Incorporated in 2017, Deepak Builders and Engineers India Limited is an integrated engineering and construction company. It encompasses two business verticals - construction projects and infrastructure projects.
Under construction projects, it is involved in the execution and construction of administrative & institutional buildings, hospitals and medical colleges, industrial buildings, historical memorial complexes, stadiums and sports complexes. On the other hand, it undertakes specialised structural work such as flyovers, rail under bridges, rail over bridges, approach roads and development and redevelopment of railway stations under its infrastructure projects.
It is present across four states and 2 union territories in India, namely - Punjab, Haryana, Rajasthan, Uttarakhand, Chandigarh and the National Capital Territory of Delhi. Recently, it was awarded its first contract for the construction of plant building by Indian Oil Corporation Limited in Panipat, Haryana, with a contract value amounting to ₹532 crore.
Since acquiring business from the erstwhile firm, the company has completed 17 projects, including the construction of Jang-E-Azadi Memorial in Jalandhar, the development of Karuna Sagar Maharishi Valmiki Tirath Asthaan in Amritsar, the construction of the Geriatrics Block in AIIMS Campus, New Delhi, and the construction of a super speciality block at Government Medical College, Patiala.
Currently, it has 12 ongoing projects totalling an order book of ₹1,380 crore as of 30 June 2024.
For backward integration purposes, the company set up ready-mix concrete (RMC) plants at different locations. It helps with the timely execution of projects and reduces the cost of procurement for construction requirements like steel, cement, sand, and aggregates.
Between FY22 and FY24, it saw a CAGR rise of 12% in its revenue from operations and 50% in its profit. Moreover, India’s construction industry is expected to reach $1.4 trillion by 2025, accounting for 8% % to 10% of the country’s GDP. This rapid growth in the construction industry will bring new order-win opportunities, which could indirectly benefit the company.
And now, Deepak Builders and Engineers India Limited is coming out with its initial public offer (IPO). The total IPO issue size is ₹260.04 crore, comprising fresh issue, aggregating to ₹217.21 crore, and an offer for sale, aggregating to ₹42.83 crore. The money raised from the fresh issue will be utilised to repay borrowings, working capital requirements and general corporate purposes. Its shares will be listed on the NSE and BSE.
Here are key details about the Deepak Builders and Engineers India IPO:
| Company Name | Deepak Builders and Engineers India Limited |
|---|---|
| Company Type | Private |
| Company Established | 2017 |
| Deepak Builders and Engineers India IPO Open Date | 21st October 2024 |
| Deepak Builders and Engineers India IPO Close Date | 23rd October 2024 |
| Deepak Builders and Engineers India IPO Allotment Status | 24th October 2024 |
| Credit of Shares to Demat | 25th October 2024 |
| Deepak Builders and Engineers India IPO Listing Date | 28th October 2024 |
| Deepak Builders and Engineers India IPO Face Value | ₹10 per share |
| Deepak Builders and Engineers India IPO Lot size | 73 shares |
| Deepak Builders and Engineers India IPO Issue Size | Approx ₹260 crore |
| Deepak Builders and Engineers India IPO Listed at | BSE, NSE |
| Deepak Builders and Engineers India IPO Price | ₹192 – ₹203 per share |
Financial snapshot
| ₹ crore | FY22 | FY23 | FY24 | Q1 FY25 |
|---|---|---|---|---|
| Income | 363 | 433 | 511 | 105 |
| Net profit | 17.6 | 21.3 | 60.4 | 14.2 |
Strengths
- Decent order book with a marquee client base consisting of government, semi-government and government-controlled entities.
- The company continuously focused on equipment ownership. As of 30 June 2024, it owned and maintained 398 major equipment and machines, including a concrete mixer, boom pump, transit mixer, JCBs, roller, mobile tower crane, and containers.
- Strong financial performance with EBITDA margins of 12%, 12%, and 22% in FY22, FY23, and FY24, respectively.
- The workforce consists of 632 full-time employees as of 30 June 2024.
- Major clients include PWD Punjab, PWD Haryana, PWD Uttarakhand, WAPCOS, NPCCL, HSCC, IOCL, Greater Mohali Area Development Authority, Punjab, Ludhiana Smart City Limited, Punjab Cricket Association and Punjab Heritage and Tourism Promotion Board.
- Experience in executing projects with varying degrees of complexities, such as design engineering and construction of 3D Domes.
Risks and threats
- Any adverse changes in government policies can adversely affect its business, as 92% of its revenue from operations comes from projects for government entities as of FY24.
- Even though it has recently experienced growth in its EBITDA and PAT margin, they have historically been below 12% and 5%, respectively.
- Has sustained negative cash flows from operating activities in the past, amassing to ₹26.8 crore in FY24.
- Construction work is subject to seasonal variations and may not be able to accurately forecast its project schedule.
- Business is working capital intensive with long implementation periods and has total outstanding borrowings of ₹463 crore as of 30 June 2024.
- Its credit rating was downgraded in FY21.
- Operates in the construction industry with low entry barriers and high competition.
You can now apply for theDeepak Builders and Engineers India IPO on Upstox. Click here.