SEPC Rights Issue 2025 Oversubscribed: Investor Appetite Surges for Small-Cap Engineering Stock Below ₹20

Mumbai, June 26, 2025 — Shares of SEPC Ltd, a small-cap infrastructure and engineering firm, were in the spotlight this week after the company’s ₹350 crore rights issue for 2025 was oversubscribed, signaling strong investor interest. Priced under ₹20 per share, the rights issue attracted considerable traction from both retail and institutional investors, underscoring the market’s bullish stance on infrastructure plays amid India’s capital expenditure boom.

What Was Offered in the Rights Issue

SEPC Ltd had announced the rights issue to raise ₹350 crore by offering shares at ₹17 each—a nearly 20% discount to the prevailing market price of ₹21. The issue was available in the ratio of 5:6, meaning eligible shareholders could apply for 5 rights shares for every 6 shares held on the record date. The subscription window opened on June 10 and closed on June 24, 2025.

The purpose of the fundraise, according to company filings, was to augment long-term working capital, reduce debt, and support project execution in ongoing domestic and international engineering, procurement, and construction (EPC) contracts.

“The enthusiastic response reflects trust in our long-term business model and the tailwinds of government infrastructure spending,” said R. Ramasubramaniam, Executive Director at SEPC Ltd.

Why Investors Rushed to Subscribe

Several factors worked in SEPC’s favor:

• Discounted Pricing: At ₹17 per share, the rights issue was attractively priced, giving investors a low-cost entry into a growth-oriented EPC stock.

• Improving Order Book: SEPC’s order book, pegged at over ₹2,000 crore as of Q4 FY25, has been growing steadily across sectors like water infrastructure, oil & gas, and power transmission.

• Government Push for Infrastructure: With the Indian government targeting ₹11 lakh crore in capex outlay for FY26, EPC players are positioned to benefit from higher project flows.

• Debt Reduction Plan: SEPC’s intent to deleverage through proceeds from the rights issue is expected to improve its balance sheet and profitability in the medium term.

“We see a structural rerating in EPC-focused small-caps like SEPC, especially those with proven execution capabilities and a manageable debt profile,” said Karan Bhagat, Managing Director, IIFL Wealth. “The oversubscription hints at both retail optimism and smart institutional repositioning.”

SEPC Share Price Movement and Market Buzz

Ahead of the rights issue, SEPC shares witnessed increased volumes and volatility. From a low of ₹15.80 in early May, the stock surged nearly 35% to ₹21.40 by the issue closing date, reflecting both speculative and value-based buying.

Analysts caution, however, that small-cap engineering stocks can remain vulnerable to execution delays, margin pressure, and working capital constraints.

“While the rights issue boosts liquidity, investors should temper expectations and focus on the company’s execution cycle and quarterly performance,” said Ankit Desai, Small-Cap Analyst at Edelweiss Securities.

Investor Profile and Participation Trends

Preliminary data suggest a robust mix of participation:

• Retail Shareholders: Over 1.1 lakh retail investors reportedly applied, many of whom are existing long-term holders attracted by the low price and positive industry outlook.

• HNI and Institutional Investors: Several high-net-worth individuals and family offices participated aggressively, taking a contrarian view on small-cap infra plays post the recent market consolidation.

Notably, the rights entitlement trading also witnessed active volumes, as non-entitled investors sought indirect access via RE (Rights Entitlements) purchases.

SEPC’s Financial Snapshot and Turnaround Strategy

SEPC, formerly part of the Shriram EPC group, has been focusing on restructuring its balance sheet and revamping its operational model over the last few quarters. For FY25, the company reported a narrowed net loss of ₹14.6 crore, down from ₹36 crore in FY24, while revenue grew 18% YoY to ₹510 crore.

The company has also diversified its order pipeline with recent wins in Sri Lanka, Africa, and domestic smart city projects.

“Our focus is now on scaling execution efficiency and securing higher-margin projects. This capital infusion is timely,” Ramasubramaniam added.

Outlook: What’s Next for SEPC and Investors

With the rights issue now successfully closed and funds soon to be deployed, market participants will keenly track SEPC’s Q1 FY26 performance, debt-reduction updates, and new project announcements.

Brokerages remain cautiously optimistic:

• Motilal Oswal: “Retain positive stance. SEPC could deliver strong returns if margin recovery continues. Price target ₹28 (12-month horizon).”

• Geojit: “Monitor debt-to-equity post rights. Positive on infrastructure-led growth theme but suggest accumulating on dips.”

For retail investors, the rights issue offered an affordable entry into a niche small-cap with turnaround potential. Whether SEPC delivers on its promises will depend on timely project execution, disciplined financial management, and continued sector tailwinds.