Powerica IPO saw weak demand on day two, with 3% subscription and retail interest. Grey market premium remains negligible. The company aims to raise Rs 1,100 crore, with proceeds for debt repayment, while brokerages recommend long-term subscription despite modest growth.

Powerica IPO Day 2: Issue subscribed just 3%; check GMP and key details inside

Synopsis

Powerica IPO saw weak demand on day two, with 3% subscription and retail interest. Grey market premium remains negligible. The company aims to raise Rs 1,100 crore, with proceeds for debt repayment, while brokerages recommend long-term subscription despite modest growth.

The initial public offering (IPO) of Powerica Limited saw muted demand on the second day of bidding, with the issue subscribed only 3% against the 2.05 crore shares on offer. The retail portion has also shown weak interest so far, with just 4% subscription. The three-day subscription window will close on Friday, March 27.

In the grey market, the IPO is trading at a marginal premium of less than 1%, or about Rs 2 over the issue price of Rs 395, indicating an estimated listing price of around Rs 397.

The company aims to raise Rs 1,100 crore through the IPO, which includes a fresh issue of 1.77 crore shares worth Rs 700 crore and an offer for sale of 1.01 crore shares worth Rs 400 crore.

Powerica IPO subscription status:

On Day 2, the Powerica IPO was subscribed only 3% overall, against the 2.05 crore shares on offer, as per BSE data.

Retail Individual Investors (RIIs) subscribed 4% of their allocated 1.02 crore shares. Non-Institutional Investors (NIIs) saw just 1% subscription of their 43.92 lakh share quota, while Qualified Institutional Buyers (QIBs) showed no participation, placing zero bids for the 58.56 lakh shares reserved for them.

Powerica IPO GMP:

In the grey market, the issue is trading at a marginal premium of less than 1%, or about Rs 2 over the issue price of Rs 395, suggesting an estimated listing price of around Rs 397. The grey market premium (GMP) is an unofficial indicator based on activity in the unofficial market and does not reflect the actual listing price or guarantee any outcome.

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About Powerica IPO

The company has fixed the price band at Rs 375–395 per share, with retail investors required to apply for a minimum of one lot comprising 37 equity shares, amounting to Rs 14,615.

The IPO includes a fresh issue of shares worth up to Rs 700 crore and an offer for sale (OFS) of up to Rs 400 crore. This also includes a reservation of up to Rs 2 crore for eligible employees and an anchor investor portion of 83,39,239 equity shares.

Employees are being offered a discount of Rs 37 per share. The issue allocation has been set at 50% for qualified institutional buyers (QIBs), up to 35% for retail investors, and 15% for non-institutional investors (NIIs).

The company had already raised Rs 329.39 crore from anchor investors on Monday.

Powerica IPO net proceeds

The company will utilize Rs 525 crore towards payment of its borrowings while Rs 175 crore for general corporate purposes. The OFS part will go to the selling shareholders.

About Powerica

Powerica is a comprehensive power solutions provider, specializing in diesel generator (DG) sets for both primary and standby applications. As a long-standing Original Equipment Manufacturer (OEM) for Cummins India Ltd, the company has maintained a strong partnership spanning over four decades.

The company manufactures DG sets along with related components such as acoustic enclosures, fuel and exhaust systems, and customized control panel systems. Leveraging its expertise in the generator set business, Powerica entered the wind power sector in 2008 as an Independent Power Producer (IPP). It later expanded into Engineering, Procurement, and Construction (EPC) services, as well as Operation and Maintenance (O&M) solutions for Balance of Plant (BoP) projects.

Through its associate company, Platino Automotive, Powerica is also involved in the Retrofit Emission Control Devices (RECDs) business, offering solutions to significantly reduce emissions from existing DG sets.

Powerica Financials

The company's revenue from operations in H1FY26 stood at Rs 1,447 crore while its profit after tax (PAT) stood at Rs 129 crore. For FY25, revenue stood at Rs 2,653 versus Rs 2,210 crore in FY24 and Rs 2,378 in FY23. The PAT stood at Rs versus Rs 167 crore in FY25 and Rs 226 crore in FY24 and Rs 106 crore in FY23.

Powerica IPO lead managers

The Book Running Lead Managers (BRLMs) are ICICI Securities Ltd, IIFL Capital Services Ltd, Nuvama Wealth Management Ltd while the registrar to the issue is MUFG Intime India Pvt Ltd.

Should you bid?

SBI Securities recommends investors to 'Subscribe' the issue for long term, valuing the company at 19.4X annualized FY26 earnings on post-issue capital at the upper band of the issue price.

"Although the revenue has grown only at a mid-single digit CAGR of 5.6% between FY23-FY25, growth has picked up during FY26. Demand for Diesel Generator sets remains strong led by data centers and backup power applications. The company has strong long term relationships with Cummins, Hyundai, Schneider Electric, GE Vernova and Vestas," the brokerage said.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

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