Powerica IPO In Focus On Day 2 Of Offering - Is It Worth Subscribing To? Read Geojit's Report

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Geojit Report

Powerica Ltd. launched its initial public offering (IPO) on March 24 and the offer closes for subscription on March 27.

An integrated power solutions provider has fixed the price band in the range of Rs 375 to Rs 395 Apiece.

The Powerica IPO is a book-build issue of Rs 1,100 crore. It comprises a fresh issue of 1.77 crore shares worth Rs 700 crore and an offer-for-sale (OFS) of 1.01 crore shares amounting to Rs 400 crore.

Investors can place bids starting from a minimum of 37 shares and in multiples thereafter, meaning a minimum amount of investment required by an individual investor (retail) is Rs 14,615 based on upper price.

ICICI Securities, IIFL Capital Services, Nuvama Wealth Management are the book running lead managers while MUFG Intime India Ltd. is the registrar of the issue.

Cummins India and Kirloskar Oil Engines are are among Powerica's peers in the sector.

Shares of the company are tentatively scheduled to be listed on the BSE and NSE on April 02.

Purpose of IPO

The offer consists of a fresh issue of Rs 700-crore and an offer-for-sale (OFS) amounting to Rs 400-crore. The purpose of the issue is to

Repayment/prepayment of certain borrowings and related penalties (Rs 525-crore) and

remaining for general corporate purposes.

Key Risks

Segment concentration risk, DG set business contributes 80% of revenue as of H1 FY26 therefore any slowdown may significantly impact performance.

Heavy reliance on Cummins India Ltd. and Hyundai Heavy Industries Ltd. as suppliers as business with them makes up entire DG set segment revenue.

At the upper price band of Rs 395, Powerica is valued on adjusted P/E of an 28x for FY25 EPS and 19x for FY26E EPS annualized.

The company's topline has improved momentum in H1 FY26, with strong demand visibility for DG sets driven by data centers and rising power demand. Its wind energy business provides higher-margin potential, and strong relationships with global players further enhance growth prospects.

With healthy ROE of 17.5% and an improved D/E ratio, the balance sheet should be able to support project execution in the wind sector.

Hence the brokerage assigns a Subscribe rating for a long-term investment horizon.

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ALSO READ: Powerica IPO: Check Day Two Subscription Details, GMP And More

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