builders is a well-established engineering and construction company that specialises in various types of projects. These include administrative and institutional buildings, hospitals, medical colleges, industrial complexes, historical memorials, stadiums, and residential buildings.

The company has also expanded into specialised structural work, such as flyovers, roads, rail underpasses and overpasses, and railway station development.

Revenue Streams

Deepak Builders operates both fixed-price turnkey projects and item-rate contracts, which contribute significantly to its revenue:

• EPC projects: 45% of revenue
• Item-rate/percentage projects: 30% of revenue
• Sale of construction products: 25% of revenue

Financial Performance

In the financial year 2024 (FY24), the company reported a revenue of ₹511 crore, an increase from ₹433 crore the previous year. Its net profit after tax more than doubled to ₹60.4 crore.

Fedex Securities is the sole book-running lead manager for this IPO.