Management

• Rakesh Ashok Markhedkar (Chairman and Managing Director)
• Avinash Ashok Markhedkar (Whole-Time Director)
• Nakul Markhedkar (Whole-Time Director)
• Rakesh Kumar Sharma (Independent Director)
• Arun Bhagwan Unhale (Independent Director)
• Priti Paras Savla (Independent Director)
• Dibyendu Ray (Chief Operating Officer)
• Kajal Sagar Rakholiya (Company Secretary and Compliance Officer)
• Ashish Bahety (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 772cr, which comprises of fresh issue of Rs. 721cr and offer for sale (OFS) component of Rs. 51cr. The company intends to utilize Net Proceeds towards funding working capital requirements of the company (Rs.541cr) and general corporate purposes.

Competitive Strengths

Strong Growth, Diversified Presence, and Robust Order Book Vikran Engineering Limited has established itself as one of India’s fast-growing EPC players, with revenue rising at a CAGR of 32.2% from Rs.524.30 cr in FY23 to Rs.915.85 cr in FY25. The company provides integrated turnkey EPC solutions across power, solar, water, and railway infrastructure, leveraging in-house design, engineering, and timely execution capabilities. By June 30, 2025, it had completed 45 projects across 14 states worth Rs. 1,919.92 cr and held 44 ongoing projects across 16 states with an order book of Rs. 5,120.21 cr, of which Rs. 2,442.44 cr is unexecuted. Vikran has built 10 EHV substations up to 765 kV and executed rural electrification projects under schemes like Saubhagya and DDUGJY. With Rs. 747.78 cr in water projects under Jal Jeevan Mission, the company is well-positioned to benefit from strong government-led infrastructure spending in the power and water sectors.

Pan-India Presence with Robust Supply Chain Network Vikran Engineering Limited has built a strong pan-India presence, having executed projects across 22 states and currently managing operations in 16 states. As of June 30, 2025, the company operates through 190 sites and store locations, enabling localized execution, faster response times, and enhanced customer satisfaction. Its client base includes marquee names such as NTPC, Transmission Corporation of Telangana, Madhya Pradesh Power Transmission Company, and South Bihar Power Distribution Company. To ensure seamless execution, Vikran has cultivated long-standing relationships with over 3,500 suppliers and service providers across multiple states over the past three fiscal years. This diversified supply chain mitigates dependency risks, supports efficient procurement of raw materials and equipment, and enhances project delivery timelines. By leveraging geographical reach and supply chain depth, the company ensures high-quality, timely, and cost-efficient execution across varied EPC projects.

Asset-Light Model Driving Capital Efficiency Vikran Engineering Limited operates on an asset-light business model, executing projects with minimal investment in fixed assets. Instead of owning heavy equipment, the company rents machinery from third-party lessors across states, ensuring flexibility and cost efficiency. This approach significantly reduces fixed costs and logistical burdens, allowing the management team to focus on core business areas such as project execution and client management. The model also enables the company to scale operations up or down quickly in line with project requirements, without being constrained by asset ownership. As a result, Vikran has delivered strong capital efficiency, with fixed asset turnover improving from 57.38 in FY23 to 91.00 in FY24 and further to 101.27 in FY25. This strategy not only supports profitability but also ensures optimal utilization of capital while maintaining operational agility.

Strong In-house Engineering, Process Control, and Quality Systems The company executes its EPC business through an integrated in-house model, enabling end-to-end delivery from conceptualization to project completion. The company employs a team of 12 designers and engineers with cumulative experience of over 93 years, supported by on-ground technical staff to ensure customized solutions across business verticals. Dedicated design and engineering teams oversee timely execution in line with quality standards, helping capture greater value across the EPC chain. A centralized project monitoring and control group (CPMG) of five members supervises project progress, financial controls, and milestone tracking through regular review mechanisms. Reinforcing its quality framework, Vikran holds ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certifications, reflecting adherence to global standards in quality, environment, and safety. Internal audits, inspections, and raw material quality checks further strengthen its project assurance and operational credibility.

Peer Comparison

Key Risks & Concerns

High Dependence on Working Capital and Receivables Vikran Engineering’s business is highly working-capital intensive, with trade receivables, contract assets, and inventories accounting for over 83–86% of total assets in FY23–25. Any mismanagement of inventory or delays in project execution could lead to excess stock, higher work-in-progress, and cash flow strain. Further, ineffective credit assessment of customers may result in bad debts or delayed recoveries, creating liquidity pressure and increasing reliance on borrowings, thereby adversely impacting profitability.

Decline in New Order Inflow Vikran Engineering’s new order inflow has contracted sharply, falling from Rs. 2,171.23 cr in FY23 to Rs. 700.93 cr in FY25, mainly due to fewer government projects and selective bidding in water and railway infrastructure. Consequently, the order book-to-revenue ratio dropped from 390% in FY23 to 223% in FY25. This decline raises concerns over future revenue visibility and growth prospects, creating uncertainty in scaling operations and potentially impacting the company’s long-term financial performance.

Litigation Risk from Railway Ban Order In July 2024, the Railway Board ordered a two-year ban on Vikran Engineering for alleged integrity breaches and illegal gratification linked to a railway electrification contract. Although the Delhi High Court has stayed the order, the case remains under litigation with the next hearing in September 2025. An adverse outcome could lead to a ban on future railway projects, reputational damage, higher legal costs, and financial liabilities, potentially impacting the company’s operations and growth prospects.

Outlook and Valuation

Vikran Engineering Limited has established itself as one of India’s fast-growing EPC players, with revenues rising at a CAGR of 32.2% between FY23–FY25. The company has built strong execution capabilities across power transmission & distribution, water infrastructure, and emerging sectors such as solar EPC and railways. As of June 30, 2025, it has successfully delivered 45 projects across 14 states, with an ongoing order book of Rs. 5,120.21 cr spread across 16 states. Vikran’s business model is supported by in-house technical expertise, process controls, an asset-light approach, and a pan-India supply chain of over 3,500 suppliers, helping ensure efficient project delivery. These structural advantages, combined with certifications in quality, environmental, and occupational standards, provide it a strong foundation for scaling operations further.

Looking ahead, the company is selectively expanding its geographical footprint beyond India into the Middle East and Africa, regions with significant power infrastructure demand. Domestically, it aims to diversify into high-growth EPC verticals such as metros, high-speed rail, irrigation, and solar PV, complementing its strong presence in T&D and water infrastructure. With metro investments projected at Rs. 1.5–1.7 trillion and large allocations under Jal Jeevan Mission, RDSS, and irrigation schemes, Vikran is well positioned to benefit from policy tailwinds. Its entry into renewable EPC projects up to 100 MWp and balance-of-system contracts up to 300 MWp offers long-term growth visibility while reducing dependency on traditional sectors. At the same time, strong government focus on rural electrification, clean energy, and large-scale infrastructure upgrades enhances the addressable market for Vikran’s integrated EPC offerings.

The size of the IPO is Rs 772 crore, with Rs 721 crore being raised through a new issue. Alongside pre-IPO placements, the company aims to increase its working capital base to approximately Rs 800–850 crore, which is nearly threefold its current size. This is essential as EPC businesses require significant working capital. For VEL, each rupee allocated to working capital can potentially yield 2-3 times that amount in revenue. VEL's current order book is 2442 cr, which is 2.5 times its annual revenue. Its robust order book provides good revenue visibility. Investor must monitor ongoing litigation linked to an alleged railway contract breach, though currently stayed by the Delhi High Court, that poses reputational and regulatory risks. Nonetheless, Vikran’s strong execution record, diversified sectoral exposure, and alignment with government priorities provide a supportive platform for sustainable growth. If it can strengthen order inflows and manage working capital effectively, the company appears well placed to capitalize on India’s infrastructure build-out and emerging global opportunities. Vikran Engineering is currently valued at a PE multiple of 32x FY25 earnings, which looks reasonable. We recommend a SUBSCRIBE rating for the issue.