Deepak Builders & Engineers IPO

Deepak Builders & Engineers India Limited, established in September 2017, is a prominent integrated engineering and construction firm specializing in a diverse range of projects categorized into Construction and Infrastructure Projects. Their construction portfolio includes administrative buildings, hospitals, industrial complexes, and residential developments, while their infrastructure projects focus on specialized structures such as flyovers and railway station redevelopment. Operating across Punjab, Haryana, Rajasthan, Uttarakhand, and two Union Territories, the company offers Engineering, Procurement, and Construction (EPC) services on both fixed-sum turnkey and item-rate bases.

The company has built a strong reputation for executing turnkey projects encompassing various engineering disciplines, including civil works and mechanical, electrical, and plumbing (MEP) systems. With a robust order book valued at ₹12,115.68 million as of February 29, 2024, Deepak Builders has successfully completed notable projects like the Jang-E-Azadi Memorial. Accredited as a Class I – (Super) Contractor with the Central Public Works Department, the firm is pre-qualified to bid for projects up to ₹6,500 million.

Deepak Builders & Engineers IPO Strengths

• Deepak Builders and Engineers India Limited has completed 76 construction and infrastructure projects since its inception, establishing a strong market presence.
• Accredited as a Class I – (Super) Contractor, the company can independently bid for projects up to ₹6,500 million, reflecting its substantial government clientele.
• The company owns 397 major construction machines as of February 2024, ensuring reduced reliance on external providers and efficient project execution.
• Between FY 2021 and 2023, Deepak Builders showcased robust growth, with revenues increasing at a CAGR of 19.81%, and maintaining solid year-on-year profitability.

Deepak Builders & Engineers IPO Risks

• Deepak Builders and Engineers India Limited faces risks from its dependency on government contracts. Any policy changes can terminate or delay projects, impacting financial results significantly.
• Concentration on large-scale projects poses a risk; delays or complications could significantly affect the company’s financial health due to the potential for cost overruns and reduced profitability.
• Geographical concentration in Punjab exposes the company to regional policy changes, economic fluctuations, and potential project interruptions, which could adversely affect operations and earnings.
• Revenue reliance on a few key clients increases vulnerability; loss or reduction in business from these clients could lead to significant financial instability and impact future growth prospects.