IPO closes on 5 Dec'25
Vidya Wires Ltd
Minimum Investment
₹ 14,976 / 288 shares
Our Verdict:
Neutral
- Vidya Wires Ltd (VWL) has delivered strong growth, with revenue CAGR of 21% and net profit CAGR of 38% between FY23 and FY25.
- From a valuation standpoint too, the IPO appears fairly priced with a P/E ratio of 20x FY25 earnings, which is significantly below the industry average of 48x.
- The company is also doubling its manufacturing capacity, which could lift its market share to nearly 11%.
- However, there are some concerns that need attention. High short-term borrowings (close to Rs 140 crore) and negative operating cash flow indicate working-capital stress. Even though the IPO proceeds may help reduce some debt, the company is likely to rely on short-term financing until cash flows improve.
- Moreover, margins remain modest and the upcoming capacity expansion introduces execution risk, especially since cash flows are already strained.
- While valuations offer some comfort, the business fundamentals require stronger stability before a long-term investment can be justified. Any potential listing gains will likely be driven more by market sentiment rather than core fundamentals.
- Given these factors, a cautious strategy is advisable. A better approach would be to wait for the stock to settle into a stable range after listing and consider accumulating on dips, once execution visibility improves as the new capacity is expected to be commercially operational by mid-January 2026.
About the company
Founded in
11 Dec'81
Managing director
Shailesh Rathi
- VWL manufactures a diverse range of winding and conductivity products used across mission-critical applications such as power generation and transmission, electrical systems, electric motors, clean energy technologies, electric mobility and railways.
- VWL produces over 8,000 SKUs, with product sizes ranging from 0.07 mm to 25 mm. Its comprehensive product portfolio includes enameled wires and copper rectangular strips, paper-insulated copper conductors, copper busbars, bare copper conductors, specialized winding wires, PV ribbons and aluminium paper-covered strips, among others.
- While India is its primary market, VWL has supplied its products to 318+ customers, including 19+ international clients across 18+ countries. Exports contributed 13.57% of operating revenue in FY25 and 11.2% in Q1FY26.
STRENGTHS
- Market Positioning: VWL is the 4th largest manufacturer in India's winding and conductivity products industry, commanding a 5.7% market share in installed capacity for FY25. With the proposed expansion, this is expected to rise to 11%.
- Impressive Growth: VWL has demonstrated robust growth, with revenue from operations increasing at a CAGR of 21% between FY23 and FY25. EBITDA and net profit have grown at even higher CAGRs of 34% and 38%, respectively, during the same period.
- Return Metrics: VWL boasts healthy return ratios, with a Return on Equity (RoE) of 24.57% and a Return on Capital Employed (RoCE) of 19.72% as of FY25.
- Increased Capacity Utilization: Capacity utilization has improved significantly, rising from 70.31% in FY23 to 94.51% in Q1FY26. Production volumes have grown by 29% over three years, from 13,415 MT in FY23 to 17,338 MT in FY25.
- Strong Customer Retention: VWL benefits from a high level of repeat customers, which reduces revenue dependency and mitigates risks. For instance, the company sold products to 318 and 458 customers in Q1FY26 and FY25, respectively, of which 206 and 341 were repeat customers. In terms of revenue, repeat customers contributed 80.55% in Q1FY26 and 94.28% in FY25.
RISK FACTORS
- Client Concentration: VWL’s revenue is heavily reliant on a few large clients, with the top 5 clients contributing nearly 22% of operating revenue in FY25. Any loss or reduction in business from these key clients could impact revenue and overall financial performance.
- Modest Margins: While margins have improved, they remain relatively low, with an EBITDA margin of 4.32% and PAT margin of 2.74% in FY25, leaving limited buffer against cost pressures or market volatility.
- Cash Flow Concerns: VWL reported negative cash flow from operating activities in both Q1FY26 and FY25. Prolonged negative cash flows could put pressure on liquidity, disrupt day-to-day operations and limit financial flexibility.
- Copper Dependency: Over 93% of VWL’s revenue is derived from copper-based products. Any adverse changes in market conditions for these products or a slowdown in demand could negatively affect the business, financial health and operational results.
- Regulatory Concerns: One of the promoters, Shilpa Rathi, along with certain promoter-group entities, has received notices under SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003, which may raise governance and compliance risks.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 300.01 crore
Fresh Issue
₹ 274 crore
OFS
₹ 26.01 crore
Price range
₹ 48 - 52
Lot size
288 shares
Issue Objective
The fresh proceeds from the net issue will be utilised towards the following purposes:
- Setting up a new manufacturing unit via its subsidiary, ALCU Industries Pvt Ltd;
- Repayment/prepayment of certain outstanding borrowings availed by the company; and
- General corporate purposes.
Dates
Bidding open
3 Dec'25
Bidding close
5 Dec'25
Allotment date
8 Dec'25
Refund date
9 Dec'25
Listing
10 Dec'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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