Avana Electrosystems IPO: Strong Demand Sees 131x Subscription

Introduction

The Initial Public Offering (IPO) of Avana Electrosystems Limited, a Bengaluru-based manufacturer of power system equipment, concluded on January 14, 2026, with exceptional investor interest. The ₹35.22 crore public issue was oversubscribed by a remarkable 131.81 times, signaling strong market confidence in the company's growth prospects and business model. The offering, which was open for three days, attracted significant bids across all investor segments, including institutional, non-institutional, and retail categories.

Overwhelming Investor Response

The IPO received bids for 52.46 crore shares against the 39.80 lakh shares on offer, excluding the anchor and market maker portions. The Non-Institutional Investors (NII) category led the demand, with a subscription of 219.02 times. The Retail Individual Investors (RII) portion was also heavily oversubscribed at 137.51 times. The Qualified Institutional Buyers (QIB) category saw a healthy subscription of 54.97 times. The strong response translated into approximately 60,063 applications, underscoring the widespread interest in the issue.

IPO Offering at a Glance

The public issue was a book-building offer comprising a fresh issue of 51.76 lakh shares, aggregating up to ₹30.54 crore, and an Offer for Sale (OFS) of 7.94 lakh shares, amounting to ₹4.69 crore by the existing shareholders.

Company Profile and Business Operations

Established in 2010, Avana Electrosystems Limited specializes in manufacturing customized Control and Relay Panels used for monitoring, control, and protection of power systems. The company's product portfolio covers panels ranging from 11kV to 220kV for various applications, including transmission lines, power transformers, and substations. Avana operates on a B2B model, serving a client base that includes state utilities, EPC contractors, and private players in the power sector. The company runs two manufacturing facilities in the Peenya Industrial Estate in Bengaluru, Karnataka.

Financial Performance Review

Avana Electrosystems has demonstrated consistent financial growth in recent years. For the fiscal year ending March 2025, the company reported a net profit of ₹8.31 crore on a revenue of ₹62.93 crore. This represents a significant increase from FY2024, when it posted a profit of ₹4.02 crore on revenue of ₹53.26 crore. In FY2023, the company's profit after tax stood at ₹0.92 crore on revenue of ₹28.59 crore. This upward trend in both revenue and profitability highlights the company's operational efficiency and growing market presence.

Objectives of the Public Issue

The net proceeds from the fresh issue will be primarily utilized to fund the company's expansion plans. The key objectives are:

• Capital Expenditure: ₹11.55 crore is allocated for setting up a new integrated manufacturing unit.
• Working Capital: ₹8.40 crore will be used to meet the company's growing working capital requirements.
• General Corporate Purposes: The remaining funds will be used for general corporate needs, providing flexibility for future business opportunities.

Grey Market Premium (GMP) Analysis

Ahead of its listing, Avana Electrosystems' shares commanded a strong premium in the grey market. The Grey Market Premium (GMP) was reported to be around ₹15 per share. This indicates that the market expected the shares to list at approximately ₹74, a premium of over 25% to the upper end of the issue price band of ₹59. While GMP is an unofficial indicator and can be volatile, it often reflects the initial market sentiment and demand for the stock.

Key Strengths and Risks

The company's strengths include its experienced promoters, who have over two decades of industry experience, strong in-house design and engineering capabilities, and established relationships with a diverse client base. However, potential risks include a high dependence on government utilities and EPC contractors for revenue, business performance being linked to capital expenditure in the power sector, and risks associated with the timely execution of its new manufacturing facility.

Allotment and Listing Timeline

With the subscription period now closed, investors are awaiting the finalization of the basis of allotment, which is scheduled for January 15, 2026. Refunds for unsuccessful applicants and credit of shares to the demat accounts of successful allottees are expected to be completed by January 16, 2026. The shares of Avana Electrosystems are tentatively scheduled to be listed on the NSE SME platform on January 19, 2026.

Conclusion

The overwhelming subscription for the Avana Electrosystems IPO reflects strong investor appetite for companies with solid fundamentals in the power infrastructure sector. The company's consistent financial growth and clear expansion plans have resonated well with the market. Following a successful public offering, all eyes are now on the share allotment process and the company's debut on the stock exchange.