Deepak Builders and Engineers’ initial public offering (IPO) was oversubscribed within the first two hours on the opening day, driven primarily by demand from retail investors.
The Rs 260 crore IPO received bids worth Rs 182 crore as investors lapped up the issue. Retail investors subscribed 1.7 times their portion, putting in bids of Rs 155 crore. Non-institutional investors’ portion was booked 0.69 times with bids to the tune of Rs 27 crore. Qualified institutional buyers did not subscribe to their portion.
Deepak Builders is an infrastructure construction, engineering and procurement company with strong experience in varied sectors. It has an order book of Rs 1,500 crore providing revenue visibility. At the upper price band, it is valued at a price to earnings multiple of 15.6 with a return on networth of 52.9%.
The issue closed on October 23 after being open for three days. Shares are expected to list on October 28 on the NSE and BSE. Given the strong demand seen on day one, a healthy premium over the issue price on listing cannot be ruled out. Investors who believe in the long term prospects of the infrastructure sector could consider the stock on listing day for long term gains.
