Deepak Builders IPO: Strong GMP Potential for 15% Listing Gain

Deepak Builders IPO: The initial public offering (IPO) of Deepak Builders & Engineers India is scheduled to open on October 21. The grey market premium (GMP) for the shares is currently at ₹32, indicating a potential listing gain of 15.76%. The IPO consists of a fresh issue of 1.07 crore shares and an offer for sale of 21 lakh shares.

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Deepak Builders IPO: Strong GMP Potential for 15% Listing Gain Deepak Builders & Engineers India has raised Rs 78.01 crore from five institutional investors through an anchor book on October 18, ahead of its public offering set to open on October 21.

The company aims to raise Rs 260.04 crore through an initial public offering (IPO) at the upper end of its price band, which ranges from Rs 192 to Rs 203 per share. The IPO consists of a fresh issue of 1.07 crore equity shares valued at Rs 217.21 crore and an offer-for-sale of 21.1 lakh shares worth Rs 42.83 crore.

Promoter Deepak Kumar Singal and his wife, Sunita Singal, will be selling shareholders in the offer-for-sale.

In its filing to the exchanges on Friday, the Punjab-based construction company announced the allocation of 38,42,939 equity shares to anchor investors at Rs 203 per share.

Deepak Builders IPO: Strong GMP Potential for 15% Listing Gain Neomile Growth Fund was the largest investor, acquiring 14.77 lakh shares for Rs 30 crore, followed by Citadel Capital Fund, which purchased 9.85 lakh shares for Rs 20 crore. Other investors included Saint Capital Fund, Zeal Global Opportunities Fund, and Elite Capital Fund, who collectively invested Rs 28 crore for 13.8 lakh shares.

Deepak Builders plans to use Rs 30 crore of the fresh issue proceeds to repay debt, while Rs 111.96 crore will be allocated for working capital needs. The remaining funds from the IPO will be used for general corporate purposes. The company currently has 12 ongoing projects, including seven EPC projects and five item-rate or percentage rate contracts, with an order book of Rs 1,380.4 crore as of June 2024, of which 66% are from the railways sector.

 

Deepak Builders IPO: Strong GMP Potential for 15% Listing Gain Deepak Builders & Engineers India’s initial public offering (IPO) is scheduled to open next week on Monday, October 21, and will remain open until Wednesday, October 23. The issue has a price band of ₹192 to ₹203 per share and consists of a fresh issue of 1.07 crore shares along with an offer for sale (OFS) of 21 lakh shares, totaling 1,28,10,000 shares. Current grey market trends indicate the stock may debut at a premium, with the latest grey market premium (GMP) reported at ₹32.

As of around 11 AM on Friday, the GMP for Deepak Builders & Engineers stood at ₹32. Based on the upper price band of ₹203 and this GMP, the shares are expected to debut at ₹235, reflecting a premium of 15.76% over the issue price. The total size of the ₹260.04 crore IPO will be available for subscription from Monday, October 21, to Wednesday, October 23.

Retail investors can purchase a minimum of one lot, which comprises 73 shares. With the price band set between ₹192 and ₹203, the minimum investment required for one lot is approximately ₹14,819. Retail investors can apply for a maximum of 13 lots. The allocation of the net issue includes 35% reserved for retail investors, 15% for non-institutional investors (NIIs), and the remaining 50% for qualified institutional buyers (QIBs). Fedex Securities Pvt Ltd serves as the book-running lead manager, while Kfin Technologies Limited is the registrar for the IPO.

Deepak Builders IPO: Strong GMP Potential for 15% Listing Gain The company plans to finalize share allotments on Thursday, October 24, with successful bidders likely seeing the shares credited to their demat accounts on Friday, October 25. Those who do not receive allotments will receive refunds on the same day. Shares are expected to be listed on the BSE and NSE, tentatively on Monday, October 28.

Deepak Builders aims to raise approximately ₹217.21 crore through the fresh issue and intends to use the proceeds for debt repayment, working capital needs, and general corporate purposes. The company specializes in constructing administrative, institutional, and industrial buildings, hospitals, stadiums, residential complexes, and various other projects.

For FY22, FY23, and FY24, the company’s profit after tax was ₹17.66 crore, ₹21.4 crore, and ₹60.41 crore, respectively, while revenue for those fiscal years was ₹364.99 crore, ₹435.46 crore, and ₹516.74 crore, respectively.