Parth Electricals & Engineering

• Parth Electricals & Engineering is coming out with an initial public offering (IPO) of 29,24,800 equity shares in a price band Rs 160-170 per equity share.
• The issue will open on August 4, 2025 and will close on August 6, 2025.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 16.00 times of its face value on the lower side and 17.00 times on the higher side.
• Book running lead manager to the issue is Horizon Management.
• Compliance Officer for the issue is Vineet Shaw.

Profile of the company

Parth Electricals & Engineering is a technology-driven company with a focus on quality, design, and product development. It has also entered into technology transfer agreements with Schneider Electric Industries SAS to provide better services and products to its customers. Schneider Electric Industries SAS is a global industrial technology company that provides expertise in electrification, automation, and digitization. Under these agreements, it is authorized by Schneider Electric to manufacture, assemble, test, market and sell the product as per Schneider’s type tested design and transfer of technology. Schneider Electric Industries SAS (Licensor) shall provide Parth (Licensee) with all technical information required to manufacture Schneider Electric Industries SAS make RMU and CSS/PSS. The company is also an outsourcing partner of Schneider Electric for manufacturing of MV panels.

The company has a dedicated team of engineers involved in designing and developing solutions that enable it to manufacture Electrical Panels, RMUs, and CSS for Power Distribution ranging from 415 V to 33 kV, as well as Protection Relay Control Panels ranging from 33 kV to 132 kV. During this journey of two decades, the company has served more than 100 clients in different industries such as Oil and Gas, Papers, Cement, Steel, FMCG, Automobile etc. Its clientele in this industry includes Aditya Birla, Ultratech Cement, L&T, RIL, Adani, Tata Power, Schneider Electric, BHEL, Tata Steel, Siemens, GFL, Jindal Steel & Power and many more.

The company has modern manufacturing facilities equipped with additional CNC machines, robotic welding systems, and automated controls to maintain quality and productivity, ensuring thorough quality control and safety throughout its production processes. In 2016, it has trained its Manufacturing team in China for handling HV GIS for Installation, Testing and Commissioning. It has also signed a Technology Transfer agreement with Schneider Electric Industries SAS for manufacturing RMUs and CSS/PSS under Make in India. Its manufacturing facility is certified in accordance with international standards of quality management systems, environmental management systems, and occupational health and safety management systems as per ISO 9001:2015, ISO 14001:2015, ISO 45001:2018.

Proceed is being used for:

• Establishing GIS manufacturing facility in Gujarat
• Establishing manufacturing facility in Odisha
• Repayment of short term borrowings
• General corporate purposes

Industry Overview

The India - electrical equipment market size is estimated to grow at a CAGR of 11.68% between 2022 and 2027. The market size is forecast to increase by $52,975.77 million. The growth of the market depends on several factors such as an increase in the number of residential and commercial building projects, a rise in power generation from renewable energy sources, and an increase in investments in the power sector. Demand for electrical equipment in India is increasing, encouraging suppliers to increase production of electrical equipment. India is one of the largest consumers and producers of electricity and India is the third largest electricity producer in the world. Furthermore, the demand for electrical equipment is expected to increase in this region due to the growth of the power sector. This will increase the opportunity for electrical equipment in India.

Meanwhile, the Gas Insulated Switchgear (GIS) market is experiencing significant growth, driven by the increasing demand for reliable and efficient power supply, urbanization, and the expansion of electrical infrastructure. Advancements in technology, such as compact designs and enhanced safety features, are making GIS a preferred choice over traditional switchgear. The rising focus on renewable energy integration and smart grid implementation is also contributing to market expansion. Additionally, stringent government regulations on environmental safety and the reduction of space constraints in densely populated urban areas are further propelling the adoption of GIS systems. Key players are investing in research and development to innovate and improve GIS solutions, enhancing their performance and reliability, thus driving the market growth globally.

In the current decade (2020-29), the Indian electricity sector is likely to witness a major transformation with respect to demand growth, energy mix and market operations. India wants to ensure that everyone has reliable access to sufficient electricity at all times, while also accelerating the clean energy transition by lowering its reliance on dirty fossil fuels and moving toward more environmentally friendly, renewable sources of energy. Future investments will benefit from strong demand fundamentals, policy support and increasing government focus on infrastructure. The Central Electricity Authority (CEA) estimates India’s power requirement to grow to reach 817 GW by 2030. Also, by 2029-30, CEA estimates that the share of renewable energy generation would increase from 18% to 44%, while that of thermal energy is expected to reduce from 78% to 52%.

Pros and strengths

Ensuring excellence through rigorous quality control processes: The company takes immense pride in delivering products of the highest quality, and its dedication to this standard is certified by its ISO certifications (ISO 9001:2015, ISO 14001:2015, ISO 45001:2018). This certification serves as a testament to its stringent quality management practices and its commitment to meeting and exceeding international standards. Within its organization, it has established QA Lab which is an independent Testing Department that strives to provide best- in-class testing and QA services. Powered by a workforce of professionals and having good experience in the field of Electrical Panels testing, it aims to provide a complete range of testing services, while keeping customer satisfaction at its core. It is well equipped with high-end technical testing devices that make it competent enough to test the panel.

Strategic tie ups for direct billing: The company’s competitive strength lies in the strategic tie-ups it has with Original Equipment Manufacturers (OEMs), Schneider Electric Infrastructure paving the way for streamlined and cost-effective bulk purchasing. These collaborations empower it to secure superior-quality raw materials and components at scale, enabling not only substantial cost savings but also ensuring a consistent and reliable supply chain. By aligning itself with reputable OEMs, it defends its position in the market, elevating its capacity to deliver excellent products with efficiency. This strategic synergy with OEMs not only strengthens its procurement capabilities but also enhances its overall competitiveness in the industry.

Marketing network: It continues to enhance its business operations by ensuring that its customer base increases through its marketing efforts. Its ability to customize its products for the various applications by its customers can help it to diversify its operations across different customer segments. Its core competency lies in the thorough understanding of its customers’ needs and preferences, its vision to engage in sustainable practices and providing unparalleled quality of its products thereby achieving customer loyalty. Its marketing team include the engineers who identify the required demand in the market and provide suggestion to make required changes in its product line. 

Risks and concerns

Maximum revenue comes from limited customers: The company is dependent on a few customers of its products and services, for a significant portion of its revenue. The company has garnered 86.46%, 67.19% and 73.54% of its total revenue from top 10 customers in FY25, FY24 and FY23 respectively. The company’s business operations are highly dependent on its customers, which it caters to and the loss of any of its customers from any industry which it caters to may adversely affect its sales and consequently on its business and results of operations.

Geographical constrain: The company generates its major portion of sales from its operations in certain geographical regions. For the Financial Year 2024-25, its revenue concentration from Gujarat has increased to around 90.92% and concentration in Odisha stands at 5.88%. Existing and potential competitors to its businesses in these states may increase their focus on these states. The concentration of its operations heightens its exposure to adverse developments related to competition, as well as economic, political, demographic and other changes, which may adversely affect its business prospects, financial conditions and results of operations.

Dependent on few key suppliers for procurement of raw material: The company is highly dependent on its key raw material and a few key suppliers who help it to procure the same. The company procures 70.83%, 75.73% and 44.00% of its raw material from top 10 suppliers in FY25, FY24 and FY23 respectively. The company has not entered into long-term agreements with its suppliers for supply of raw materials. In the event it is unable to procure adequate amounts of raw materials, at competitive prices its business, results of operations and financial condition may be adversely affected.

Outlook

Parth Electricals & Engineering is a service-oriented firm evolved into a manufacturing entity specializing in electrical equipment. The company offers products such as Medium Voltage (MV) switchgear panels, Vacuum Circuit Breaker (VCB) panels, Earth Link Boxes, Control and Relay Panels (CRP), and Compact Substations (CSS). The company is ensuring excellence through rigorous quality control processes. Also, it has enhanced operations by increasing its customer base through marketing. On the concern side, the company is dependent on a few customers of its products and services, for a significant portion of its revenue, and any decrease in revenues or sales from any one of its key customers may adversely affect its business and results of operations. Moreover, the company’s major sales revenue is coming from single product, i.e. Ring Main Unit (RMU), which is more that 50% of its total sales. The management is making consistent efforts in producing and selling other products like PSS, MV Panels, Metering Panels, CRP and Earthlink Box etc.

The company is coming out with a maiden IPO of 29,24,800 equity shares of Rs 10 each. The issue has been offered in a price band of Rs 160-170 per equity share. The aggregate size of the offer is around Rs 46.80 crore to Rs 49.72 crore based on lower and upper price band respectively.  On performance front, the company’s total revenue increased from Rs 8,678.49 lakh in FY24 to Rs 17,467.17 lakh in FY25, representing a robust growth of 101.27%. Moreover, profit after tax has increased by 119.44% from Rs 461.02 lakh for FY 2023-24 to Rs 1,011.68 lakh for FY 2024-25.

Expanding through exports is a crucial growth strategy that enables an engineering company to access new markets, diversify revenue streams, and enhance global competitiveness. It has identified America and Canada for initial thrust in exports. Both countries are highly evolved in the urban electricity distribution sector and based on its capabilities, it plans to place both products and services in these markets. In the ensuing years it plans for exports to contribute to nearly 20% of its revenues. Export markets fetch better prices leading to a sustainable bottom line. It has received an order for $4.8 million from Mesabi Metallics Company LLC located in Minnesota in the US for the supply of LT Panels. Its approach shall be a collaborative approach wherein initially it shall become the backbone of an existing player through superior products and services of the company. A well-planned export strategy can unlock significant growth opportunities for the company. By leveraging market research, compliance adherence, efficient logistics, and strategic partnerships, the company can expand its global footprint and achieve sustainable success in international markets.