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It is going to be busy year for initial public offerings (IPOs) in the wires and cables sector in India, thanks to the tailwinds in the electrical industry. Two companies - Gujarat-based Vidya Wires and Atlanta Electricals – have already filed their IPOs papers with the capital market regulator SEBI, while several other companies such as Silver Consumer Electricals and KSH International are in queue, looking to tap IPO market soon.
The wires and cables sector’s growth potential can be adjudged by the entry of big players like billionaire Gautam Adani's Group and Kumar Mangalam Birla's Aditya Birla Group. Ultratech Cement announced its foray in Februray, with an investment commitments of ₹1,800 crore over two years. While Adani Enterprises has formed a joint venture Praneetha Ecocables through its subsidiary Kutch Copper Ltd with Praneetha Ventures to manufacture and sell cables and wires. The organised sector, which forms two thirds of the sectoral revenue includes top listed players like Polycab India, RR Kabel, KEI Industries and Havells.
The cables and wires market grew over 8% CAGR over FY14-23 to reach ₹70,000 crore and is expected to grow at a rate of 12-14% CAGR over FY23-27, according to a recent report by Motilal Oswal Financial Services. The market size was valued at $9.32 billion in 2024.
The growth in the sector is supported by India’s renewable energy goals, focus on infrastructure, electrification of villages and rising exports. The rising investment in end-user segments such as power generation and transmission, railways and real estate is also a major contributor to this growth. The cables and wires industry also constitutes over 39 % of the electrical industry, forming a critical part of India’s industrial and infrastructure expansion.
IPO wave in cables & wires sector
According to global brokerage Jefferies, India’s cable & wire industry is estimated to be ₹80,000 crore in FY24 (₹56,000 crore cables and ₹24,000 crore wires), and has an "attractive opportunity". "There is enough room for a new player in the cable & wire industry", where no single player commands more than 15% share in wires and 20% in cables. Adding to it, the sector is growing by double digits, and 30% of the industry is still unorganised.
One of the players that has filed its DRHP is Gujarat-based Vidya Wires Limited. The 44-year-old company manufactures winding and conductivity products for a range of critical industries and applications. Their product portfolio includes precision-engineered wires, enameled copper rectangular strips, paper insulated copper conductors, copper busbar and bare copper conductors, specialised winding wires, pv ribbon and aluminum paper covered strips, among others.
Vidya Wires’ products are used in varied critical applications such as energy generation and transmission, electrical systems, electric motors, clean energy systems, electric mobility and railways. Their notable customers include Adani Wilmar, Schneider Electric, Transformers & Rectifiers Limited, Electrotherm Limited, Suzlon Energy Limited and more.
With a current capacity of 19,680 MT, the company plans is raising funds to almost double its production capacity to 37,680 MT. Post this, Vidya Wires will become India’s 3 rd largest manufacturer of winding and conductivity products. Vidya Wires has achieved capacity utilisation improvement from 65.80% in FY22 to 89.98% in September 2024, with a production volume growth of 26.99% over the last three fiscals. As the world moves towards renewable energy, Vidya Wires too sources over 26% of its power from renewable energy and integrates environmental, social, and governance practices into operations.
Atlanta Electricals Limited is another company that has filed the DRHP with SEBI. The Gujarat based company is one of the leading manufacturers of power, auto and inverter duty transformers in India as per production volume as of Fiscal 2024 as per a CRISIL Report. It is one of the few companies that manufactures transformers up to and including 200 MVA capacity and with 220 kVs.
Atlanta’s product portfolio includes auto transformers, inverter duty transformers, furnace transformers, power transformers, generator transformers and special duty transformers. Over a short period, they have witnessed significant growth in terms of revenue from ₹625.66 crore to ₹867.55 crore from fiscal 2022 to fiscal 2024 at a CAGR of 38.66%.
Atlanta is also a key player in the renewable energy space, having embraced the green energy transition in 2021 by supplying to prominent renewable energy generation projects. It has secured major orders for the supply of eight 80 MVA, 220/33 kV power transformers for Ultra Mega Solar Park in Andhra Pradesh. The company has a customer base in 19 states and three union territories, across India, with a supply of 4,000 transformers, aggregating to 78,000 MVA to various state and national electricity grids, private sector players and prominent renewable energy generation projects. The company plans to go global and expand its presence in the power sector.
Among others, players such as Silver Consumer Electricals Limited and KSH International are also expected to go public soon. Rajkot-based Silver Consumer Electricals manufactures and supplies pumps, motors, agriculture equipment, solar-powered solutions, fans, lighting products and appliances. On the other hand, Pune-based KSH International, founded in 1981, is a leading manufacturer of insulated rectangular & round winding wires and continuously transposed conductors in India.
(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)
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