IC Electricals Company Ltd. IPO

IC Electricals Company

• IC Electricals Company is coming out with an initial public offering (IPO) of 48,39,600 shares in a price band of Rs 94-99 per equity share.
• The issue will open on July 03, 2026 and will close on July 07, 2026.
• The shares will be listed on SME Platform of NSE.
• The face value of the share is Rs 10 and is priced 9.40 times of its face value on the lower side and 9.90 times on the higher side.
• Book running lead manager to the issue is Nexgen Financial Solutions.
• Compliance officer for the issue is Subodh Kumar.

Profile of the company

IC Electricals Company is involved in the business of manufacturing of electronic equipment for Railways Application. It provides advanced engineering solutions to Indian Railways. It offers a wide range of electronic products such as regulators, battery chargers, emergency lights, inverters, microprocessor-based control systems, and vigilance control devices, compliant with the latest technical standards. It also manufactures key railway components including alternators, traction motors, and permanent magnet alternators with controllers. These products are engineered to meet stringent industry standards, and its team works closely with clients to develop tailored solutions that ensure high performance, reliability, and compliance across various rail applications. Its revenues are generated exclusively from manufacturing activities, value-added operations, and its Contract Division. It procures raw materials and components, undertakes in-house manufacturing and value-addition processes, and supplies finished or value-added products to its customers. Further, the Contract Division undertakes execution of contracts and forms part of its service operations.

Additionally, it provides services for turnkey railway electrification projects, encompassing the design, supply, erection, testing, and commissioning of 25 kV AC overhead equipment and traction substation systems. It also has approved supplier registrations from various professional directorates of Ministry of Railway (Research, Design & Standards Organisation). In the railway industry, its products contribute to enhancing operational efficiency, safety, and reliability across various systems. Its electronic solutions support critical on-board functions by ensuring reliable power regulation, lighting, control, and monitoring, thereby improving performance and safety in railway coaches. Its electrical components help maintain continuous traction and auxiliary functions essential for smooth rail operations. Additionally, its turnkey electrification capabilities ensure seamless implementation of high-voltage railway infrastructure, playing a key role in the modernization and expansion of India's rail network.

With its in-house design capabilities, the company leverages its expertise in railway engineering and electrical systems to deliver. It primarily operates on a Business-to-Government (B2G) model, with the majority of its revenue derived from delivering its services to government department and ministries such as Ministry of Railways. It has been accredited as an ISO 9001:2015 certified company. It prioritizes the implementation and maintenance of a robust Quality Management System, ensuring its products adhere to the quality and reliability standards.

Proceed is being used for:

• Funding the working capital requirements of the company.
• General corporate purposes

Industry overview

Currently, India is undergoing a digital revolution leading to a surge in the consumption of electronic devices in India. This growth is mainly attributed to the increasing middle-class population, rising disposable incomes, and declining electronics prices in the country. Major Government initiatives such as ‘Digital India’, ‘Make in India’, and supportive policies including a favourable FDI Policy for electronics manufacturing have simplified the process of setting up manufacturing units in India. India's railway sector, being one of the largest and busiest in the world, has seen significant advancements in the adoption of electrical and electronic equipment to enhance locomotive performance, safety, and operational efficiency.

With the increasing electrification of the railway network, the focus has shifted toward advanced electrical and electronic systems in railway locomotives. The integration of advanced electronics in locomotives is becoming increasingly critical, as railroads modernize. These systems empower train engineers to efficiently monitor and control locomotive performance, leading to enhanced operational efficiency, safety, and reliability. The key electronic systems in modern locomotives optimize performance by leveraging real-time data and sophisticated controls, ensuring peak functionality and minimizing operational disruptions.

Amid disruptions in global supply chains due to recent geopolitical shocks, Indian Railways has adopted a proactive approach towards strengthening domestic capacity. Local sourcing of railway components plays a key role in building resilient domestic supply chains, ensuring smoother operations within the sector. Around 80-85% of the components for Vande Bharat trains have been sourced from domestic suppliers. Domestic private players in the railways component manufacturing industry have stepped up to utilise this opportunity. Telangana became home to India's largest private rail manufacturing in June.

Pros and strengths

Strong focus on research & development: Its dedicated R&D team focuses on two strategic areas: developing new product lines and continuously enhancing the quality and performance of existing offerings. Their efforts have been instrumental in reducing costs through initiatives such as designing products that are adaptable for both domestic and international markets, improving the quality and reliability of its current products, and implementing innovative manufacturing and operational processes. These initiatives have significantly minimized resource wastage across its operations and improved overall cost efficiency, generating substantial benefits for the company as a whole. 

Well-equipped manufacturing facilities: The company’s manufacturing infrastructure is based in Haridwar, Uttarakhand, and is well-equipped with the latest technological advancements. It has implemented highly efficient operational processes, which significantly reduce overall manufacturing time and help ensure the timely delivery of its products.

Extensive sales & service network: It maintains a comprehensive sales and service network across India, coordinated through its central sales office in Delhi. A dedicated service center or service representative is present in every state capital, ensuring that customer queries and service requirements are attended to within 24 hours. This enables minimal downtime and helps it maintain high levels of customer satisfaction with its products and after-sales support. Its marketing and sales department comprises six employees, who are supported by a wide network of engineers across various regions to provide effective sales assistance and prompt service support.

Risks and concerns

Significant revenue and operation dependence in Uttarakhand: The company operates its business operations from its registered office and manufacturing facility. Although, its business operations span various regions across India, State of Uttarakhand contributes to a substantial portion of its revenues. The State of Uttarakhand is accounted for around 59.01%, 53.89% and 59.17% of its revenue from operations for the Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Any factors relating to political and geographical changes, growing competition, economic downturn, natural disasters and any change in demand may adversely affect its business. It cannot assure that it shall generates the same quantum of business, or any business at all, from this state, and loss of business from this state could adversely affect its revenues and profitability.

Reliance on Government railway contracts: Its business is substantially dependent on contracts awarded by the Ministry of Railways and its affiliated entities, including Indian Railways, its zonal railways, public sector undertakings and other government organisations associated with the Ministry. It is engaged in the manufacturing of Power Electronics, Instrumentation and Distribution Systems, Microprocessor-Based Control Systems for Railway applications, Rotating Machines and Railway Electrification, and its primary customers include Indian Railways and other railway contractors. It also holds approved supplier registrations with various professional directorates under the Ministry of Railways, including the Research Designs & Standards Organisation (RDSO). The Government contracts are accounted for around 82.01%, 81.50% and 67.74% of its revenue from operations for the Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively.

Dependent on third parties for the supply of raw materials: The raw material costs are subject to fluctuations. There can be no assurance that strong demand, capacity limitations or other problems experienced by its suppliers will not result in occasional shortages or delay in their supply of raw materials. If it experiences a significant or prolonged shortage of raw materials from any of its suppliers and it cannot procure the raw materials from other sources, it will not be able to fulfill product delivery schedules on time, which would adversely affect its sales, margins and customer relations. Further, in the absence of any long-term supply agreements, it cannot assure that a particular supplier will continue to supply raw materials to it in the future. In the event the prices of such raw materials were to rise substantially, it may find it difficult to make alternative arrangements for suppliers of its raw materials, on the terms acceptable to it, which could materially affect its business, results of operations and financial condition. 

Outlook

IC Electricals Company is involved in the business of providing advanced engineering solutions to Indian Railways. It offers a broad range of electronic products such as regulators, battery chargers, emergency lights, inverters, microprocessor-based control systems, and vigilance control devices, compliant with the latest technical standards. It maintains a comprehensive sales and service network across India, coordinated through its central sales office in Delhi. A dedicated service center or service representative is present in every state capital, ensuring that customer queries and service requirements are attended to within 24 hours. This enables minimal downtime and helps it maintain high levels of customer satisfaction with its products and after-sales support. On the concern side, its projects are generally assigned to its organization upon fulfillment of specified pre-qualification prerequisites and subsequent engagement in a competitive tendering procedure. Any failure to secure new projects or premature termination of contracts awarded to it could potentially have adverse repercussions on both its business operations and financial standing.

The company is coming out with a maiden IPO of 48,39,600 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 94-99 per equity share. The aggregate size of the offer is around Rs 45.49 crore to Rs 47.91 crore based on lower and upper price band respectively. On performance front, the revenue from operations of the company for FY25-26 was Rs 14,392.78 lakh as against Rs 12,148.16 lakh for FY24-25, an increase of 18.48%. Profit after tax for the FY25-26 was at Rs 1,402.45 lakh against profit after tax of Rs 928.26 lakh in FY24-25, an increase of 51.08%.

It is focusing on the rail contracts division as the Indian Government is committed to modernizing its railway infrastructure through several key initiatives aimed at upgrading the existing system and enhancing service quality. These initiatives include a drive toward 100% railway electrification, improvements to existing lines to support higher speeds and better passenger facilities, and significant expansion of the railway network with new lines. Additionally, there is a focus on introducing and expanding a high-speed train network connecting major cities across India, along with the development of dedicated freight corridors to reduce cargo transportation costs. Its contracts division is actively managing a strong portfolio of projects in line with these developments. Further, its business strategy focuses on capitalizing on markets where DC traction motors remain prevalent, such as the USA, Canada, Brazil, Mexico, and several African countries. In these regions, a significant portion of DC traction motor work is still performed manually, presenting a competitive advantage that it aims to leverage.