IPO closes on 24 Sep'25
Atlanta Electricals Ltd
Minimum Investment
₹ 14,326 / 19 shares
Our Verdict:
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- Atlanta Electricals Ltd (AEL) has shown impressive growth in both revenue and earnings over the last three years. Its strong order book further enhances its growth prospects. Additionally, the acquisition of BTW-Atlanta Transformers India Pvt Ltd will enhance its export capabilities and help establish a stronger foothold in export markets.
- AEL has managed significant capex without major equity dilution by relying on internal accruals and controlled borrowings. The Rs 79 crore from the IPO, allocated for debt repayment, will further enhance its balance sheet. Additionally, the Rs 210 crore earmarked for working capital should ensure adequate liquidity for the next 2-3 years, enabling continued growth.
- Valuation-wise, the IPO is priced at a Price-to-Earnings (PE) multiple of 45x based on FY25 earnings, which is higher than the industry average. However, this premium is justified by the company’s transformative capacity expansion, entry into high-voltage segments and the growing export potential.
- With the IPO, AEL aims to scale up its operations, meet funding needs and capitalize on the structural uptrend in India’s transmission and distribution (T&D) sector. The combination of new capacity, a stronger balance sheet and improved working capital positions AEL well for medium-term growth.
- Given these factors, investors may consider subscribing to the IPO with a medium-to-long term investment horizon.
About the company
Founded in
15 Dec'88
Managing director
Niral Patel
- AEL is one of India’s leading manufacturers of power, auto and inverter-duty transformers, with over 30 years of experience in the industry and a strong pan-India presence. It offers a diverse product portfolio, ranging from 5 MVA/11 kV to 200 MVA/220 kV transformers. In addition to its manufacturing capabilities, the company is actively involved in EPC projects, providing comprehensive infrastructure solutions across the power sector.
- AEL operates 5 advanced manufacturing facilities, including a newly commissioned unit, with a combined installed capacity of 63,060 MVA. As of March 31, 2025, AEL has supplied over 4,400 transformers, totalling 94,000 MVA, across 19 states and 3 union territories. Its customer base includes state and national electricity grids, leading private sector utilities, renewable energy developers and major construction companies.
STRENGTHS
- Solid Growth: AEL has delivered impressive performance from FY23 to FY25, recording a CAGR of 19% in operating revenue, 18% in EBITDA and 16% in net profit.
- Superior Return Metrics: With a Return on Equity (ROE) of 34% and Return on Capital Employed (RoCE) of 39%, AEL significantly outperforms listed peers, demonstrating both strong shareholder value creation and efficient capital deployment.
- Healthy Profit Margins: AEL boasts an EBITDA margin of 16.07% and a PAT margin of 9.54%, reflecting strong cost control and operational efficiency.
- Robust Order Book: As of March 31, 2025, AEL reported an order book of Rs 1,642.96 crore, ensuring medium-term revenue visibility and growth sustainability.
- Prudent Capital Structure: AEL maintains a conservative debt policy, with a debt-to-equity ratio of just 0.4 as of March 31, 2025, reflecting solid financial management. This is especially notable considering the company's aggressive capacity expansion, increasing installed capacity from 16,740 MVA to 63,060 MVA through both organic and inorganic growth.
- Expanding Customer Base: The customer portfolio grew from 137 in FY23 to 208 in FY25, registering a CAGR of 23%. Clients span key industries such as special-purpose transformers, transmission and renewables.
RISK FACTORS
- Client Concentration: A significant portion of AEL's revenue is concentrated among a few key clients. In FY25, 29% of operating revenue came from its largest customer and 61% from its top 5 customers. Any disruption in relationships with these key clients could materially impact AEL’s financial performance.
- Supplier Dependency: AEL relies heavily on its top 10 suppliers, which accounted for nearly 62% of the total cost of raw materials purchased in FY25. The absence of long-term supply agreements with these key suppliers increases the risk of pricing pressure. Any fluctuations in the supply or cost of essential raw materials and components could adversely affect the firm’s business and financial condition.
- Dependency on State Electricity Companies: AEL generates a significant portion of its revenue from supplying transformers to state electricity companies, which accounted for 65.85% of operating revenue in FY25. Its performance is closely linked to the demand for power generation, transmission and distribution, which is heavily influenced by government policies. Any economic downturn or changes in government policy could negatively impact the firm’s business and operational results.
- Tendering Process Dependency: A substantial portion of AEL's revenue comes from government-controlled entities that rely on a tendering process to select suppliers. In FY25, the firm’s success rate in winning tenders was just 18%.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 687.34 crore
Fresh Issue
₹ 400 crore
OFS
₹ 287.34 crore
Price range
₹ 718 - 754
Lot size
19 shares
Issue Objective
The net proceeds from the fresh issue will be utilized for the following purposes:
- Prepayment or repayment of certain outstanding borrowings availed by the Company;
- Funding the working capital requirements of the Company; and
- General corporate purposes.
Dates
Bidding open
22 Sep'25
Bidding close
24 Sep'25
Allotment date
25 Sep'25
Refund date
26 Sep'25
Listing
29 Sep'25
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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