Mumbai: Transformer Manufacturer Atlanta Electricals’ Rs.687 crore IPO opens today, with the price band of Rs.718-754 per share. The company will issue new shares worth Rs.400 crore along with an Offer For Sale (OFS) component of equity shares up to 38.10 lakh shares. The company aims to use the proceeds to fund its working capital requirements, repay debt, and cover other corporate expenses. The issue closes on Wednesday, September 24.
The Anand, Gujarat-based company is India’s leading transformer maker, with major public utilities being its major clients. Currently, the company has a strong order book of Rs.1,642 crore as of March 2025, with growing export orders. Though its acquisition of BTW- Atlanta Transformers and post the commissioning of its Vadodara unit, Atlanta Electricals Limited (AEL) has gained the capability to produce high-capacity transformers up to 500 MVA with voltages up to 765 kV.
The company has a diversified product range, with products that meet the requirements of a diverse set of use cases. However, manufacturing is highly capital intensive and the company hasn’t been able to diversify beyond transformers. However, the surging demand for electricity has sustained demand, even as raw material prices and cyclical demand risks the company’s revenue stream.
Analysts, however, have broadly given a ‘subscribe’ rating to the issue, primarily on the abc of its strengthening competitive positioning.
“Industry tailwinds are robust, with CEA projecting 162,646 ckm of new transmission lines and 1,159,805 MVA of substation capacity by FY2032, and the Indian transformer market forecast to grow at 6–7 per cent CAGR over FY24–30 to $3.5 billion by FY2030. We have issued a subscribe’ rating for Atlanta Electricals IPO for listing gains,” Chennai-based brokerage platform Chola Securities said in a release.
The company has, over the years, expanded its manufacturing capacity by 2.8 times and is all set to increase it even further. This will help it to cater to the growing demand for transformers across India. Its revenue has increased 43% year on year, its Return on Equity (ROE) has increased from 27.8% to 33.9% in a year, mainly on the back of its top 10 customers, who account for almost 74% of its revenues.
“It has a high exposure to state utilities compared to peers, which can lead to higher working capital requirements. Lack of backward integration is also likely to keep a lid on the margins. We recommend investors to ‘subscribe’ to the issue from a long-term perspective, considering the benefits of expanded capacity to flow during the next 2-3 years,” a report by SBI Securities said.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
