Powerica IPO Opens March 24, Aims to Raise ₹1,100 Crore

Introduction to Powerica's Public Offering

Power solutions provider Powerica Ltd. is set to enter the public markets with its ₹1,100 crore Initial Public Offering (IPO). The subscription period for the mainboard issue will commence on March 24, 2026, and conclude on March 27, 2026. The company has established a price band of ₹375 to ₹395 per equity share. This public offering has already generated significant interest, particularly after a strong response from institutional investors in its anchor round, signaling confidence in the company's fundamentals and valuation.

Strong Demand from Anchor Investors

Ahead of its IPO, Powerica successfully raised ₹329.40 crore from a diverse group of 17 anchor investors. The company allocated 83.39 lakh equity shares at the upper price band of ₹395 per share. The list of prominent investors includes major domestic mutual funds such as SBI Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, Quant Mutual Fund, and Bandhan Mutual Fund. Additionally, leading insurance companies like Kotak Mahindra Life Insurance, Edelweiss Life Insurance, and Reliance Nippon Life Insurance participated in the anchor book. This robust participation from established institutional players provides a positive outlook for the public issue.

Understanding the IPO Structure

The ₹1,100 crore IPO is a combination of a fresh issue of shares and an Offer for Sale (OFS). The company aims to raise ₹700 crore through the fresh issuance of equity shares. The remaining ₹400 crore constitutes the OFS, where existing promoters, including the Naresh Oberoi Family Trust and the Kabir and Kimaya Family Private Trust, will offload a portion of their stake. The total issue size was revised down from an earlier proposal of ₹1,400 crore, reflecting an adjustment in the OFS component.

Allocation and Lot Size Details

The IPO has a structured allocation plan for different investor categories. 50% of the issue is reserved for Qualified Institutional Buyers (QIBs), 35% is allocated for retail individual investors, and the remaining 15% is set aside for Non-Institutional Investors (NIIs). Retail investors can apply for the IPO in lots, with one lot consisting of 37 shares. At the upper end of the price band (₹395), the minimum investment required for a single lot is ₹14,615.

Utilization of IPO Proceeds

Powerica has outlined clear objectives for the funds raised from the fresh issue. A significant portion, approximately ₹525 crore, will be used for the prepayment or repayment of some of the company's existing borrowings. As of September 30, 2025, the company's total borrowings stood at ₹571.95 crore. This move is expected to strengthen the company's balance sheet by reducing debt and lowering interest expenses. The remaining funds will be allocated for general corporate purposes, providing flexibility for future operational needs and growth initiatives.

A Look at Powerica's Business Operations

Founded in Mumbai, Powerica is an integrated power solutions company specializing in the manufacturing of diesel generator (DG) sets and medium-speed large generators. It is a key Original Equipment Manufacturer (OEM) for Cummins India, producing a wide range of generator sets from 7.5 kVA to 10,000 kVA. The company serves diverse industries and applications. Besides its core generator business, which accounts for over 80% of its revenue, Powerica also has a presence in the wind power sector, offering EPC and maintenance services. The company operates three manufacturing facilities located in Bengaluru, Silvassa, and Khopoli.

Financial Performance Overview

Powerica's financial performance shows a mixed trend. For the fiscal year 2025 (FY25), the company reported a 20% increase in revenue, which grew to ₹2,653.3 crore from ₹2,210 crore in the previous fiscal year. However, its profit after tax (PAT) saw a decline of 26.3%, falling to ₹166.8 crore from ₹226.3 crore in FY24. This reduction in profit was primarily attributed to a significant drop in other income. For the six months ending September 2025, the company recorded a profit of ₹129 crore on revenues of ₹1,447.44 crore.

Market Valuation and Listing Timeline

At the upper price band of ₹395 per share, Powerica is valued at approximately ₹5,000 crore. The allotment of shares is expected to be finalized by March 30, 2026. Following the IPO, the company's shares are scheduled to be listed on both the BSE and the National Stock Exchange (NSE) on April 2, 2026. The book-running lead managers for the issue are ICICI Securities, IIFL Capital Services, and Nuvama Wealth Management.

Conclusion

Powerica's IPO presents an opportunity for investors to participate in a well-established power solutions company. The strong anchor investor demand and the clear plan to reduce debt are positive factors. However, investors should also consider the recent decline in profitability and the company's dependence on the DG set market. The performance of the IPO will be closely watched when it opens for public subscription on March 24.