Vidya Wires IPO: Copper and Aluminium Winding Play on Power, Renewables and Electrification: Should You Subscribe?

At a Glance Table

(Source Chittorgarh.in)

Company and its Business Operations

Incorporated in 1981, Vidya Wires Limited manufactures copper and aluminium winding and conductivity products for critical applications in power transmission, electrical equipment, renewables, electric mobility and Railways. Its portfolio includes enameled wires, rectangular strips, paper‑insulated copper conductors, copper busbars, bare copper conductors, specialised winding wires, PV ribbons and aluminium paper‑covered strips. The company operates from Anand, Gujarat, with installed capacity of 19,680 MTPA, proposed to increase to 37,680 MTPA via a new unit under 100 per cent subsidiary ALCU Industries Private Limited near its existing facilities. Vidya Wires supplies over 8,000 SKUs to more than 318 customers across 18‑plus countries on five continents, with no single customer exceeding 9 per cent of revenues, providing a de‑risked and diversified business model.

Industry Outlook

Vidya Wires operates in the Indian winding and conductivity products industry, which supplies copper and aluminium wires, strips, busbars and PV ribbons to power T&D, electrical equipment, renewables, automotive, EVs and industrial machinery. As per the CareEdge industry report in the RHP, India’s market for key segments like bare copper wires, bunch copper conductors, busbars, copper foils and Solar cables is growing at mid‑single to high‑single digit volume CAGRs, driven by grid expansion, renewable additions, 5G rollout and EV adoption. The report indicates Indian power generation capacity is expected to grow at around 8.10 per cent CAGR till Fiscal 2032, supporting sustained demand for winding and conductivity products. Globally, copper and aluminium conductor consumption is expanding in line with energy transition and electrification, benefiting Indian manufacturers with export capabilities such as Vidya Wires.

Objects of the Issue

• Funding capex for new project in subsidiary ALCU: Rs 140.00 crore.​
• Repayment / prepayment of certain borrowings: Rs 100.00 crore.​
• General corporate purposes (balance of net proceeds).

SWOT Analysis

• Strengths: Fourth‑largest player in Indian copper and aluminium winding wire industry by installed capacity with around 5.70 per cent share, poised to become third‑largest post‑expansion. Diversified product basket (8,000‑plus SKUs) and broad customer base across power, electricals, renewables, automotive and engineering reduce concentration risk, while backward integration into copper rod manufacturing supports quality and cost control.​
• Weaknesses: Vidya Wires is exposed to cyclical capex in power, renewables, and industrial sectors, limiting its resilience to downturns. Margins are modest, with a PAT margin of 2.74 per cent and ROCE of 10.71 per cent. Dependence on copper and aluminium subjects the company to commodity price volatility and working capital fluctuations. Additionally, the company faces negative operating cash flow (CFO of -16.84 crore in FY25), highlighting ongoing capital management challenges. While the fresh issue will reduce short-term debt, the company may continue relying on short-term borrowing until cash flow improves.
• Threats: Intense competition from organised wire/cable and specialty conductor manufacturers as well as unorganised players may cap pricing power. Execution risk in the new project, any delay in ramp‑up, and regulatory or ESG‑related tightening on metals and manufacturing could affect returns.

Financial Performance Tables (Figure in Rs crore) (Source – Company RHP)

(a) Profit & Loss

 (b) Balance Sheet

(c) Operating Cash Flow

Peer Comparison

(Note – Market Price is December 2, 2025)

Outlook & Relative Valuation
Vidya Wires offers leveraged exposure to multi-year themes in India, such as grid expansion, power T&D modernization, renewable capacity addition, EVs, and industrial capex, with its capacity poised to almost double post the ALCU project. The company's strong track record reflects a revenue CAGR of around 14 per cent over the last three years, with consistent growth in EBITDA and PAT. Vidya Wires' post issue and based on FY25 earning’s ROE stands at 9.28 per cent and its ROCE is 10.71 per cent respectively, indicating efficient capital utilization, though its margins remain modest compared to peers.

In terms of valuations, the IPO is being priced at a P/E of 27.1x based on FY25 earnings (on a post-issue, fully diluted basis). This valuation is broadly in line with or slightly above listed winding wire specialists but comes at a discount to some diversified conductors that have higher margins, such as Apar Industries (P/E of 38x). Vidya Wires’ lower PAT margin (around 2.74 per cent for FY25) compared to competitors like Apar Industries (18.24 per cent ROE, 33.59 per cent ROCE) and moderate leverage (debt/equity ratio of 0.91) makes the pricing appear fair, rather than cheap. This valuation embeds expectations of successful commissioning and ramp-up of the new capacity.

The key upside triggers for Vidya Wires include the timely execution of the ALCU project, faster scaling of higher-value products like copper foils, solar cables, and PV ribbons, and continued strong demand from renewables and EVs. On the downside, risks include commodity price volatility, a slowdown in power or industrial capex, and potential project execution delays.

Recommendation
Avoid for now. While Vidya Wires combines a scaled, diversified position in a growing niche with healthy return ratios and a clear capex-led growth runway, there are notable concerns that warrant caution. The company has a large amount of short-term debt on its balance sheet, primarily to be alleviated by proceeds from the fresh issue. However, its negative operating cash flow highlights working capital challenges. While the capital raise will lead to some deleveraging with respect to short-term borrowing, future working capital needs are likely to be met through short-term financing until operating cash flow turns positive. This suggests ongoing pressure on working capital management in the near term. Vidya Wires has modest margins, execution risk tied to its new projects, and fair (not heavily discounted) valuations, which offers some comfort, but the business fundamentals need to be firmly set up before taking a long-term position.