Vikran Engineering IPO Review 2025: Should You Invest? Full Business, Financials & Risks Analysis

If you're tracking the latest happenings in the IPO market, Vikran Engineering Limited is a name you can't miss right now. This fast-growing company operates at the heart of India's infrastructure push, working across power transmission, water supply, and rail electrification. With its IPO coming up, there’s a lot of buzz and plenty of data to break down. Here you'll find the IPO facts, business strengths, financials, comparisons with rivals, risks, and my thoughts on investor interest—all in one spot.

Let’s break it down, so you can make a smart, informed decision.

Vikran Engineering IPO at a Glance

Vikran Engineering Limited is gearing up to tap the market with a public issue that has caught the attention of investors interested in infrastructure and government-heavy contracts. Here’s a summary for quick reference:

IPO Fact	Details
IPO Size	₹772 crore
Fresh Issue	₹721 crore
Offer for Sale	₹51 crore (promoter dilution)
Price Band	₹92 to ₹97 per share
Bid Dates	August 26 to August 29, 2025
Lot Size	148 shares
Min Investment (₹92)	₹13,616
Min Investment (₹97)	₹14,356
Allotment Date	September 1, 2025
Listing Date	September 3, 2025

Vikran Engineering’s core business:

• End-to-end execution of infrastructure projects in power transmission and distribution
• Strong presence in water infrastructure (surface/underground supply, rainwater harvesting)
• Railway infrastructure, including railway electrification

Everything about this IPO points to a company deeply involved in sectors where government spending is rising.

Detailed IPO Information

Issue Size and Components

Vikran Engineering is raising ₹772 crore through its IPO. Of this:

• ₹721 crore will be new shares issued by the company
• ₹51 crore comes via an offer for sale from promoter Rakesh Ashok Markhedkar

Price Band and Lot Size

The issue is priced in a narrow band of ₹92 to ₹97 per share. The minimum bid is 148 shares, so the starting investment is:

• At ₹92: ₹13,616
• At ₹97: ₹14,356

Important Dates

• Bid Period: August 26 to August 29, 2025
• Allotment: September 1, 2025
• Likely Listing: September 3, 2025

Use of IPO Proceeds

The company says it will direct ₹541 crore towards working capital needs. The balance will go to general corporate purposes, keeping Vikran nimble as it bids for new projects.

Business Overview of Vikran Engineering

Company Profile

Vikran Engineering positions itself as a fast-growing Indian EPC (Engineering, Procurement, and Construction) company focused on infrastructure. What sets the business apart is its turnkey capability—the ability to take projects from planning all the way to installation, testing, and commissioning. This end-to-end control makes for better project outcomes and, often, happier clients.

Key Business Verticals

• Power Transmission & Distribution:

  • Projects in high-voltage transmission lines (up to 765 kV)
  • Construction of substations (up to 400 kV)
  • Experience with rural electrification under schemes like Rajiv Gandhi Grameen Vidyutikaran Yojana, DDUGJY, and Saubhagya

• Water Infrastructure:

  • Surface and underground drinking water projects
  • Design and implementation of water distribution and rainwater harvesting systems
  • Involvement in the Jal Jeevan Mission

• Railway Infrastructure:

  • Work on overhead railway electrification and traction substations

Client Segments

The company's clients include:

• Government agencies
• Public sector undertakings
• Private companies

Having this spread reduces reliance on any single project or sector, at least in theory.

Industry Context and Growth Drivers

Vikran Engineering benefits from major trends:

• Power Sector: The Electricity Act allowed private companies to participate in transmission through competitive bidding. India is one of the few markets globally where power transmission is truly open, drawing investment and competition.
• Water Sector: Over 80% of investments in water supply and wastewater management projects in India use the EPC (turnkey) route. This offers companies like Vikran a lot of room to scale.
• Railway Sector: The National Rail Plan for 2030 aims to modernize Indian Railways, targeting a 45% freight share for rail. This requires serious electrification and logistics upgrades.

All three areas are on the government’s radar, and public spending is flowing in to boost infrastructure.

Geographical Footprint and Project Execution

Vikran Engineering isn’t just a one-region wonder. The company has completed jobs in 22 states and is currently handling projects in 16. With 190 project sites and stores in action all over the country, they’ve built a network that can deliver projects promptly and manage risk even if issues pop up in one market or state.

Strengths of Vikran Engineering

Vikran has several strengths that make it stand out among mid-sized EPC players.

Strong and Diversified Execution Capability

• Revenue CAGR of 32.17% from FY23 to FY25—this is well above the industry average.
• 45 projects completed by June 2025, worth ₹199.91 crore, showing both ability and experience.
• Order book of ₹2442.44 crore as of June 2025 secures future revenues and is a strong indicator of growth momentum.

Diversified Order Book Across Sectors

• Power accounts for 60.53% of the order book, while water brings in 37.4%.
• This spread means the company isn’t overly dependent on any one vertical. If regulations or funding slows in any segment, they aren't caught off guard.

Pan-India Presence

With projects in 16 states and operations across 190 locations, Vikran can handle large, complex contracts and respond quickly to regional opportunities.

Asset-Light Business Model

Rather than buying equipment, Vikran leases it. The result: lower fixed costs and a fixed assets turnover ratio that has jumped from 57.38 (FY23) to 111.27 (FY25). They get more output from less capital tied up, which boosts profit margins.

In-House Technical Teams

Having 12 experienced designers on the team gives them an edge. These specialists oversee projects from start to finish, ensuring quality and timely delivery.

Experienced Management Team

• Rakesh Ashok Markhedkar (promoter, chairman, managing director) brings 34 years of EPC experience.
• Director Avinash Ashok Markhedkar has 33 years, and whole-time director Nakul Markhedkar brings 9 years to the table.
• This deep-sector knowledge helps Vikran make strategic calls and execute efficiently.

Management’s focus and hands-on industry experience have been key to the company’s fast pace and growing reputation.

Risks and Weaknesses

It’s not all smooth sailing for Vikran Engineering. Investors should weigh these key risks carefully.

Dependence on Competitive Bidding

The company’s revenue pipeline relies on winning competitive bidding for new contracts. Failure to qualify or win contracts in the future could directly impact revenue and growth prospects.

Regulatory Risk: Railway Ban

In July 2024, the Railway Board issued a two-year ban against Vikran Engineering. The Delhi High Court granted a stay in August 2024, but the legal process is ongoing with the next hearing in September 2025.

If the outcome doesn’t go Vikran’s way, there could be fallout for reputation and business development, especially in the rail sector.

High Working Capital Intensity

At the end of March 2025, the company’s working capital stood at ₹680.22 crore, which is about 50% of total assets. Delays in receiving payments, or poor recovery of receivables, could tighten liquidity.

Declining Order Book Size

The size of the order book in FY25 is lower than in FY24. This trend could hit future revenue, especially if new contracts slow down.

Concentration on Top Customers

There’s risk from relying on a few clients:

• Top 5 customers contributed 69.48% of FY25 revenue and 56.15% of the order book.
• Top 10 customers made up 88.08% of revenue and 82.41% of orders.

If relationships sour or projects get canceled, the impact will be felt.

Low Debt Service Coverage Ratio (DSCR)

DSCR has been below 1.0 for three years (0.48 in FY25), which could make it harder to take on new debt or refinance borrowings.

Key Risks Recap

1. Uncertainty about new orders due to competitive bidding
2. Pending litigation with Indian Railways
3. Heavy working capital demands and negative operating cash flows
4. Revenue concentrated among a handful of clients
5. Potential for tighter margins or liquidity squeeze if collections lag
6. Weak DSCR and rising borrowing cost risk

These aren’t small issues. Anyone considering investment needs to keep them in mind.

Financial Performance Analysis

To really understand a company, you have to check its financial foundation.

Revenue Growth

Vikran Engineering has delivered 32.17% CAGR revenue growth from FY23 to FY25, with 16.53% growth year over year from FY24 to FY25. This was driven by an increase in EPC service income, thanks to more (and bigger) projects being awarded.

Operational Efficiency Metrics

The fixed assets turnover ratio climbed from 57.38 (FY23) to 91 (FY24), then to an impressive 111.27 (FY25). This means Vikran is squeezing more revenue out of each rupee spent on assets, thanks to its leasing and asset-light model.

The inventory turnover ratio hovered near 11-12, reflecting efficient use of materials and tight project execution cycles.

Profitability Trends

• EBITDA: Rose from ₹79.7 crore (FY23) to ₹160.24 crore (FY25). CAGR of 41.78%.
• EBITDA margin: Improved to 17.5% in FY25, reflecting growing operational efficiency.
• PAT (Profit After Tax): Grew from ₹42.84 crore (FY23) to ₹77.82 crore (FY25) (CAGR 34.78%). Profit margin for FY25 stood at 8.44%, a dip from the prior year due to rising material and finance costs.

Return Ratios

• ROE: Dropped to 16.63% in FY25 (from 25.69% in FY24), impacted by new equity raised through private placements and bonus shares.
• ROCE: Fell to 23.34% in FY25 from 30.43% in FY24.

Debt and Capital Structure

• Borrowings: Increased from ₹154.93 crore (FY23) to ₹272.94 crore (FY25).
• Debt-to-equity ratio: Improved to 0.58 (from 1.18) due to fresh equity infusion.

Cash Flow Analysis

• Operating cash flow: Negative in FY24 and FY25, reflecting money tied up in working capital as project activity soared.
• Investing cash flow: Negative due to asset purchases and expansion.
• Financing cash flow: Positive, thanks to fresh loans and equity coming in.

Vikran shows high revenue growth and margins, but the business model requires constant cash infusions—something to watch if market or project cycles slow.

Peer Comparison and Industry Positioning

Let’s see how Vikran stacks up against listed EPC and infrastructure peers.

Company	FY25 Revenue (₹ Cr)	EBITDA Margin	PAT Margin	Order Book (₹ Cr)	Fixed Asset Turnover	Inventory Turnover	ROCE (%)	ROE (%)	Debt/Equity	PE Ratio
SPML Infra	770	Lower	Lower	Higher	Highest	15.16	Lower	Lower	Higher	Lower
Kalpataru	Higher	Lower	Lower	Higher	Lower	Higher	Lower	Lower	Higher	Lower
KEC International	Higher	Lower	Lower	Higher	Lower	Higher	Lower	Lower	Higher	Lower
Techno Electric	Lower	Lower	Lower	Higher	Lower	134.57	Lower	Lower	Lower	Lower
Bajel Projects	Higher	Lower	Lower	Higher	Lower	17.33	Lower	Lower	Lower	Lower
Vikran Engineering	96	17.5%	8.44%	Lower	111.27	11.64	23.34	16.63	0.58	32.15

Key takeaways:

• Vikran’s EBITDA margin is the best among the group, highlighting strong project efficiency.
• PAT margin is also strong, indicating the company keeps more of its earnings after costs.
• Scale is smaller than giants like Kalpataru and KEC, meaning it faces stiffer challenges building up to larger, more lucrative projects.
• Order book is the smallest, raising questions about near-term growth once the pipeline dries up without replacements.
• Operational ratios (fixed asset and inventory turnover) are solid, but inventory turnover leaves some room to improve.
• ROCE and ROE are above most rivals, suggesting strong capital management, although recent equity raises distort this a bit.
• PE ratio of 32.15 is not excessive considering growth, but investors must weigh company size and risks.

Grey Market Premium (GMP) and Market Sentiment

Vikran Engineering’s IPO is already enjoying some positive sentiment in the grey market. The GMP currently signals there’s speculative interest. Still, GMP can be fickle—it’s driven more by rumor and trader action than fundamentals.

Remember:

• GMP isn’t an official indicator and doesn’t guarantee profit on listing day.
• Final listing price will depend on deeper factors: subscription strength, company fundamentals, broader market conditions.

Grey Market Premium (GMP): What It Means

GMP reflects speculative demand among traders before listing. Use it as a sentiment tracker but don't base major investment decisions on it.

Analyst Recommendations and Market Outlook

Analysts are split, but mostly positive, while highlighting risks.

• Canara Bank Securities: Subscribe for investors with high risk appetite, given strong financials and fair valuation
• Arihant Capital: Positive, citing growth potential, exposure to government infrastructure push
• SBI Securities: Neutral, watching post-listing performance

Analyst sentiment supports the case for investors with higher risk tolerance—especially those who understand the industry cycles.

Summary of Investment Considerations

Why I Find Vikran Engineering Interesting:

• Strong business model and leadership
• Outperformance in profitability and margins over larger peers
• Order book gives near-term revenue comfort
• Geographical and vertical diversification reduce single-point risk

Potential Red Flags:

• Heavy reliance on government contracts (vulnerable to policy or regulatory changes)
• Legal risk with Indian Railways could limit a key growth avenue
• Shrinking order book points to the need for new wins
• Negative cash flows and high working capital requirement

Pros and Cons for Investors

Pros:

• High revenue and profit growth rates
• Operational efficiency and asset-light model
• Management depth and EPC sector expertise
• Pan-India reach and diversified verticals

Cons:

• Legal uncertainties (Railway Board ban)
• Customer concentration
• Thin order book compared to most peers
• Ongoing need for external funding to fuel growth

Every investment comes with trade-offs. If your risk appetite is high and you believe in India’s infrastructure story, Vikran Engineering is worth watching.

Disclaimer and Investor Advisory Note

This post is for educational purposes only and is not an investment recommendation. Always do your research or consult a financial advisor before putting your money into any IPO or stock. The stock market carries risks, and you should read all relevant documents and disclosures carefully before investing.

For more details, you can browse the Vikran Engineering IPO red herring prospectus for their official numbers and risk disclosures.

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Happy investing!