IC Electricals IPO (25-30 June) Analysis
Updated: Aug 11
IPO Analysis | NSE Emerge SME Platform | 100% Book Built Fresh Issue
Based on Red Herring Prospectus dated June 18, 2026 | Railway Power Electronics, Distribution Systems and Electrification | New Delhi
STATUS: RHP FILED | Fresh Issue: up to 48,39,600 Equity Shares | No OFS | Anchor Bidding June 24, Bid/Issue Opens June 25, Closes June 30, 2026 | NSE Emerge SME Platform | New Delhi |
IC Electricals Company Limited (ICEL) is a New Delhi-based manufacturer of railway electrical equipment, serving primarily the Indian Railways ecosystem. The company was originally incorporated as a private limited company on August 5, 2005 under the name IC Electricals Company Private Limited.
It converted to a public limited company on September 23, 2024, following a special resolution passed in August 2024. Its registered office is at 156 DSIDC Okhla Industrial Area Phase I, New Delhi 110020, with a corporate office at DLF Tower-A, Jasola, New Delhi. Its website is www.icelectricals.in. Its Corporate Identity Number is U31909DL2005PLC139412.
Business model: ICEL operates across three distinct business divisions. The first is manufacturing of Power Electronics, Instrumentation, and Distribution Systems, along with Microprocessor-Based Control Systems for railway applications. The second is Rotating Machines manufacturing.
The third is Railway Electrification, delivered on an EPC (Engineering, Procurement, and Construction) basis, which the company itself identifies as its most working-capital-intensive division given the longer project duration and dependency on site availability provided by the railways.
The company holds approved supplier registrations with various professional directorates under the Ministry of Railways, including the Research Designs and Standards Organisation (RDSO), a critical qualification gate for any vendor seeking to supply Indian Railways on a sustained basis.
Heavy government and railway sector dependency: this is the single most defining structural feature of ICEL's business. Revenue from government and railway-affiliated entities (Indian Railways, its zonal railways, public sector undertakings, and other Ministry of Railways-associated organisations, collectively referred to as GoI Entities in the RHP) represented 67.74% of revenue from operations in Fiscal 2024, rising to 81.50% in Fiscal 2025 and 82.01% in Fiscal 2026.
This concentration has grown each year and now represents more than four-fifths of total revenue, making the company's fortunes almost entirely tied to Indian Railways' capital expenditure cycles, procurement policies, and electrification programme pace.
Working capital structure tied to government contracting norms: the company discloses that Indian Railways retains almost 10% of total contract value as a retention deposit, released only after a 2 to 3 year period, creating a substantial and structurally embedded working capital requirement.
The company also requires significant Bank Guarantees, secured by cash margin Fixed Deposits, to participate in and execute government tenders, a further capital-intensive feature of operating primarily as a railway sector government contractor.
Promoters: the promoters of ICEL are Mr. Sunil Kumar Verma, Mrs. Renu Verma, Ms. Aakansha Verma, Ms. Davisha Verma, Mrs. Savita Sachdeva, M/s SHBD LLP, and M/s Safe System India Private Limited, a closely-held family promoter group with both individual and corporate/LLP promoter entities, reflecting a multi-generational family business structure that has been operating since 2005.
Statutory and KPI Certification: KPIs disclosed in this RHP have been certified by M/s K G A R & Co., Chartered Accountants, by certificate dated June 15, 2026, and approved by the Audit Committee on June 13, 2026. The company's Financial Year runs April 1 to March 31, with the most recent reporting period being the full year ended March 31, 2026.
Key Basics
This is a 100% Fresh Issue with no Offer for Sale component, listing on the NSE Emerge SME platform. The RHP is dated June 18, 2026, with bidding dates confirmed, though the Price Band remains undetermined as of this filing. The Issue is being made under Regulation 229(2) and 253(1) of Chapter IX of SEBI ICDR Regulations.
Document Type | Red Herring Prospectus (RHP) dated June 18, 2026. Bidding dates confirmed; Price Band to be announced at least two Working Days prior to the Bid/Issue Opening Date. |
Issue Type | 100% Book Built Fresh Issue of up to 48,39,600 Equity Shares of face value Rs.10 each. No OFS. Company receives full net proceeds after issue expenses. |
Face Value | Rs.10 per Equity Share |
Promoters | Sunil Kumar Verma, Renu Verma, Aakansha Verma, Davisha Verma, Savita Sachdeva, M/s SHBD LLP, and M/s Safe System India Private Limited. A closely-held family promoter group. |
Eligibility | Regulation 229(2) and 253(1) of Chapter IX of SEBI ICDR Regulations. |
Listing Exchange | Emerge Platform of National Stock Exchange of India (NSE Emerge). Approval letter received from NSE dated January 9, 2026. Designated Stock Exchange: NSE. |
Market Maker | 2,42,400 Equity Shares of the Issue reserved for subscription by the Market Maker. Net Issue (excluding Market Maker portion): 45,97,200 shares. |
Post-Issue Dilution | The Issue and Net Issue will constitute 26.50% and 25.17% respectively of post-Issue paid-up equity share capital. |
BRLM | NexGen Financial Solutions Private Limited (sole Book Running Lead Manager). |
Registrar | Skyline Financial Services Private Limited. |
Anchor Bidding | Wednesday, June 24, 2026 (one Working Day prior to Issue Opening Date, subject to participation by Anchor Investors). |
Bid/Issue Opens | Thursday, June 25, 2026. |
Bid/Issue Closes | Tuesday, June 30, 2026. QIB bidding may close one Working Day earlier at the Company's discretion in consultation with the BRLM. |
Listed Industry Peer | Hind Rectifiers Ltd, a substantially larger listed peer used for accounting ratio comparison, with the RHP explicitly noting that, considering the nature and turnover of the Company's business, peers are not strictly comparable. |
This is a 100% Fresh Issue, and the use of proceeds is dominated by working capital funding, a direct and well-explained response to the structural capital intensity of the company's government and railway contracting business, particularly its EPC railway electrification division and the retention money and Bank Guarantee requirements inherent to Indian Railways procurement.
Object | Amount (Rs. Lakhs) | Details |
Funding Working Capital Requirements | 3,360.00 | The company's primary stated use of proceeds, driven principally by its EPC railway electrification division, which has the longest stock holding period among its three business divisions due to extended project durations and dependency on railway-provided site access. Funds will support trade receivables, trade payables, and margin money for Performance and Security Deposit Bank Guarantees. |
General Corporate Purposes | Capped at the lower of 15% of Gross Proceeds or Rs.10 crore (Rs.1,000 lakhs). Intended uses include strategic initiatives, strengthening marketing network and capability, meeting exigencies, and brand building. | |
TOTAL FRESH ISSUE (up to 48,39,600 shares) | 100% Fresh Issue. No OFS. None of the Objects have been independently appraised by any bank or financial institution. |
The RHP provides an unusually detailed and transparent working capital justification, disclosing specific figures for inventory (growing from Rs.7,168.31 lakhs in FY2024 to a projected Rs.9,485.55 lakhs in FY2027), trade payables, EMD and FDR margin requirements, and the structural retention of approximately 10% of contract value by Indian Railways for 2 to 3 years.
This granular disclosure, while reassuring in its specificity, also underscores just how capital-intensive operating as a primary Indian Railways vendor genuinely is, and explains why working capital absorbs the overwhelming majority of this Issue's proceeds rather than capacity expansion or new product development.
Financial Performance
Note: All figures in Rs. lakhs unless stated. Financial periods: Fiscal 2026 (year ended March 31, 2026), Fiscal 2025 (year ended March 31, 2025), Fiscal 2024 (year ended March 31, 2024). Restated Consolidated Financial Statements certified by K G A R & Co. ICEL presents both standalone and consolidated figures; the consolidated figures are used below as the primary basis, consistent with the company's own peer comparison methodology in this RHP.
This is a company with consistently strong revenue growth and improving margins, but a persistent and worsening pattern of negative operating cash flow that investors must weigh carefully.
Revenue, EBITDA, and Profitability (Consolidated)
Metric | FY2026 (Rs. L) | FY2025 (Rs. L) | FY2024 (Rs. L) |
Revenue from Operations | 14,304.15 | 12,188.59 | 9,924.92 |
Revenue Growth % YoY | +17.36% | +22.81% | N/A |
Government / Railway Revenue (% of Total) | 82.01% | 81.50% | 67.74% |
EBITDA | 2,568.94 | 1,848.52 | 1,196.71 |
EBITDA Margin % | 17.96% | 15.17% | 12.06% |
EBITDA Growth % YoY | +38.97% | +54.47% | N/A |
Profit After Tax | 1,407.63 | 937.06 | 452.94 |
PAT Growth % YoY | +50.22% | +106.87% | N/A |
Return on Net Worth (RoNW) % | 24.88% | 23.28% | 15.79% |
Return on Capital Employed % | 18.47% | 17.58% | 15.25% |
Current Ratio (times) | 1.46 | 1.42 | 1.23 |
Operating Cash Flow (Rs. Lakhs) | (1,109.55) | (965.40) | (147.48) |
Basic and Diluted EPS (Rs.) | 10.49 | 7.28 | 3.92 |
Weighted Average EPS (Rs.) | 8.32 (weighted, 3 yrs) | N/A | N/A |
Net Asset Value per Share (Rs.) | 47.40 | 36.91 | 80.41 |
Net Worth (Rs. Lakhs) | 6,361.81 | 4,954.18 | 3,095.63 |
The headline profitability trajectory is consistently strong across all three years. Revenue grew 22.81% (FY2025) and 17.36% (FY2026) on an expanding base, while EBITDA grew even faster, 54.47% and 38.97% respectively, driving EBITDA margin expansion from 12.06% to 15.17% to 17.96% over the period.
PAT growth has been exceptional: 106.87% in Fiscal 2025 and a further 50.22% in Fiscal 2026, taking absolute PAT from Rs.452.94 lakhs to Rs.1,407.63 lakhs in just two years, a more than threefold increase. EPS grew from Rs.3.92 to Rs.10.49 over the same period.
Net Asset Value per Share shows an unusual pattern, falling sharply from Rs.80.41 (FY2024) to Rs.36.91 (FY2025) before partially recovering to Rs.47.40 (FY2026), despite Net Worth growing consistently throughout the period from Rs.3,095.63 lakhs to Rs.6,361.81 lakhs.
This NAV decline is explained by share count changes, the weighted average number of equity shares outstanding grew from 1,15,50,000 (FY2024) to 1,34,22,000 (FY2026), more than doubling the diluted share base, most likely reflecting a bonus issue or fresh share allotment that diluted per-share book value even as aggregate net worth grew. Investors should treat the FY2024 NAV figure as not comparable to the more recent, post-restructuring share base.
Operating Cash Flow is the most important cautionary signal in this entire financial picture. The company posted negative operating cash flow in every one of the three years presented, and the trend is worsening in absolute terms: negative Rs.147.48 lakhs (FY2024), negative Rs.965.40 lakhs (FY2025), and negative Rs.1,109.55 lakhs (FY2026), even as PAT grew strongly across the same period.
The company attributes this to increasing trade receivables and other current assets, consistent with the long-duration EPC railway electrification contracts and the structural retention money dynamics of working with Indian Railways discussed earlier in this report. This divergence between strong reported profit and consistently negative operating cash generation is the central financial risk for prospective investors to understand.
Standalone vs Consolidated: A Quick Note
The RHP discloses both Standalone and Consolidated figures, which are very close to each other across all metrics (for example, FY2026 Standalone Revenue of Rs.14,392.78 lakhs versus Consolidated Revenue of Rs.14,304.15 lakhs), indicating the company's subsidiary or consolidated entities contribute only a marginal difference to the overall financial picture, and the business is overwhelmingly conducted through the parent entity.
How Does It Compare to Peers?
The RHP names Hind Rectifiers Ltd as the comparable listed industry peer, while explicitly cautioning that, considering the nature and turnover of ICEL's business, the peers are not strictly comparable, though included for broader comparison purposes.
Metric | ICEL (FY2026) | Hind Rectifiers Ltd | Industry P/E | |||
Face Value (Rs.) | 10.00 | 2.00 |
| |||
EPS (Rs.) | 10.49 | 59.88 |
| |||
P/E Ratio | 99.50x | High: 99.50x, Low: 99.50x, Avg: 99.50x | ||||
RoNW % | 24.88% | 24.62% |
| |||
NAV per Share (Rs.) | 47.40 | Not disclosed in extract |
| |||
PAT (Rs. Lakhs) | 1,407.63 | 4,500.80 | Hind Rectifiers PAT 3.2x larger | |||
Hind Rectifiers Ltd is a substantially larger company by absolute scale, generating PAT of Rs.4,500.80 lakhs against ICEL's Rs.1,407.63 lakhs, more than three times larger. Despite this scale difference, ICEL's RoNW of 24.88% is essentially in line with Hind Rectifiers' 24.62%, suggesting comparable capital efficiency despite the considerable difference in absolute size.
With only a single named peer and that peer trading at a notably high P/E of 99.50x, the industry P/E benchmark provided in this RHP offers limited practical guidance for valuing ICEL, and investors should treat the peer comparison as indicative of sector quality rather than a precise valuation anchor. If the market applies any meaningful discount to Hind Rectifiers' premium multiple, reflecting ICEL's smaller scale and SME platform listing, a more conservative valuation range would be appropriate.
Key Risks
l Extreme and growing dependency on Indian Railways and government entities: government and railway-affiliated revenue grew from 67.74% (FY2024) to 81.50% (FY2025) to 82.01% (FY2026) of total revenue from operations. This is now the dominant and still-growing share of the business, meaning ICEL's financial performance is almost entirely tied to Indian Railways' capital expenditure cycles, electrification programme pace, procurement policy changes, and budgetary allocations, none of which are within the company's control.
Any reduction in railway sector spending, adverse policy shift, or failure to maintain ICEL's approved vendor and RDSO registration status could materially and immediately affect the business.
l Persistent and worsening negative operating cash flow despite strong and growing reported profitability: the company posted negative operating cash flow in all three years presented, and the absolute negative figure grew substantially, from Rs.147.48 lakhs (FY2024) to Rs.965.40 lakhs (FY2025) to Rs.1,109.55 lakhs (FY2026), even as PAT nearly tripled over the same period. This divergence, driven by growing trade receivables and the long working-capital cycles inherent to government EPC contracting, is the central financial risk in this offering, and is precisely the gap the IPO's Rs.3,360 lakh working capital allocation is intended to address.
l Structural capital lock-up from Indian Railways retention money and Bank Guarantee requirements: Indian Railways retains approximately 10% of total contract value as a retention deposit, released only after 2 to 3 years, creating a substantial and recurring capital lock-up that scales with the company's order book growth. Additionally, the company requires significant Bank Guarantees secured by cash margin Fixed Deposits to participate in and execute government tenders, both features that structurally tie up capital that would otherwise be available for other business purposes, and both expected to grow as the company's revenue and order book expand.
l Promoter personal assets pledged as collateral for working capital facilities: the company discloses that its working capital limits, currently Rs.3,500 lakhs Fund Based and Rs.4,350 lakhs Non-Fund Based with Punjab National Bank, are secured by promoter personal guarantees, with promoters having pledged personal assets including immovable properties as collateral. Any deterioration in the company's ability to service these facilities could place promoter personal assets at risk, creating an additional layer of financial interdependency between the company and its controlling family group.
l Net Asset Value per share decline despite growing net worth signals share count dilution that investors must understand: NAV per share fell from Rs.80.41 (FY2024) to Rs.36.91 (FY2025) before partially recovering to Rs.47.40 (FY2026), even as aggregate Net Worth grew consistently throughout. This reflects a more than doubling of the weighted average equity share count over the period, and investors should ensure they are evaluating the company on a fully diluted, current-share-count basis rather than anchoring to any pre-restructuring historical NAV figures.
l Objects of the Issue have not been independently appraised: as explicitly disclosed in the RHP, neither the working capital allocation nor the general corporate purposes allocation has been appraised by any bank, financial institution, or external agency, meaning the stated amounts rest on management's own internal estimates without independent verification.
l Long EPC project cycles in the railway electrification division create extended working capital lock-up: the company itself identifies this division as having the longest stock holding period of its three business segments, given that project duration depends substantially on site availability provided by Indian Railways, a factor outside the company's direct control and a recurring source of timing unpredictability.
l High P/E single-peer benchmark provides limited valuation guidance: with only Hind Rectifiers Ltd disclosed as a comparable peer, trading at a notably elevated 99.50x P/E, and that company being more than three times larger by PAT, investors have limited reliable market-based reference points for assessing whether ICEL's eventual Issue Price represents fair value.
l Concentration in a single end-customer sector (railways) even though spread across three product divisions: while ICEL's three divisions (power electronics and distribution systems, rotating machines, and railway electrification EPC) provide some internal diversification, all three are ultimately anchored to the same underlying customer base and sector, meaning a sector-wide downturn would likely affect all three divisions simultaneously rather than providing genuine offsetting diversification.
l Trade payable days have been volatile, swinging from 239 days (FY2024, reflecting working capital constraints) to 135 days (FY2025) to 127 days (FY2026), reflecting the company's evolving liquidity position and banking relationships, a pattern investors should monitor for continued stability as the company scales further.
Positives
l Strong and consistently accelerating profitability across every metric disclosed: revenue grew 22.81% and then 17.36% over the two most recent years, while EBITDA grew 54.47% and 38.97%, and PAT grew 106.87% and 50.22%, respectively. This consistent multi-year trend of EBITDA and PAT growing faster than revenue indicates genuine operating leverage and improving cost discipline as the business has scaled.
l EBITDA margin expansion from 12.06% to 17.96% over three years demonstrates meaningfully improving operational efficiency, a particularly notable achievement for a government and railway sector contractor, where margins are often constrained by competitive tendering processes and standardised pricing structures.
l RoNW of 24.88% is essentially on par with the substantially larger listed peer Hind Rectifiers Ltd (24.62%), suggesting ICEL achieves comparable capital efficiency despite operating at roughly one-third the absolute scale, a positive signal for the underlying quality of the business model.
l Approved RDSO and Ministry of Railways supplier registrations represent a meaningful competitive moat: qualifying as an approved vendor under the Research Designs and Standards Organisation and various Ministry of Railways directorates is a multi-year, technically demanding process that creates a genuine barrier to entry for new competitors, helping explain ICEL's sustained and growing share of government railway business.
l Use of proceeds is directly and transparently traceable to a clearly disclosed and well-explained business need: rather than funding speculative diversification, the Rs.3,360 lakh working capital allocation is specifically and granularly justified against disclosed inventory, trade payable, EMD, and retention money dynamics tied to the company's existing, already-profitable EPC and railway electrification operations.
l Growing order book and expanding government relationship suggest continued near-term revenue visibility, with government and railway revenue share rising every year for three consecutive years, indicating ICEL has been successfully winning an increasing share of available railway electrification and electronics contracting opportunities rather than losing ground to competitors.
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