Vikran Engineering Ltd IPO

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.