Vikran Engineering: A Promising IPO Backed by Notable Investors
Vikran Engineering, a rising player in the engineering sector, is making headlines as it prepares for its Initial Public Offering (IPO) set to open on Tuesday. The company has successfully raised ₹232 crore from a diverse group of anchor investors, setting the stage for its larger ₹772 crore IPO. This strategic move not only underscores the confidence investors have in Vikran Engineering but also highlights the growing interest in the Indian engineering sector.
Anchor Investor Participation
The company informed the exchanges that it has allotted 2,38,76,287 equity shares at ₹97 each to a consortium of 14 anchor investors. This anchor book is notable for its mix of domestic mutual funds, insurance companies, global fund houses, and alternative investment funds. Among the marquee participants are well-known names such as Nippon India Equity Opportunities Fund, 360 One Equity Opportunity Fund, Bank of India Mutual Fund, ITI Mutual Fund, SBI General Insurance, and Bengal Finance & Investments Pvt Ltd.
Domestic mutual funds have shown significant interest, collectively acquiring 87.63 lakh shares, which accounts for 36.7% of the total anchor allocation. This strong backing from institutional investors is a positive indicator for retail investors looking to participate in the IPO.
Pre-IPO Support and Strategic Backing
Before this IPO, Vikran Engineering had already secured substantial backing from The Wealth Company through the India Inflection Opportunity Fund, along with investments from prominent investors Ashish Kacholia and Mukul Aggarwal during a pre-IPO placement. This early support from influential figures in the investment community has bolstered the company’s credibility and market position.
IPO Structure and Use of Proceeds
The upcoming IPO consists of a fresh issue of ₹721 crore, equivalent to 7.43 crore shares, alongside an offer for sale amounting to ₹51 crore, which includes 52.57 lakh shares. At the upper end of the price band, which ranges from ₹92 to ₹97, the total offering is expected to raise ₹772 crore. The proceeds from this IPO will primarily be utilized to fund working capital requirements and for general corporate purposes, ensuring that the company is well-positioned for future growth.
Commitment to Shareholders
In a bid to enhance investor confidence, Vikran Engineering announced during its Annual General Meeting (AGM) on August 25 that it will distribute a 5% dividend on profits to equity shareholders. This commitment to returning value to shareholders is likely to attract more retail investors, further solidifying the company’s reputation as a reliable investment option.
Investment Opportunities
Investors interested in participating in the IPO can bid for a minimum of 148 shares, with the option to apply for additional shares in multiples thereafter. The allocation will be conducted through a book-building process, with 50% of the shares reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors. This structured allocation aims to ensure a balanced distribution of shares among different types of investors.
Conclusion
Vikran Engineering’s upcoming IPO represents a significant opportunity for investors, backed by a robust anchor investor base and a clear strategy for utilizing the proceeds. With the support of notable figures like Ashish Kacholia and Mukul Aggarwal, along with a commitment to shareholder returns, the company is poised for a successful market debut. As the IPO opens, all eyes will be on Vikran Engineering to see how it navigates this critical phase of its growth journey.
Pantomath Capital Advisors and Systematix Corporate Services are serving as the book-running lead managers for this promising issue, further enhancing its credibility in the market. As the engineering sector continues to evolve, Vikran Engineering stands out as a company to watch.