Atlanta Electricals IPO: Riding the Power Infrastructure Wave – Should You Subscribe?

At a Glance

Company and Business Operations

Atlanta Electricals Limited, incorporated in 1988 as a private company and converted to a public limited company in 2024, is a leading Indian transformer manufacturer. It manufactures power, auto and inverter-duty transformers along with furnace and generator transformers. The company’s product range spans 5 MVA/11 kV up to 200 MVA/220 kV transformers, catering to utilities, industrial and renewable energy customers across India. It operates multiple manufacturing plants in Gujarat and Karnataka. In FY2024-25, Atlanta Electricals reported consolidated revenue of Rs 1,244.18 crore and PAT of Rs 118.65 crore.
 

Industry Outlook

The transformer industry is benefiting from accelerating power demand globally. According to the RHP, the global transformer market is growing at roughly 6–7 per cent CAGR (2024–30). In India, sustained investments in power infrastructure and renewables drive even stronger growth. Crisil projects a 21–22 per cent CAGR (2025–30) for India’s power transformer market. The total domestic market (≤200 MVA/220 kV) is estimated at around Rs 13,500 crore(FY2025), with future expansion fueled by government schemes and grid upgrades. These tailwinds (renewable integration, transmission build-out) bode well for Atlanta’s business.
 

Objects of the Issue

- Repayment/pre-payment of debt: Rs 79.12 crore 
- Funding working capital requirements: Rs 210.00 crore 
- General corporate purposes: balance of net proceeds 
 

SWOT Analysis

- Strengths: Diversified product range and over 30 years of experience, with marquee clients in utilities and renewables. Strong revenue growth and robust order execution. Low debt levels post-issue. 
- Weaknesses: Highly working-capital intensive business and customer concentration risk. Limited diversification beyond transformers. 
- Opportunities: India’s transformer market (~Rs 12,800 crore in FY2025) is growing rapidly, driven by power and renewable expansion. Capacity expansion will support growth.  
- Threats: Intense competition, volatility in raw material prices, forex risks, and cyclical industry exposure. 
 

Financial Performance

Profit & Loss (Rs crore)

(Source: Company RHP)

Balance Sheet (Rs crore)

(Source: Company RHP)

Working Capital & Cash Position (Rs crore)

(Source: Company RHP)

Peer Comparison (Post-issue)

(Source: Screener.in and company RHP)

Outlook & Relative Valuation

Atlanta Electricals has demonstrated robust growth, with FY2025 revenue rising 43% to Rs 1,244 crore and PAT nearly doubling to Rs 118.6 crore. Short-term visibility is strong with an order book of Rs 1,642.96 crore, 82% of which is from public sector clients. Long-term, India’s transformer market is projected to grow at 20-22 per cent CAGR through 2030, driven by rising power consumption, grid modernization, and renewable integration. Globally, electrification and grid upgrades provide sustained growth opportunities.

On valuation, the IPO is priced at a P/E of ~48.9x FY25 earnings, above Voltamp (~23x) and Danish Power (~29.8x) but lower than TRIL (~62x). Its EV/EBITDA at 29x is higher than Voltamp (16.4x) and Danish (18.2x), reflecting premium pricing. On P/S, Atlanta at 4.66x is slightly above Voltamp (3.89x) and Danish (4.08x), though lower than TRIL (7.20x). Its P/B of 4.57x is in line with Voltamp (4.77x) but at a discount to Danish (5.41x) and TRIL (12.8x). Return ratios remain attractive with ROE 15.8%, ROCE 28.9%, and ROA 9.4%, broadly comparable to peers. With low leverage (0.21x debt/equity), Atlanta combines healthy fundamentals with growth visibility. While valuations are steep relative to Voltamp, its superior growth profile and sector tailwinds justify a premium.

Recommendation

Avoid for now– Atlanta Electricals presents a solid investment opportunity in the transformer sector, with a strong order book, scalable capacity, and consistent double-digit return ratios. However, priced at a premium (~49x FY25 P/E), which limits its upside potential. Therefore, listed players provided a better entry price for exposure to this sector, benefiting from the sectoral tailwind.