Deepak Builders & Engineers IPO listing on Monday; here’s what GMP signals | Stock Market News

The IPO of Deepak Builders & Engineers, which concluded recently, will see its shares debut on the Indian stock exchanges on Monday, October 28. As the Deepak Builders & Engineers IPO listing date approaches, investors’ focus has shifted to the potential listing gains, typically judged by looking at the grey market premium (GMP).

Ahead of the listing, the company’s shares are commanding a healthy GMP of ₹50, as per the market sources. Considering the IPO’s upper price band of ₹203 and the current grey market premium, the estimated listing price of Deepak Builders & Engineers stands at ₹253 apiece, 25% above the IPO price.

The grey market premium reflects investors’ willingness to pay more than the issue price.

The mainboard IPO, valued at ₹260 crore, was open for subscription from October 21 to October 23, 2024. It was priced in the range of ₹192 and ₹203. The shares are set to list on both BSE and NSE platforms.

The IPO was a combination of a fresh issue of 1.07 crore shares, aggregating to ₹217.21 crore, and an offer for sale of 0.21 crore shares worth ₹42.83 crore. The IPO attracted a healthy response from investors, achieving an overall subscription rate of 41.54 times.

Non-institutional investors’ portion was subscribed 82 times, while the retail investors’ portion was booked 39.79 times, and the qualified institutional buyers’ portion was subscribed 13.91 times, according to the exchange data.

The company proposes to utilise the net proceeds from the fresh issue for the repayment or prepayment, in full or in part, of certain borrowings, funding working capital requirements, and for general corporate purposes.

About Deepak Builders & Engineers

The company is an integrated engineering and construction company specialising in the execution and construction of various projects, including administrative and institutional buildings, hospitals and medical colleges, industrial buildings, historical memorial complexes, stadiums and sports complexes, residential complexes, and other developmental construction activities.

Currently, the company has eleven ongoing projects, which include six EPC (Engineering, Procurement, and Construction) projects and five item rate/percentage rate contracts. The company is accredited as a Class I (Super) Contractor by the Central Public Works Department, Government of India, and is pre-qualified to independently bid on single projects with a tender value of up to ₹6,500 million, as per the company’s DRHP report.

The order book at the end of February 2024 stood at ₹12,115.68 million. Of this, Northern Railways accounted for 52.51%, the industrial building project awarded by IOCL contributed 30.32%, and hospital and medical projects awarded by government-controlled entities collectively contributed 11.61%, the DRHP showed.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.