Smarten Power Systems

• Smarten Power Systems is coming out with an initial public offering (IPO) of 50,00,400 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 100 per equity share.
• The issue will open on July 7, 2025 and will close on July 9, 2025.
• The shares will be listed on SME Platform of NSE.
• The share is priced at 10 times higher to its face value of Rs 10.
• Book running lead manager to the issue is Arihant Capital Markets.
• Compliance Officer for the issue is Rajbir Sharma.

Profile of the company

Smarten Power Systems is engaged into designing and assembling of power back-up and advanced solar power products such as Home UPS systems, solar inverters, solar power conditioning units (PCUs), solar charge controllers. It is also engaged in the trading of solar panels and batteries. It sells its products through its distributors within India. It also exports its products except solar panels outside India. It generates approximately 76.41% of its revenue through domestic sales and 23.59% of its revenue through exports. Currently, the company is operating in 23 states and 2 union territories within India and has also established global footprint in over 18 countries which includes Middle East, Africa, and South Asia region.

Currently, the company’s infrastructure enables the production of Home UPS systems, solar inverters, solar power conditioning units (PCUs) and solar charge controllers around 600 units per day, with the capacity to increase 1,200 units per day once the proposed facility at MET becomes operational. Its manufacturing setup is designed to handle low, medium, and high-capacity units, offering the flexibility to meet a wide range of customer needs and market demands. 

The company carries out its assembling and trading business of its products under its brand and the patent registered in the name of the company. Its products cater to a wide variety of customer segments, from individual households to large-scale commercial solar projects, providing flexibility and adaptability to evolving market needs.

Proceed is being used for:

• Purchase of movable assets of the production line of battery manufacturing unit
• Meeting the working capital requirements
• Repayment in full or in part, of its outstanding borrowings
• Funding capital expenditure requirements
• General corporate purposes

Industry Overview

The home UPS market in India was valued at $317.8 million in 2023 and is expected to grow to $493.0 million by 2032, with a compound annual growth rate (CAGR) of 5%. The home Uninterruptible Power Supply (UPS) market in India is a dynamic and rapidly evolving sector. Its growth is fueled by the increasing need for reliable power in the face of frequent outages, as well as the nation's surge in digitalisation and offsite work opportunities. India's home Uninterruptible Power Supply (UPS) market is fundamentally driven by the need for resilience against power instability. Despite rapid urbanization and economic growth, the country continues to experience frequent power supply inconsistencies, with outages being particularly prevalent in rural and remote regions where infrastructure development remains limited. This has elevated the home UPS from a convenience to an essential utility, addressing critical power needs across residential and professional spheres.

Meanwhile, Government initiatives such as the Smart City project, the development of solar parks and the solar energy subsidy scheme would further accelerate the adoption of solar installations across residential and commercial segments. Grid connected solar inverters dominate the market in 2023 owing to huge adoption across residential and commercial applications, whereas off-grid solar inverters are majorly limited to rural electrification applications. The Solar Inverters are further categorized based on - system type, technology, rated output power and its application. In terms of system type, the solar inverter is categorized into Grid Connected, Off-Grid and Hybrid Solar Inverters. Based on technology, the grid connected solar inverter is further categorized into micro, string and central inverters. Based on a comprehensive preliminary market assessment of 450 models from 25 manufacturers it was revealed that nearly 63% market share is of the models with rated output power capacity ranging from 1 kW to 10 kW. There is also a significant market share of solar inverters above 10 kW rated capacity.

India added a record 10 GW of solar capacity in Q1 2024, a nearly 400% year-over-year increase, driven by the commissioning of delayed projects as module prices fell and the Approved List of Models and Manufacturers (ALMM) order was suspended, as well as improved grid connectivity to projects previously stalled. Solar power accounted for 16.9% of the total installed power capacity and 40.1% of the total installed renewable capacity at the end of December 2023. India added a record 18.48 GW of renewable energy capacity in 2023-24, a 21% increase over the previous year, but industry experts say at least 50 GW of annual additions are needed to meet the 500 GW target by 2030. 

Pros and strengths

Innovative product range and technological advancements: The company has built a portfolio of over 372 SKUs, offering products across five distinct categories including home UPS systems, solar inverters, solar power conditioning units (PCUs), solar charge controllers, solar panels, and batteries. Its products cater to a wide variety of customer segments, from individual households to largescale commercial solar projects, providing flexibility and adaptability to evolving market needs. The company’s sine-wave technology gives it a distinct edge over conventional square-wave inverters. Sine-wave inverters are quieter, safer for sensitive electronics, and more efficient in managing power surges and fluctuations.

Strong research and development capabilities: The company’s success is its focus on research and development. Its R&D team consists of seven members who plays a critical role in maintaining its competitive advantage by continuously improving product quality, efficiency, and innovation. Its commitment to R&D has enabled the company to consistently deliver new product innovations and stay ahead of industry trends. Its R&D team comprises experts in power electronics, with relevant background in power conversion, inverter design, and energy storage systems and have over a decade of experience in developing efficient and reliable power systems, showcasing their technical depth and industry knowledge.

Extensive distribution and after-sales service network: The company has established a distribution network across India and internationally, ensuring its products are widely accessible in key markets. The company’s reach spans across 23 states and 2 union territories within India, supported by an extensive network that includes 380 distributors and 52 service centres catering to after sales service to resolve the complaints of the customers. It also has a reach outside India comprising of 31 distributors. Its network is its core strength, enabling the company to remain competitive with both organized and unorganized players in the power backup market.

Risks and concerns

Significant revenue comes from limited customers: The company relies on its top ten customers from whom it derives a significant portion of its revenue, contributing around 33.40%, 42.29% and 37.74% of its revenues from sale of products based on the Restated Consolidated Financial Statements for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023 respectively. Its reliance on such customers for its business exposes it to risks, that may include, but are not limited to, reductions, delays or cancellation of orders from its significant customers, a failure to negotiate favorable terms with its key customers or the loss of these customers, all of which would have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the company.

Geographical constrain: The company generates a significant portion of its revenue from the states of Haryana and Uttar Pradesh, making its business vulnerable to regional economic fluctuations and regulatory changes. Any adverse developments in these states such as economic downturns, changes in local laws, or increased competition could lead to a substantial loss of revenue. Additionally, natural disasters or unforeseen events in these regions may further disrupt its operations and impact its financial performance. This geographical concentration poses a risk to its overall business stability, and any significant loss of revenue from these key areas could have a material adverse effect on its financial condition and results of operations.

Exports is dependent on Nigeria and West Africa: The company derives a significant portion of its export revenue from Nigeria and West Africa. Any changes in foreign policies and import-export regulations can significantly impact the company’s ability to conduct international trade, affecting its export operations. Shifts in trade agreements, tariffs, quotas, and diplomatic relations between countries can lead to disruptions in supply chains, increased costs, or limited market access for exported goods. Additionally, increased trade barriers, such as higher tariffs or stricter import/export regulations, can reduce competitiveness in foreign markets, leading to lower demand for products or services. Similarly, changes in foreign policies that affect diplomatic or economic relations could create challenges in maintaining stable trade routes, payment processes, or overall business operations which could have a material adverse effect on its business, financial condition, results of operations and cash flows of the company.

Outlook

Smarten Power Systems Limited designs and assembles power backup and solar products, including Home UPS systems, solar inverters, power conditioning units, and charge controllers, and trades solar panels and batteries. The company has extensive distribution and after-sales service network. It also has vendor relationships and supply chain efficiency. On the concern side, the company’s top ten customers contribute significant revenues from operations and any loss of business from one or more of them may adversely affect its revenues and profitability. Moreover, a significant portion of the company’s revenue is derived from the states of Haryana and Uttar Pradesh, and any adverse developments in these states could adversely affect its business.

The company is coming out with an IPO of 50,00,400 equity shares of face value of Rs 10 each for cash at a fixed price of Rs 100 per equity share to mobilize Rs 50 crore. On performance front, the company’s revenue from operation has increased by 3.36% from Rs 19,519.57 lakh in the fiscal year ended March 31, 2024 to Rs 20,174.85 lakh in the fiscal year ended March 31, 2025. Moreover, Net Profit has increased by 13.11% from Rs 1,129.00 lakh in the fiscal year ended March 31, 2024 to profit of Rs 1,277.04 lakh in the fiscal year ended March 31, 2025.

The company derives a significant portion of its revenues from sales of lead-acid batteries, which form a crucial component of the power backup systems installed by its customers. Currently, the company assembles Home UPS/Inverters in-house, while lead-acid batteries are sourced from external vendors. This dependency on suppliers poses challenges in terms of ensuring consistent quality, timely delivery, and cost predictability. In order to overcome this dependency and as part of its strategic growth initiatives, the company intends to enter into manufacturing of lead-acid batteries, in addition to its current operations in which it primarily procures and supplies inverter batteries.