Fresh Issue of Rs 400 crore & OFS of Rs 287.34 crore: Transformers Company Powers Up on BSE & NSE; Lists at 14.55% Premium

On Monday, shares of Atlanta Electricals Ltd get listed on the stock exchanges, that is BSE and the NSE. On BSE, the stock is listed at Rs 863.70 per share and on NSE, the stock is listed at Rs 865 per share. The IPO was oversubscribed 72.16 times overall. The QIB portion saw the highest subscription at 194.77 times, followed by retail investors at 10.76 times and Non-Institutional Buyers (NIIs) at 55.82 times.

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The Initial Public Offering (IPO) for Atlanta Electricals Limited, a major Indian transformer manufacturer, is set to raise Rs 687.34 crore. This includes a fresh issue of Rs 400 crore and an Offer for Sale (OFS) of Rs 287.34 crore. The proceeds from the fresh issue will primarily be used for funding working capital requirements (Rs 210 crore) and repaying/pre-paying debt (Rs 79.12 crore). The company, which specialises in a range of transformers (from 5 MVA/11 kV up to 200 MVA/220 kV), has demonstrated robust financial growth, reporting a consolidated revenue of Rs 1,244.18 crore and a PAT of Rs 118.65 crore for FY2025.

Atlanta Electricals is well-positioned to capitalise on significant industry expansion. While the global transformer market is projected to grow at a 6-7 per cent CAGR through 2030, the domestic market benefits from even stronger tailwinds. Sustained investment in power infrastructure, grid upgrades, and the integration of renewables in India is expected to drive the power transformer market at a robust 21-22 per cent CAGR over the same period. The company has strong short-term visibility, backed by an impressive order book of Rs 1,642.96 crore. Key strengths include a diversified product range, over 30 years of experience, and low post-issue debt, though it faces risks like intense competition and high working-capital intensity.

The IPO is priced in the band of Rs 718 – 754 per share, translating to a P/E multiple of approximately 48.9x based on FY2025 earnings. This valuation is notably higher than peers like Voltamp Transformers (23x) and Danish Power (29.8x), but lower than Transformers & Rectifiers (62x). Atlanta's attractive return ratios, including an ROE of 16 per cent and ROCE of 29 per cent, combined with low leverage (0.21x Debt/Equity), support a premium valuation. While the pricing is steep, its superior growth trajectory (FY2025 revenue up 43 per cent) and strong alignment with India's high-growth power sector make it an attractive, albeit premium-priced, offering.

Disclaimer: The article is for informational purposes only and not investment advice.