The initial public offering (IPO) of Deepak Builders & Engineers India Limited has opened for subscription and is generating significant interest in the market. As of today, the Grey Market Premium (GMP) for the IPO stands at ₹60. Here’s a detailed overview of the IPO status, financial structure, and insights into whether investors should consider applying.
IPO Details and Subscription Status
Opening and Closing Dates
The Deepak Builders IPO opened for subscription on October 21, 2024, and will close on October 23, 2024.Fundraising Goal
Deepak Builders aims to raise approximately ₹260 crores through this IPO.Share Allocation
- Qualified Institutional Buyers (QIB): 50%
- Non-Institutional Investors (NII): 15%
- Retail Investors: 35%
As of today, the IPO has a GMP of ₹60, indicating a positive market sentiment. The subscription rates are expected to reflect strong demand as the bidding progresses. On Day 2, the IPO was subscribed approximately 9 times, with retail investors showing robust interest.
Latest Grey Market Premium (GMP)
The current GMP for Deepak Builders shares is ₹60, showcasing a favorable outlook for investors. The Kostak rate remains at ₹-, while the Subject to Sauda rate is set at ₹2,500. This premium suggests that there is considerable interest in the stock even before it officially lists.
Financial Structure of the IPO
The Deepak Builders IPO consists of:
- A fresh issue of equity shares totaling approximately ₹217.21 crores
- An offer for sale (OFS) of about ₹42.79 crores
The price band for the IPO is fixed between ₹192 and ₹203 per share, with a market lot consisting of 73 shares. The minimum investment required for retail investors is around ₹14,819.
Use of Proceeds
Proceeds from this IPO will primarily be used to fund various construction projects, including hospitals, medical colleges, and industrial buildings, thereby enhancing the company’s operational capabilities. With an order book valued at approximately ₹1,380.39 crores as of June 30, 2024, Deepak Builders is well-positioned to capitalize on ongoing government initiatives like Gati Shakti and Bharatmala.
Upcoming Dates
Key upcoming dates related to the Deepak Builders IPO include:
- Allotment Date: Expected on October 24, 2024
- Refunds Initiated: October 25, 2024
- Credit to Demat Account: October 25, 2024
- IPO Listing Date: Tentatively set for October 28, 2024
Company Background
Established in 2017, Deepak Builders & Engineers India Limited specializes in engineering and construction services. The company has focused on constructing a diverse range of projects including hospitals, administrative buildings, and industrial facilities. With a growing project portfolio that includes twelve diverse construction and infrastructure projects, Deepak Builders aims to enhance its market presence.In FY24, the company demonstrated impressive financial performance with revenue from operations rising to approximately ₹511.4 crores, achieving a Compound Annual Growth Rate (CAGR) of 18.69%. The profit after tax (PAT) surged to around ₹60.41 crores, reflecting a remarkable CAGR of 84.93%.
Should I Apply?
Analysts recommend considering an application for the Deepak Builders IPO based on its growth potential and market positioning.
Considerations for Investors:
- Short-term and Long-term Views: Investors may apply for both short-term gains due to high demand and long-term growth potential as the company expands its project portfolio.
- Market Sentiment: The positive GMP indicates strong investor confidence in Deepak Builders’ business model and future prospects.
Conclusion
In conclusion, potential investors should evaluate their investment strategies carefully while considering this IPO opportunity amidst favorable market conditions in the construction sector. The strong subscription rates reflect confidence in Deepak Builders’ ability to deliver value as it continues to grow its operations.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with certified financial advisors before making investment decisions as individual circumstances may vary.
