Unveiling the Parth Electricals & Engineering IPO: A Deep Dive for Investors
The Indian market is abuzz with new investment opportunities, and the upcoming SME IPO of Parth Electricals & Engineering Ltd. is certainly capturing attention. As a company dedicated to power and infrastructure solutions, Parth Electricals presents an intriguing prospect for those looking to expand their portfolios. Let's delve into the details of this Initial Public Offering, analyzing its strengths, understanding its financial standing, and exploring what it means for potential investors.
Understanding Parth Electricals & Engineering Ltd.
Established in 2007, Parth Electricals & Engineering Ltd. has evolved from a service-oriented firm into a prominent manufacturer in the electrical equipment sector. The company specializes in a range of products and services crucial for power distribution and industrial applications.
Their comprehensive offerings include:
- Manufacturing Medium Voltage (MV) switchgear panels, Vacuum Circuit Breaker (VCB) panels, Earth Link Boxes, Control and Relay Panels (CRP), and Compact Substations (CSS).
- Providing installation, testing, commissioning, and turnkey execution services for Air Insulated Substations (AIS) and Gas Insulated Substations (GIS) up to 220kV.
- Undertaking High Voltage (HV) and Extra High Voltage (EHV) cable laying projects.
Parth Electricals boasts an impressive client roster, featuring industry giants like Aditya Birla, Ultratech Cement, L&T, Reliance, Adani, Tata Power, Schneider Electric, BHEL, Tata Steel, Siemens, and Jindal Steel & Power, among others. With a manufacturing facility in Vadodara, Gujarat, and global operations, the company is ISO 9001:2015, 14001, and 45001 certified, underscoring its commitment to quality and safety.
Key IPO Specifications
Here’s a quick overview of the essential details concerning the Parth Electricals & Engineering IPO:
| Detail | Specification |
|---|---|
| IPO Opening Date | Monday, August 4, 2025 |
| IPO Closing Date | Wednesday, August 6, 2025 |
| Issue Price Band | ₹160 to ₹170 per share |
| Face Value | ₹10 per share |
| Minimum Lot Size | 800 Shares |
| Total Issue Size | ₹49.72 Crores (29.25 Lakh Shares) |
| Issue Type | Book-Built Issue (Fresh Capital) |
| Listing At | NSE SME |
| Employee Discount | ₹8.00 per share |
IPO Timeline: A Glimpse into the Schedule
Understanding the timeline is crucial for any potential investor. Here’s when key events are expected to occur:
Investor Categories and Lot Sizes
The IPO allocates shares across various investor categories. Here's how the shares are distributed and the minimum investment required:
| Investor Category | Shares Offered | Percentage |
|---|---|---|
| Market Maker | 1,46,400 | 5.01% |
| Qualified Institutional Buyers (QIB) | 13,53,600 | 46.28% |
| Non-Institutional Investors (NII/HNI) | 4,07,200 | 13.92% |
| Retail Individual Investors (RII) | 9,48,800 | 32.44% |
| Employee Reservation | 68,800 | 2.35% |
| Total Shares Offered | 29,24,800 | 100.00% |
Here’s a detailed breakdown of the lot sizes and corresponding investment amounts for different investor categories:
| Application Category | Lots | Shares | Amount (₹) |
|---|---|---|---|
| Individual Retail Investor (Min/Max) | 2 | 1,600 | 2,72,000 |
| Small HNI (Min) | 3 | 2,400 | 4,08,000 |
| Small HNI (Max) | 7 | 5,600 | 9,52,000 |
| Big HNI (Min) | 8 | 6,400 | 10,88,000 |
| Employee (Min) | 2 | 1,600 | 2,72,000 |
| Employee (Max) | 1 | 800 | 1,36,000 |
*Note: Bidding at cut-off price is generally not allowed for any category.*
Financial Performance and Valuation Insights
Analyzing a company's financial health is paramount before investing. Parth Electricals has shown impressive growth in recent years.
| Period Ended (March 31) | FY2023 (₹ Cr) | FY2024 (₹ Cr) | FY2025 (₹ Cr) |
|---|---|---|---|
| Assets | 50.70 | 66.53 | 106.76 |
| Revenue | 65.70 | 87.17 | 176.20 |
| Profit After Tax (PAT) | 2.45 | 4.61 | 10.12 |
| EBITDA | 4.31 | 9.05 | 17.53 |
| Net Worth | 9.58 | 14.50 | 40.59 |
| Total Borrowing | 8.43 | 15.84 | 33.33 |
The company’s revenue surged by 102% and Profit After Tax (PAT) by 119% between FY2024 and FY2025, indicating strong operational efficiency and market demand.
Key Performance Metrics (KPIs)
As of March 31, 2025, the company's market capitalization stands at ₹232.36 Crores. Here are other crucial KPIs:
| Metric | Value |
|---|---|
| Return on Equity (ROE) | 24.92% |
| Return on Capital Employed (ROCE) | 23.38% |
| Debt/Equity Ratio | 0.82 |
| PAT Margin | 5.79% |
| EBITDA Margin | 10.04% |
| Price to Book Value (P/BV) | 4.13 |
The Debt/Equity ratio of 0.82 indicates a manageable debt level, while healthy ROE and ROCE figures suggest efficient utilization of shareholder funds and capital.
Purpose of the IPO Proceeds
Parth Electricals & Engineering Ltd. intends to utilize the net proceeds from this IPO for several strategic initiatives aimed at future growth and strengthening its financial position:
- Establishing a new GIS (Gas Insulated Substation) manufacturing facility in Gujarat.
- Setting up another manufacturing facility in Odisha to expand geographical reach and production capacity.
- Repaying certain short-term borrowings, which will help in debt reduction and improve financial leverage.
- Meeting general corporate purposes, ensuring operational flexibility.
Anchor Investor Participation and Promoter Holdings
Anchor investors play a significant role in instilling confidence in an IPO.
- Parth Electricals IPO successfully raised ₹13.80 crore from anchor investors on August 1, 2025.
- These shares (8,12,000) are subject to a lock-in period: 50% for 30 days (till September 6, 2025) and the remaining for 90 days (till November 5, 2025).
The promoters of the company are Mr. Jigneshkumar Gordhanbhai Patel and Ms. Jemini Jigneshkumar Patel. Their shareholding will see a change post-IPO:
- Pre-Issue Promoter Holding: 79.60%
- Post-Issue Promoter Holding: 62.57%
SWOT Analysis: A Holistic View
A comprehensive evaluation of the company's internal and external factors is essential for informed decision-making.
Strengths:
- Strong Financial Growth: Demonstrated exceptional year-on-year growth in both revenue and profit.
- Diverse Product & Service Portfolio: Offers a wide range of electrical equipment and end-to-end project execution services, reducing reliance on a single segment.
- Reputable Clientele: Collaboration with leading industrial and infrastructure players highlights market trust and robust business relationships.
- Quality Assurance: ISO certifications underscore a commitment to high operational and safety standards.
- Global Reach: Presence in international markets indicates broader growth potential and diversified revenue streams.
- Strategic Business Partnerships: Existing tie-ups can enhance operational efficiency and profitability.
Weaknesses:
- Increasing Debt Levels: While manageable, the rising total borrowing requires careful monitoring.
- SME Market Dynamics: Listing on the SME platform might entail lower liquidity compared to the mainboard.
- Project-Based Revenue Volatility: Dependence on large project cycles can lead to fluctuations in revenue if new projects are delayed or cancelled.
Opportunities:
- Booming Infrastructure Sector: India's continuous investment in power, industrial, and infrastructure development promises sustained demand.
- Government Push for Renewable Energy: Growth in solar, wind, and other green energy projects creates new demand for electrical infrastructure.
- Expansion into New Regions: New facilities in Gujarat and Odisha open doors to untapped markets and increased manufacturing capacity.
- Technological Integration: Scope to adopt advanced technologies for enhanced product development and operational efficiency.
Threats:
- Intense Competition: The electrical equipment and project execution sector is highly competitive with many established players.
- Fluctuating Raw Material Costs: Volatility in commodity prices can impact profit margins.
- Regulatory and Policy Changes: New government policies or environmental regulations could affect business operations and project timelines.
- Economic Downturns: Broader economic slowdowns can reduce industrial activity and infrastructure investments.
Important Contacts for Investors
For further queries or information, you can reach out to the company or the IPO registrar:
Company Contact Information:
Parth Electricals & Engineering Ltd.
301, Riddhi-Siddhi Elanza, Near Dominos, Subhanpura
Vadodara, Gujarat, 390023
Phone: 0265 2291922
Email: cs@parthelectricals.in
Website: http://www.parthelectricals.in/
IPO Registrar Details:
Kfin Technologies Limited
Phone: 04067162222, 04079611000
Email: peel.ipo@kfintech.com
Website: https://kosmic.kfintech.com/ipostatus/
Concluding Thoughts: Evaluating the Opportunity
Parth Electricals & Engineering Ltd. presents a compelling case for investment, backed by strong financial growth, a diverse portfolio, and strategic expansion plans. The company’s focus on the growing electrical and infrastructure sectors positions it well for future opportunities.
As with any investment, it's advisable for potential investors to conduct thorough due diligence, consider the associated risks, and align the opportunity with their individual investment goals and risk appetite. The detailed financials and future objectives provide a solid foundation for your research into this promising SME IPO.