Swastika Infra IPO (23 Sep-25 Sep) Analysis

Power Transmission and Distribution EPC  |  Mainboard IPO  |  BSE and NSE

Based on the Red Herring Prospectus (RHP) filed by Swastika Infra Limited, September 2026

STATUS: OPEN FOR SUBSCRIPTION  |  Issue Dates: September 23 to 25, 2026  |  Fresh Issue + OFS  |  BSE and NSE

Swastika Infra Limited is a Jaipur, Rajasthan based Engineering, Procurement and Construction (EPC) company specialising in transmission and distribution (T&D) infrastructure for the power sector.

The company traces its origins to a partnership firm established in 1969 and pivoted to EPC work in 2012 before being incorporated in its present corporate form in January 2019 (CIN: U51909RJ2019PLC065892). The promoter group comprises Babulal Gupta, Vinay Gupta, Ruchira Gupta, and Vatsalya Gupta, with Vinay Gupta serving as Managing Director, Biren Parnami as CFO, and Manoj Modi as COO.

The company has delivered 36 completed EPC projects to date and laid 18,579.47 kilometres of distribution lines across nine states including Rajasthan, Madhya Pradesh, Maharashtra, Bihar, Jharkhand, and Uttar Pradesh.

The company designs, procures materials, and constructs power infrastructure across four primary work categories: overhead transmission lines, underground cable laying, substation erection, and associated civil and electrical works.

Its client base is overwhelmingly public sector, comprising state electricity distribution companies (DISCOMs), central public sector entities (PSEs), and state government agencies. Approximately 96.87% of FY2026 revenues were derived from government utilities and public entities.

A portion of contracts are funded by multilateral agencies including the World Bank, providing access to large, long-duration assignments with creditworthy counterparties. This government-dominated client profile provides revenue stability but creates dependency on policy allocation and budget cycles.

Swastika Infra operates on a deliberately asset-light model. Fixed asset turnover reached 70.72x in FY2026, reflecting the company strategy of owning limited physical assets and instead leveraging an experienced project management workforce and a network of subcontractors for on-site execution.

This model preserves capital flexibility, reduces execution risk relative to asset-heavy peers, and allows rapid scaling of project throughput without proportionate capital expenditure. Net working capital constituted 50.76% of revenues in FY2026, however, reflecting the intense receivables and material procurement funding requirements inherent in the power EPC business.

Revenue from operations grew from Rs. 20,957.53 Lakhs in FY2024 to Rs. 50,357.32 Lakhs in FY2026, a two-year CAGR of 55.01%. PAT expanded from Rs. 1,398.21 Lakhs to Rs. 4,142.80 Lakhs over the same period, a CAGR of 72.13%.

EBITDA margins improved from 11.31% in FY2024 to 14.07% in FY2026, reflecting operating leverage. The balance work value including new orders received stands at approximately Rs. 91,655 Lakhs, providing strong revenue visibility for the coming two to three years.

IPO BASICS

Parameter	Details
Document Type	This analysis is based on the Red Herring Prospectus (RHP) filed by Swastika Infra Limited for a mainboard IPO on the BSE (Designated Exchange) and NSE. The company has completed a pre-IPO placement of Rs. 4,000 Lakhs at Rs. 165 per share to 78 allottees, generating net proceeds of Rs. 3,809.08 Lakhs that have already been deployed towards working capital requirements.
Issue Structure	The IPO comprises a Fresh Issue of Rs. 12,900 Lakhs and an Offer for Sale (OFS) of up to 17,50,000 equity shares by selling shareholders. Proceeds from the OFS accrue entirely to the selling shareholders. The company will receive only the fresh issue proceeds net of issue expenses, which will be applied towards working capital and general corporate purposes as described in Section 3.
Face Value	Rs. 10 per equity share. The issue price will be determined through the book-building process and will be announced prior to opening.
Promoters	Four individual promoters: Babulal Gupta, Vinay Gupta, Ruchira Gupta, and Vatsalya Gupta. Vinay Gupta serves as the Managing Director responsible for day-to-day operations. The promoter holding percentages are not individually stated in the extracted data but collectively the promoter group forms the controlling block of the company.
Key Management	Vinay Gupta (Managing Director), Biren Parnami (Chief Financial Officer), and Manoj Modi (Chief Operating Officer). The CFO and COO complement the promoter-driven leadership with functional domain expertise in finance and project execution respectively.
Lead Managers (BRLMs)	Srujan Alpha Capital Advisors LLP and PhillipCapital (India) Private Limited are the Book Running Lead Managers for this issue. PhillipCapital is a well-established institution in the Indian capital markets with a track record of managing multiple SME and mainboard IPOs.
Registrar	MUFG Intime India Private Limited (formerly Link Intime India Private Limited) is the registrar to the issue. MUFG Intime is one of the largest registrar and transfer agents in India with extensive mainboard IPO experience.
Key Dates	Anchor Investor Date: September 22, 2026. IPO Open Date: September 23, 2026. IPO Close Date: September 25, 2026. Listing on BSE (Designated Exchange) and NSE to follow allotment and refund processing.

Swastika Infra is pursuing a mainboard listing on both BSE and NSE, distinguishing it from the SME platform issuers that dominate this analysis batch. The combined fresh issue and OFS structure means a portion of secondary capital redistribution is occurring alongside primary capital raise.

The Rs. 12,900 Lakh fresh issue is directed entirely to working capital, reflecting the capital-intensive nature of power EPC contracting. The pre-IPO placement of Rs. 4,000 Lakhs at Rs. 165 per share to 78 allottees has already been deployed, meaning the IPO price discovery will occur against an established pre-IPO reference price.

The involvement of PhillipCapital as BRLM and MUFG Intime as registrar signals institutional quality in the transaction management. These are among the larger intermediaries in Indian equity markets and bring credibility to the issue process.

The two-BRLM structure is typical for mid-sized mainboard offerings and provides dual institutional coverage for the book-building effort.

USE OF PROCEEDS

Object of the Issue	Amount (Rs. Lakhs)	Details and Rationale
Working Capital Funding	9,000.00	The primary deployment objective is augmenting working capital. Power EPC projects require substantial upfront procurement of materials (cables, conductors, transformers, civil materials) before billing milestones are reached. State utility clients have extended payment cycles, creating a structural working capital gap. At FY2026 revenues of Rs. 50,357.32 Lakhs and net working capital of 50.76% of revenues, the company requires approximately Rs. 25,500 Lakhs of working capital support at current scale. The Rs. 9,000 Lakh IPO allocation, together with the Rs. 3,809.08 Lakhs from the pre-IPO placement already deployed, will partially reduce the dependence on short-term bank borrowings for working capital funding.
General Corporate Purposes	Balance (up to 25% of gross proceeds)	The balance of fresh issue net proceeds, subject to a ceiling of 25% of gross proceeds as permitted under SEBI regulations, will be deployed for general corporate purposes. This is a residual, open-ended allocation that provides management flexibility for strategic investments, technology upgrades, brand development, and other operational needs not specifically identified at the time of the RHP filing. It is common for EPC companies to retain this flexibility given the unpredictability of large-project ancillary expenditure.
Pre-IPO Placement (Already Deployed)	3,809.08	The company completed a pre-IPO placement of Rs. 4,000 Lakhs (net proceeds Rs. 3,809.08 Lakhs) at Rs. 165 per share to 78 allottees prior to the IPO. These proceeds have already been deployed towards working capital requirements and are not available for re-deployment from the IPO. This pre-IPO infusion has contributed to the improvement in the debt-to-equity ratio from 1.44x in FY2025 to 0.73x in FY2026 and has partially funded the working capital requirements of the expanded FY2026 revenue base.

The use of proceeds structure for Swastika Infra is straightforward and dominated by working capital funding. Power EPC is a fundamentally working capital-intensive business.

Materials must be procured and deployed months before the associated billing milestone is reached; government clients follow payment cycles tied to audit, measurement, and budget release processes that can span 60 to 180 days.

Outstanding bank guarantees of Rs. 27,267.93 Lakhs (which exceed the company net worth of Rs. 15,677.82 Lakhs) further illustrate the scale of contingent financial commitments required to participate in government tendering.

The absence of a capital expenditure line in the use of proceeds is consistent with the asset-light EPC model. Swastika Infra does not own heavy construction equipment or manufacturing facilities; its assets are primarily receivables, work-in-progress, and inventory.

The fixed asset base is deliberately lean (fixed asset turnover of 70.72x in FY2026), which means capex is not the growth enabler here. Growth is funded by working capital capacity, and the IPO is appropriately structured to address that need.

Investors should assess whether Rs. 9,000 Lakhs will be sufficient to fund the next phase of growth if revenues continue to grow at 30 to 40% annually from the FY2026 base of Rs. 50,357.32 Lakhs.

FINANCIAL PERFORMANCE

Revenue and Profitability

Particulars	FY2024 (Audited)	FY2025 (Audited)	FY2026 (Audited)	Key Observation
Revenue from Operations (Rs. Lakhs)	20,957.53	35,075.82	50,357.32	55.01% CAGR over two years; absolute scale reached Rs. 50,000+ Lakhs
EBITDA (Rs. Lakhs)	2,370.96	4,388.76	7,084.55	85.0% growth from FY2024 to FY2026; operating leverage visible
EBITDA Margin (%)	11.31%	12.51%	14.07%	Consistent margin expansion of 276 bps over two years
Profit After Tax (Rs. Lakhs)	1,398.21	2,744.55	4,142.80	72.13% PAT CAGR; FY2025 grew 96.3%, FY2026 grew 50.95%
PAT Margin (%)	6.67%	7.82%	8.23%	Steady expansion from 6.67% to 8.23% reflects scale benefits
Basic EPS (Rs. 10 FV)	5.65	11.09	15.70	Near trebling in EPS over two years
ROE (%)	32.84%	43.36%	35.44%	FY2025 spike reflects leverage; FY2026 moderation with equity infusion
ROCE (%)	25.15%	23.14%	25.76%	Stable and above 23% throughout; consistent capital deployment quality
Order Book (Rs. Lakhs)	39,139.13	65,022.73	68,743.52	Book-to-revenue ratio of 1.37x at FY2026 end; balance work Rs. 91,655 Lakhs

The financial performance of Swastika Infra over FY2024 to FY2026 is defined by rapid revenue scaling combined with consistent margin expansion. Revenue grew at a 55.01% CAGR from Rs. 20,957.53 Lakhs to Rs. 50,357.32 Lakhs, an increase of Rs. 29,399.79 Lakhs (140.3% absolute growth) in two years.

This growth reflects both successful new project wins and execution of a rapidly expanding order book. EBITDA margins improved from 11.31% to 14.07%, a 276 basis point expansion that demonstrates genuine operating leverage: fixed costs such as management salaries, office infrastructure, and depreciation were spread over a significantly larger revenue base.

PAT grew even faster at a CAGR of 72.13%, from Rs. 1,398.21 Lakhs to Rs. 4,142.80 Lakhs, as the combination of revenue scale and margin improvement compounded.

The EPS progression from Rs. 5.65 in FY2024 to Rs. 15.70 in FY2026 reflects both earnings growth and changes in the share capital base. ROE declined from 43.36% in FY2025 to 35.44% in FY2026, primarily because the equity base expanded substantially following the pre-IPO placement infusion; this is a mathematical dilution of ROE, not a deterioration in business quality.

ROCE remained stable at 25.15% to 25.76%, confirming that capital deployment quality has been consistent. The order book of Rs. 68,743.52 Lakhs at FY2026 year-end and a broader balance work value of Rs. 91,655 Lakhs indicate that the revenue pipeline for FY2027 and beyond is well-supported.

Balance Sheet and Cash Flow

Particulars	FY2024	FY2025	FY2026
Net Worth (Rs. Lakhs)	4,956.95	7,701.73	15,677.82
NAV per Share (Rs.)	20.03	31.12	57.69
Debt-to-Equity Ratio	0.88x	1.44x	0.73x
Net Working Capital (% of Revenue)	N.A.	N.A.	50.76%
Operating Cash Flow (Rs. Lakhs)	(334.25)	7,653.52	(965.21)
Outstanding Bank Guarantees (Rs. Lakhs)	N.A.	N.A.	27,267.93

The balance sheet position of Swastika Infra reflects the hallmarks of a fast-growing EPC company: strong net worth expansion, debt reduction following equity infusion, but lumpy and occasionally negative operating cash flows.

Net worth expanded from Rs. 4,956.95 Lakhs in FY2024 to Rs. 15,677.82 Lakhs in FY2026, driven by retained earnings and the pre-IPO equity placement. NAV per share grew from Rs. 20.03 to Rs. 57.69, a near three-fold increase that illustrates book value compounding.

The debt-to-equity ratio improved sharply from 1.44x in FY2025 to 0.73x in FY2026, following the equity infusion; at 0.73x, the balance sheet has meaningful capacity to take on project-related debt without excessive financial risk.

Operating cash flows present a more complex picture. The negative OCF in FY2024 (Rs. 334.25 Lakhs outflow) and FY2026 (Rs. 965.21 Lakhs outflow) contrasts with the exceptional FY2025 surplus of Rs. 7,653.52 Lakhs.

This cyclicality is characteristic of project-based EPC businesses where government client collections arrive in large lumpy tranches tied to project milestones and budget release cycles rather than on regular schedules. Investors should not interpret FY2026 negative OCF as evidence of deteriorating collections; it is more likely a timing mismatch in a period of rapid revenue scaling.

The outstanding bank guarantee exposure of Rs. 27,267.93 Lakhs is, however, a material concern: it exceeds the net worth of Rs. 15,677.82 Lakhs and represents a significant contingent liability that could crystallise if project performance falls short of contractual standards.

PEER COMPARISON

Company	CMP (Rs.)	EPS (Rs.)	P/E (x)	RONW (%)	NAV (Rs.)
Rajesh Power Services Limited	804.0	79.5	10.1x	35.3%	225.6
Vikran Engineering Limited	59.2	4.1	14.6x	7.4%	48.0
Industry Average P/E			12.35x
Swastika Infra Limited (Issuer)	Price Band TBD	15.70	N.A.	35.44%	57.69

Note: Face value for Rajesh Power Services and Swastika Infra is Rs. 10 per share. Vikran Engineering has a face value of Rs. 1 per share. The industry average P/E of 12.35x is derived from the two listed peers identified in the RHP. Swastika Infra EPS is based on FY2026 audited results.

The peer set identified in the RHP is limited to two listed companies: Rajesh Power Services Limited and Vikran Engineering Limited. The contrast between the two peers is striking. Rajesh Power Services trades at Rs. 804 with an EPS of Rs. 79.5, a P/E of 10.1x, and RONW of 35.3%, reflecting a well-established and efficiently run power EPC business.

Vikran Engineering trades at Rs. 59.2 with an EPS of Rs. 4.1, a P/E of 14.6x, and a much lower RONW of 7.4%, suggesting a less profitable or earlier-stage comparable. Swastika Infra RONW of 35.44% is virtually identical to Rajesh Power Services (35.3%) and dramatically higher than Vikran Engineering (7.4%), positioning it firmly in the higher-quality tier of the peer group.

The issue price band is yet to be finalised as of this analysis. At the pre-IPO placement price of Rs. 165 per share and FY2026 EPS of Rs. 15.70, the implied trailing P/E at pre-IPO price is approximately 10.5x, which is in line with the industry average P/E of 12.35x from the peer set.

The NAV per share of Rs. 57.69 provides a book value floor reference. If the issue price is set near or above the pre-IPO placement price of Rs. 165, it would imply a price-to-book multiple of approximately 2.9x, which is not unreasonable for a company with 35.44% RONW. Investors should compare the final issue price against the industry P/E range of 10.1x to 14.6x when pricing is announced.

KEY RISKS

Extreme government client concentration at 96.87% of revenues.  Nearly the entirety of FY2026 revenues were derived from government utilities and public sector entities. Any adverse change in central or state government power sector spending, budget allocation cuts, policy reversals, or DISCOM financial stress could materially reduce order inflows and revenue. The company has no private sector buffer to absorb a public sector slowdown.

Negative operating cash flows in two of the three most recent fiscal years.  OCF was negative at Rs. 334.25 Lakhs in FY2024 and Rs. 965.21 Lakhs in FY2026, reflecting the structural mismatch between material procurement timing and government client payment cycles. While FY2025 saw Rs. 7,653.52 Lakhs of positive OCF, the alternating pattern signals ongoing working capital pressure and potential liquidity constraints if collections are delayed.

Outstanding bank guarantees of Rs. 27,267.93 Lakhs exceed net worth.  The contingent liability from outstanding bank guarantees (Rs. 27,267.93 Lakhs) exceeds the company net worth (Rs. 15,677.82 Lakhs) by approximately 74%. If a significant number of these guarantees are called due to project defaults, cost overruns, or delays, the resulting financial impact could be severe. Guarantee encashment events are rare but not unknown in government EPC contracts.

Top two projects constitute 41.83% of the total order book.  High concentration in a small number of large contracts means that a single project cancellation, scope reduction, or long-running dispute could cause a disproportionate revenue shortfall. Unlike a company with 50 small contracts of equal size, Swastika Infra revenue profile has significant single-project exposure.

Net working capital intensity of 50.76% of revenues creates structural funding pressure.  At FY2026 revenues of Rs. 50,357.32 Lakhs, net working capital requirements are approximately Rs. 25,500 Lakhs. As the company scales toward the Rs. 91,655 Lakh balance work value over the next one to two years, working capital requirements will increase proportionately. The Rs. 9,000 Lakh IPO allocation may be insufficient to fund the full working capital need of a 30 to 40% revenue growth scenario.

Low bid acceptance rate of 29% in FY2026 indicates competitive pressure.  The company won contracts representing only 29% of the value of bids submitted in FY2026. While a focus on pricing discipline may explain some of the rejections, a persistently low win rate also indicates that Swastika Infra faces significant competition in government tenders. Future order book replenishment cannot be assumed at historical levels.

Project implementation delays of 6 to 12 months have been recurring.  Delays due to land acquisition issues, material supply disruptions, and regulatory approvals were reported across recent fiscal years. Such delays affect revenue and margin recognition, extend the working capital cycle, and may attract penalty clauses from clients. The company operates across nine states, increasing the complexity of managing approvals and site conditions simultaneously.

Past secretarial and regulatory compliance lapses disclosed.  The company has disclosed e-form filing delays and other secretarial non-compliances. While these have been addressed and are categorised as minor, a pattern of compliance lapses could attract regulatory scrutiny, increase the cost of future capital market transactions, and signal governance quality concerns.

Pre-IPO placement at Rs. 165 creates reference pricing overhang.  The 78 allottees who received shares at Rs. 165 in the pre-IPO placement will have an incentive to exit at or above this price post-listing lock-in expiry. If the IPO pricing is set near Rs. 165, post-listing supply from unlocking pre-IPO allottees could create selling pressure in the secondary market within 6 to 12 months of listing.

KEY POSITIVES

Revenue CAGR of 55.01% and PAT CAGR of 72.13% over FY2024 to FY2026 demonstrate exceptional operational execution.  Revenue grew from Rs. 20,957.53 Lakhs to Rs. 50,357.32 Lakhs and PAT from Rs. 1,398.21 Lakhs to Rs. 4,142.80 Lakhs in just two years. This growth rate far exceeds the EPC sector average and reflects successful scaling across multiple states and project types simultaneously.

EBITDA margin expanded from 11.31% to 14.07% over three years.  The 276 basis point margin expansion demonstrates genuine operating leverage in the EPC model. Fixed costs are being spread over a meaningfully larger revenue base, and the improving project mix (including larger projects with better margins) is contributing to profitability. PAT margin growth from 6.67% to 8.23% confirms the margin improvement is flowing through to net earnings.

Balance work value of Rs. 91,655 Lakhs provides strong multi-year revenue visibility.  The combination of the reported FY2026 order book of Rs. 68,743.52 Lakhs and subsequently awarded contracts brings total balance work value to approximately Rs. 91,655 Lakhs. At current revenue run rates, this represents nearly 1.8x annual revenue, providing 18 to 24 months of execution pipeline. The order book grew from Rs. 39,139.13 Lakhs in FY2024 to Rs. 68,743.52 Lakhs in FY2026, a 75.6% increase that outpaced revenue growth.

36 completed EPC projects and 18,579.47 km of distribution lines laid validate execution depth.  Swastika Infra has a demonstrated track record of project delivery across diverse geographies including Rajasthan, Madhya Pradesh, Maharashtra, Bihar, Jharkhand, and Uttar Pradesh. Consistent project completion across nine states, varying terrain, and different state utility client systems reflects genuine operational maturity.

World Bank and central government project credentials provide competitive advantage.  Access to World Bank-funded and centrally-sponsored project assignments signals that Swastika Infra has passed the higher due diligence and qualification hurdles required for such contracts. This elevates the company profile relative to state-level-only EPC contractors and opens access to a pipeline of higher-value, long-duration infrastructure assignments.

Asset-light model with 70.72x fixed asset turnover delivers superior capital efficiency.  By relying on subcontractors for field execution and owning minimal fixed assets, the company generates significantly more revenue per rupee of fixed capital than asset-heavy EPC peers. This model allows rapid project ramp-up without capital constraints and reduces depreciation drag on margins. The low fixed asset base also reduces balance sheet risk in a demand slowdown.

Debt-to-equity ratio improved from 1.44x in FY2025 to 0.73x in FY2026.  The equity infusion through the pre-IPO placement has already meaningfully deleveraged the balance sheet. At 0.73x D/E, the company has substantial headroom to take on project-related debt for new contract execution without approaching financial distress levels. The improvement also reduces interest expense as a percentage of EBITDA, supporting further margin expansion.

Mainboard listing on both BSE and NSE enhances liquidity and institutional access.  Unlike SME platform listings, a mainboard listing on BSE and NSE provides access to a much larger investor base including institutional investors, mutual funds, and foreign portfolio investors. This broadens the potential shareholder base, improves secondary market liquidity post-listing, and supports a more robust long-term valuation discovery process.

Diversification into solar EPC and power transmission positions company for energy transition growth.  India energy transition agenda involves trillions of rupees of investment in renewable generation, transmission upgrades, and grid modernisation. A company with demonstrated T&D EPC competency is naturally positioned to participate in solar farm transmission connectivity, grid integration, and substation upgrade contracts. This diversification provides a long-duration growth runway beyond the base power distribution business.

Disclaimer: This report is prepared solely for informational purposes based on the Red Herring Prospectus filed by Swastika Infra Limited with BSE and NSE. It does not constitute investment advice. Investors should read the full RHP carefully and consult registered financial advisors before making any investment decisions.