Powerica IPO Day 3 Highlights: Issue booked 1.45x on strong QIB demand; NII, retail portions undersubscribed — Check GMP

Powerica IPO closed the bidding period with 1.45 times bids. The offer was subscribed 4.50 times by QIBs, 0.44 times by NIIs and 0.15 times by retail investors. The employee quota was booked 1.23 times.

In 2008, the company strategically diversified into the Wind Power Business. As of date, the company owns and operates 12 wind power projects in Gujarat, with a total installed capacity of 330.85 MW. Additionally, the company is constructing a 52.70 MW wind power project in Gujarat, bringing its IPP portfolio to a total installed capacity of 383.55 MW.

Powerica IPO was fully subscribed on the final day of bidding amid heavy demand from QIBs. The QIB segment was subscribed 4.34 times, followed by the NII portion at 0.17 times and the retail quota at 8%.

Powerica IPO was subscribed 86% so far on the final day as QIB segment received a massive 2.8 times bids. NII and retail portion remained heavily undersubscribed.

The company owns and operates 3 manufacturing facilities located in Bengaluru, Karnataka; Silvassa, Dadra and Nagar Haveli; and Khopoli, Maharashtra.

• Integrated power solutions provider with offerings across DG sets and renewable energy.
• Wide product range catering to diverse industrial and commercial power needs.
• Established presence in both conventional and renewable energy segments.
• Diversified capabilities, including EPC and O&M services in wind power.
• Long operating history with experience in power generation and equipment solutions.

The company delivered 20.06% revenue growth to ₹2,653.27 crores in FY25, driven by strong HHP DG set sales and Wind EPC execution, while profitability remains operationally stable despite lower PAT due to absence of one-off gains, with normalized ROE (17.53%) and ROCE (27.02%) reflecting sustainable performance.

A large portion of the IPO comprises an Offer for Sale ( ₹400 crores), providing no direct capital to the company, while from the fresh issue ₹525 crores is allocated toward debt repayment, limiting. funds available for growth initiatives and expansion.

The business remains highly dependent on key OEM relationships, with 70.39% of FY25 revenue linked to Cummins-powered DG sets; any disruption or adverse changes in this long-standing partnership could materially impact operations and profitability.

The company faces high segment concentration, with 85.00% of FY25 revenue from the Generator Set Business, while fixed-tariff wind PPAs limit cost pass-through, potentially pressuring margins over the long term.

— Equivision

The company has high segment concentration, with 85.00% of FY25 revenue derived from its Generator Set Business, increasing dependence on a single segment and exposing earnings to sector-specific risks.

Customer concentration (% of revenue): Top 1 customers contributed 22.60% in H1-FY26, 21.90% in FY25, and 27.00% in FY24. Top 10 customers contributed 93.80% in H1-FY26, 95.00% in FY25, and 95.50% in FY24.

The company has a high dependency on key OEM partnerships, with 70.39% of FY25 revenue linked to Cummins-powered products. Any disruption in its long-standing relationship with Cummins or collaboration with Hyundai could adversely impact operations and revenue stability.

Established in 1984, the company provides diesel generator solutions with a long-standing Cummins India partnership. It offers 7.5–10,000 kVA products, including MSLG systems, supported by three manufacturing facilities and a strong dealer network.

Powerica IPO's employee quota was fully booked on the final day. According to BSE data, employee segment was susbcribed 1.02 times.

A substantial share of revenue (up to ~70%+) is linked to DG sets powered by Cummins, with the company being an exclusive buyer of engines and alternators for a wide capacity range. It also relies on Hyundai for MSLG solutions. Any disruption in supply, pricing changes, or weakening of these relationships can directly impact production, pricing power, and overall revenues.

Strong demand for standby power solutions: Rising urbanization, infrastructure growth, and unreliable grid supply are driving demand for DG sets, UPS, and battery systems across sectors like commercial, manufacturing, telecom, and data centres.

DG sets remain dominant despite green shift: Diesel generators continue to lead due to reliability and quick response, while renewable and hybrid solutions (solar + battery) are emerging as complementary, not replacement, technologies

The company offers a diversified power solutions platform, combining DG sets, MSLG, and renewable energy, supported by its Cummins partnership and strong manufacturing base. Renewable operations provide stable cash flows, while MSLG and EPC projects drive growth visibility.

Key risks include dependence on Cummins, long gestation in MSLG, and regulatory challenges in renewables, along with long-term disruption to DG sets.

At the upper band, valuation appears attractive versus peers, and given its strong positioning and growth outlook, a “SUBSCRIBE for Long-Term Investment” rating is recommended.

— Canara Bank Securities

The public issue comprises a fresh issue of shares worth ₹700 crore and an Offer for Sale (OFS) of ₹400 crore by promoters, as per the red herring prospectus (RHP). Under the OFS, shares will be sold by the Naresh Oberoi Family Trust and Kabir and Kimaya Family Private Trust.

Proceeds from the fresh issue will primarily be used to reduce debt, with ₹525 crore allocated for this purpose, while the remaining funds will be used for general corporate needs.

Powerica IPO was subscribed 4% so far on Day 3 of the bidding process. The QIB quota witnessed some buying.

Powerica is reasonably valued at 24.45x P/E vs higher-valued peers. The company reported inconsistency in its top and bottom lines for the reported periods.

At just 12.76% in FY25, margins are quite modest and declining from 15.38% in FY24 — a red flag for operational efficiency.

Both net profit (-22% YoY) and EBITDA margins are shrinking simultaneously, suggesting rising cost pressures. Revenue grew ~15% YoY in FY25, showing demand traction, but not translating to bottom-line growth.

Apply with Caution; Suitable for risk-tolerant, long-term investors. Not ideal for pure listing gain seekers given declining profits and legal overhangs. Consider applying with a small allocation only.

— Views from Swastika Investmart

Powerica Ltd garnered ₹329.40 crore from anchor investors on Monday, a day before its IPO.

Shares allocations were made to several institutional investors, including SBI Mutual Fund (MF), HDFC MF, ICICI Prudential MF, Quant MF, Bandhan MF, insurance companies such as Kotak Life, Edelweiss Life, and Reliance Nippon Life, according to a circular uploaded on BSE's website.

According to the circular, the company finalised the allocation of 83,39,239 equity shares to anchor investors at ₹395 per share. The total allocation amounts to approximately ₹329.40 crore.

Powerica IPO GMP today is ₹1. This means that shares of Powerica are trading ₹1 above the issue price of ₹395 in the grey market. At the prevailing GMP, Powerica IPO shares are expected to list at just 0.25% premium. The highest GMP for the IPO was ₹13.

The initial public offer of power solutions provider Powerica Ltd was subscribed 3% on the second day of the share sale on Wednesday.

The company's IPO received bids for 5,22,995 shares against 2,05,55,171 shares on offer, according to details available with the NSE.

Retail individual investors' portion subscribed 4 per cent, and the category for non-institutional investors received 1 per cent subscription.