Vikran Engg. IPO

One of the fast-growing engineering, procurement and construction ("EPC") companies, with timely execution of power transmission and distribution and water infrastructure sector.

Diversified Order Book across business verticals and consistent financial performance.

Pan India presence with strong supply chain.

Asset light model.

In-house technical and engineering capabilities, process control and quality assurance.

Experienced promoters and management team, having domain knowledge.

Majority of our projects have been awarded through competitive bidding process. Failure to complete our projects within contractual time may affect our future business prospects and financial performance. Failure to qualify for, complete or win new contracts could negatively impact our business, potentially affecting our financial condition, operational results, growth prospects, and cash flow stability.

Executive Director/Gati Shakti (Elect.) Railway Board has passed an Order dated July 26, 2024, in terms of which CORE/Vigilance has held that the Ministry of Railways should ban the Company for a period of two years for breaching code of integrity and involvement in illegal gratification.

Trade receivables, contract assets and inventories form a substantial part of our current assets and net worth. Failure to manage the same could have an adverse effect on our profitability, cash flow and liquidity.

Our business is driven by a diversified mix of tenders from government authorities, public sector undertakings, and private sectors, which account for approximately 61.73%, 18.41% and 19.86% of our revenue for Fiscal 2025. However, delays or a lack of tenders from government entities, along with adverse changes in government policies, could materially impact our business through contract foreclosures, terminations, restructurings, or renegotiations, affecting our operations and financial performance.

Our Order Book for Financial Year 2025 has decreased significantly compared to Financial Year 2024, with a substantial reduction in government orders and a decrease in order values for water and railway infrastructure projects.

As at end of Fiscals 2025, 2024, and 2023, our trade receivables amounted to Rs.6,343.29, Rs.4,638.96 million, and Rs.3,699.07 million, respectively, out of which Rs.794.83 million, Rs.549.04 million, and Rs.136.21 million, aggregating to 12.19%, 11.56%, and 3.63%, respectively, of our total trade receivables (excluding expected credit loss allowance) was outstanding for a period exceeding six months from their respective due dates of payments. We may not be able to collect receivables due from our customers, in a timely manner, or at all, which may adversely affect our business, financial condition, results of operations and cash flows.

There are certain defaults/ delay in payment of statutory dues by us. Any further default/delay in payment of statutory dues may attract regulatory action from the respective government authorities and in turn may have a material adverse impact on our financial condition and cash flows.

Our Company, in the past, availed moratoriums, sanctioned under the RBI`s regulatory package dated March 27, 2020 in view of COVID-19, for payment deferral of the re-payment of principal amount of facility availed by our Company from certain lenders.

Our Company has experienced negative net cash flows from operating activities (Net Cash Generated in Operating Activities) in Fiscals 2025 and 2024 amounting to Rs. 1,290.86 million and Rs. 664.77 million, respectively. While we are PAT positive, we cannot assure you that we will sustain profitability or positive cash flows going forward, which could have a material adverse effect on our business, prospects, financial condition, cash flows and results of operations.

We have Order Book of Rs. 24,424.39 million as on June 30, 2025. However, our Order Book may not be representative of our future results, as projects included in our Order Book particularly for the projects where we are the lowest bidder, may be cancelled, modified, or delayed beyond our control, leading to significant deviations from estimated income and adversely affecting our business, reputation, financial condition, and future prospects.

Contribution of our top customers has been diversified over the period. However, a significant portion of our Order Book and revenue from operations is attributable to certain key customers and to projects located in India, and our business and profitability is dependent on our ability to win projects from such customers.

The majority of our Order Book and our revenues are from power transmission and distribution sector and water infrastructure sector. Significant social, political, or economic changes in these sectors could adversely affect our business, results of operations, financial condition, and cash flows.

We have entered into, and will continue to enter into, related-party transactions which may potentially involve conflicts of interest.

Bidding for a tender involves various activities such as detailed project study and cost estimations. Inability to accurately estimate the cost may lead to a reduction in the expected rate of return and profitability estimates.

The failure of a JV counterparty to perform its obligations could impose additional financial and performance obligations resulting in reduced profits or, in some cases, significant losses, and it may adversely affect our business, results of operations and financial condition.

Our actual cost incurred in completing a project may vary substantially from the assumptions underlying our bid. We may be unable to recover all or some of the additional expenses incurred, which could adversely affect our financial condition, results of operation and cash flows.

Our insurance coverage may be inadequate, which could have an adverse effect on our financial condition and results of operations.

Our business typically requires significant amounts of working capital and historically, our business growth has been dependent on high working capital requirements. Our working capital as a percentage of (i) total assets was 50.21%, 43.19%, and 29.30% as at March 31, 2025, March 31, 2024, and March 31, 2023, respectively, and (ii) revenue was 74.27%, 52.74%, and 39.82% as at March 31, 2025, March 31, 2024, and March 31, 2023 respectively, and our working capital turnover ratio in Fiscal 2025, Fiscal 2024, and Fiscal 2023 was 1.35, 1.90, and 2.51, respectively. If we experience insufficient cash flows or are unable to access suitable financing to meet working capital requirements and loan repayment obligations, our business, financial condition and results of operations could be adversely affected.

Most premises used by us are not registered in our name and are located on leased premises. There can be no assurance that these lease agreements will be renewed upon termination or that we will be able to obtain other premises on lease on same or similar commercial terms.

We cannot assure that the construction of our projects will be free from any or all defects, which may adversely affect our business, financial condition, results of operations and prospects.

Certain emphasis of matter are reported in the Restated Financial Information.

We are required to furnish bank guarantees as part of our business. Our inability to arrange such guarantees or the invocation of such guarantees or our inability to fulfil any or all of the obligations under such bank guarantees/surety bonds may or may not adversely affect our cash flows and financial condition.

If any of our projects are terminated prematurely, we may not receive payments due to us, which could adversely affect our business, financial condition and results of operation.

There are outstanding legal proceedings involving our Company, Promoters and Directors. Any adverse decision in such proceedings may adversely affect our business, financial condition and results of operations.

We face certain competitive pressures from the existing competitors and new entrants in both public and private sector. Increased competition and aggressive bidding by such competitors are expected to make our ability to procure business in future more uncertain which may adversely affect our business, financial condition and results of operations.

We have experienced growth in recent years and may be unable to sustain our growth or manage it effectively. We cannot assure you that we will be able to successfully execute our growth strategies, which could affect our business, prospects, results of operations and financial condition.

We have certain contingent liabilities, which, if they materialize, may adversely affect our results of operations, financial condition and cash flows.

Our financing agreements contain covenants that limit our flexibility in operating our business. Further, our Company has availed unsecured loans from banks and other financial institutions, which may be recalled on demand. If we are not in compliance with certain of these covenants and are unable to obtain waivers from the respective lenders, our lenders may accelerate the repayment schedules, and enforce their respective security interests, leading to a material adverse effect on our business and financial condition.

Our Company had obtained a loan of Rs.182.90 million from Vikran Global Infraprojects Private Limited (VGIPL), a Group Company, out of which Rs.79.46 million was converted into 3,700 equity shares of face value Rs.10 each (equivalent to 37,000 Equity Shares of Rs.1 post split), which were allotted to VGIPL.

Delays in the acquisition of private land or rights of way, eviction of encroachments, environmental clearances for the projects or resolution of associated land issues, which are though attributable to our customers, may adversely affect our timely performance of our contracts and lead to disputes and losses.

We require various statutory and regulatory permits and approvals in the ordinary course of our business, and our failure to obtain, renew or maintain them in a timely manner may adversely affect our operations.

We are highly dependent on our Key Managerial Personnel, Senior Management Personnel and skilled professionals for our business. The loss of or our inability to attract or retain such persons could have an adverse effect on our business performance.

Our Company is currently facing criminal proceedings based on a charge sheet filed by the Central Bureau of Investigation ("CBI").

Our inability to protect or use our intellectual property rights may adversely affect our business. We may also unintentionally infringe upon the intellectual property rights of others, any misappropriation of which could harm our competitive position.

Our business model is centered around providing Engineering, Procurement, and Construction (EPC) services across infrastructure sectors such as power, water, and railway, and it is subject to various risks related to order procurement, project execution, revenue generation, and profit margins.

The total expenses of the Offer are estimated to be approximately Rs. [?] million. The expenses of this Offer include, among others, fees payable to intermediaries such as, the BRLMs, Registrar to the Offer and Bankers to the Offer.

The market share of companies operating within the same EPC sector as that of our Company is not readily available in the public domain.

Our Company has experienced fluctuations in its trade receivables days over the past few fiscal years, with an actual decrease from 221 days in Fiscal 2023 to 190 days in Fiscal 2025.

We follow an asset-light business model by executing a number of orders through leasing of equipment and machinery and with relatively lower investment in owned fixed assets. We take equipment on rent from third party lessors of equipment across various states to meet our requirements of equipment as per project needs. However, our dependence on leased assets for operations exposes us to risks such as its timely availability, cost fluctuations, variation in lease terms, risk of lease termination, etc., which could have a material adverse effect on our financial condition, results of operations, and cash flows.

Infrastructure projects are dependent on government policies, political stability, and decisions taken by governmental and regulatory bodies.

The EPC industry in India has faced criticism for its impact on the environment, particularly in terms of waste generation and energy consumption.

Changes in regulations, such as safety standards and building codes, and associated compliances could result in increased compliance costs, delays in project execution, or changes to project scope and design, which may adversely affect our business operations and financial performance.

Our debt service coverage ratio ("DSCR") is less than 1 in last three Fiscals, and there has been decreasing return on equity and capital employed from Financial Year 2024 to Financial Year 2025.

Our projects are exposed to various risks and other uncertainties, and our risk management and project selection framework may be inadequate, which may adversely affect our business, results of operations and financial condition.

We are exposed to claims, penalties and damages resulting from delays in our projects which may have an adverse effect on our business.

Our contracts with government agencies usually contain terms that favour the government customers, who may terminate our contracts prematurely and impose restrictions on our Company from procurement of any future contracts under various circumstances beyond our control, which may have a material adverse impact on our financial condition and results of operations.

Our business and operation involve inherent occupational hazards which can be dangerous and could cause injuries to people or property.

Valuation report obtained for Scheme of Amalgamation is based on assumptions and may not be indicative of the true value.

We rely on third party logistics providers for transportation of our products and machines to the project site or distribution to our customers. Any delay or disruption or refusal by our third-party logistics providers in timely delivery of our products may affect our business, results of operations and cash flow adversely.

We rely on third parties, including for equipment and contract labour agencies, to complete our projects and any failure arising from non-performance, delayed performance or inadequate quality in the performance of work by such third parties, or a failure by third-party contract labour agencies to comply with applicable laws, to obtain the necessary approvals, or provide services on agreed terms, could adversely affect our business, financial condition, results of operations and cash flows.

Fluctuation in cost of raw materials or any shortages, delay or disruption in the supply of the raw materials we use in our manufacturing process due to factors beyond our control or may have a material adverse effect on our business, financial condition, results of operations and cash flows.

We operate in a labour-intensive industry and are subject to stringent labour laws and any strike, work stoppage or increased wage demand by our employees or any other kind of disputes with our employees could adversely affect our business, financial condition, results of operations and cash flows.

Our ability to access capital at attractive costs depends on our credit ratings. Non-availability of credit ratings or a poor rating or downgrading of rating may restrict our access to capital and thereby adversely affect our business, financial conditions, cash flows and results of operations.

Objects of the Fresh Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of our Net Proceeds as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

Although subject to monitoring, our management will have broad discretion in how we apply the Net Proceeds, including interim use of the Net Proceeds, and there is no assurance that the objects of the Offer will be achieved within the time frame expected or at all, or that the deployment of the Net Proceeds in the manner intended by us will result in any increase in the value of your investment.

The objects of the Fresh Issue is funding working capital requirements, which is based on certain assumptions and estimates. Any failure in arranging adequate working capital for our operations may adversely affect our business, results of operations, cash flows and financial conditions.

The Offer includes an offer for sale of up to [?] Equity Shares aggregating up to Rs. 510 million by the Promoter Selling Shareholder, and we will not receive any proceeds from such Offer for Sale portion.

Majority of our Directors do not have prior experience of holding a directorship in a company listed on the Stock Exchanges.

We incur significant employee benefits expense. An increase in employee costs, including on account of changes in regulations, may prevent us from maintaining our competitive advantage and may reduce our profitability.

This Red Herring Prospectus contains information from industry sources including the industry report commissioned by the Company from CRISIL, and reliance on such information for making an investment decision in the Offer is subject to certain inherent risks.

Our Company has paid Rs. 37.80 million as dividend in Fiscal 2025, Rs.39.20 million in Fiscal 2024 and Rs.10.16 million in Fiscal 2023. Our ability to pay dividends in the future will depend on our future cash flows, working capital requirements, capital expenditures and financial condition.

The COVID 19 pandemic, or any future pandemic or widespread public health emergency, could impact our business, financial condition, cash flows and results of operations.

If we are unable to establish and maintain an effective system of internal controls and compliances, our businesses and reputation could be adversely affected.

Our Promoters and members of Promoter Group will continue to retain a majority shareholding in our Company after the Offer, which will allow them to exercise significant influence over us.

For our business, we rely heavily on our Promoters namely, Rakesh Ashok Markhedkar, Nakul Markhedkar and Avinash Ashok Markhedkar, who are the Managing Director and Whole-Time Directors, respectively. Our business performance may have an adverse effect by their departure or by our failure to recruit or keep them.

Our Promoters have provided personal guarantees as security for certain facilities availed by our Company. If these guarantees are revoked, we may be unable to procure alternative guarantees satisfactory to our lenders, which may adversely affect our business, results of operations, cash flows and financial condition.

Certain of our Promoters, Directors and Key Managerial Personnel and members of Senior Management may have interests in us other than reimbursement of expenses incurred and normal remuneration or benefits.

Conflicts of interest may arise out of common business objects between our Company and our Promoters, Group Companies, and certain of the members of our Promoter Group.

The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchanges.

We have presented certain supplemental information of our performance and liquidity which is not prepared under or required under Ind AS.

Significant differences exist between Ind AS and other accounting principles, such as US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more familiar with and consider material to their assessment of our financial condition.

Pursuant to listing of the Equity Shares, we may be subject to pre-emptive surveillance measures like Additional Surveillance Measure (ASM) and Graded Surveillance Measures (GSM) by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.