Technocraft Ventures

IPO Size: Rs. 252 cr

• Fresh Issue of Rs. 202 cr for funding working capital of Rs. 150 cr
• Offer for Sale (OFS) of Rs. 50 cr by promoter (100% stake to shrink to 70%)

Price band: Rs. 200-212 per share

M cap: Rs. 840 cr, implying 30% dilution

IPO Date: Fri 7^th Aug to Tue 11^th Aug 2026, Listing Fri 14^th Aug 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

 

EPC Company for Water Sector

Technocraft Ventures is a Delhi-based EPC (engineering, procurement and construction) company undertaking water and wastewater infrastructure projects for water supply, sewerage networks, sewerage treatment plants, wastewater treatment plants, transmission mains, reservoirs, trenchless and micro tunnelling works. This accounts for ~85% of Rs. 345 cr topline, with balance coming from roads and highways, electrical transmission, urban infrastructure.  

 

Regional Player with high Order Book

Company undertakes projects in mainly North Indian states of Rajasthan, Uttar Pradesh, Uttarakhand, Delhi. Its outstanding order book of Rs. 1,320 cr provides a book-to-bill ratio of 3.8x, based on FY26 revenue of Rs.345 cr.

 

Elongated Working Capital Cycle

On FY26 revenue of Rs. 345 cr, EBITDA margin is 20%, with PAT at Rs. 43 cr, leading to net margin of 12.6%. On equity of Rs. 30 cr, EPS is Rs. 14.4.  

Most of the work undertaken is for government projects, hence Technocraft’s receivables cycle is quite stretched, with debtors outstanding of Rs. 118 cr, as of 31.3.26, having doubled YoY from Rs. 58 cr, as of 31.3.25. This leads to nearly 4 months of outstanding sales locked in receivables. Including inventory outstanding at ~2.5 months, working capital management is quite strained. No wonder of fresh issue dilution is nearly 24% of company size. This causes compression on RoE, with 30% in FY26, likely to contract to nearly 20% by FY28E.

 

Fully Priced Micro-Cap

M cap of Rs. 840 cr and Enterprise Value of Rs. 890 cr implies a PE multiple of 14x, based on FY27E EPS of close to Rs. 15. This makes the micro-cap regional EPC player fully-priced.

The track record of some of the smaller water-sector EPC companies has not be very good:

 

• EMS with Rs. 733 cr topline and 12.4% net margin, faultered on growth in FY26, after a bumper listing in Sep 2023, is now trading at historic PE multiple of 13x.
• Even Vishnu Prakash de-grew for the past 2 fiscals, with FY26 revenue dropping to Rs. 850 cr, from Rs. 1,474 cr revenue in FY24, which was its year of IPO (listed in Sep 2023). From a net profit of Rs. 122 cr in FY24, Vishnu Prakash reported net loss of Rs. 150 cr in FY26.
• Smaller peer Denta Water with Rs. 250 cr topline and 24% net margin is trading at a PE of 14x.
• Larger peer Enviro Infra, with a larger topline of Rs. 1,146 cr as well as stronger net margin of 16% net margin, is trading at PE of 17x.

Thus, peer valuation multiples is closer to that of Technocraft’s IPO pricing, making the latter unattractive.