Raksan Transformers Ltd. IPO

Raksan Transformers

• Raksan Transformers is coming out with an initial public offering (IPO) of 55,12,800 shares in a price band of Rs 258-273 per equity share.
• The issue will open for subscription on September 10, 2026 and will close on September 15 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 25.80 times of its face value on the lower side and 27.30 times on the higher side.
• Book running lead manager to the issue is HEM Securities.
• Compliance officer for the issue is Mukesh Sharma.

Profile of the company

Raksan Transformers is an ISO 9001:2015 certified company engaged in the manufacturing of transformers across different voltage ratings. The company’s product offerings include distribution transformers, power transformers, transformers for solar applications, and special purpose transformers. These transformers are utilized across multiple sectors to facilitate the transmission and distribution of electrical energy. It focuses on delivering quality and reliability in its product range, supported by standardized manufacturing practices and compliance with applicable industry norms. Transformers serve critical functions in power generation, transmission, and distribution networks, and are deployed in diverse industrial and infrastructure projects.

The company aims to deliver single/three phase CRGO oil filled distribution or power transformers which are designed according to customer requirements and individual factors like voltage, power, climate, system landscape, sound level etc. The company implements control measures at each stage of the manufacturing process to ensure that the transformers comply with applicable technical specifications, regulatory standards, and customer requirements. The company’s manufacturing process uses key raw materials such as CRGO (Cold Rolled Grain Oriented) steel, copper/aluminium conductors, transformer oil, insulating materials and fabricated transformer tanks. Over the years, the company has established long-standing relationships with its suppliers, enabling it to procure quality raw materials in a timely manner and at competitive prices.

The manufacturing process includes core cutting, coil winding, core-coil assembly, tank fabrication, drying, oil filling, final assembly, and testing. The company has established in-house facilities for core cutting/slitting, wire drawing or strip drawing, tank fabrication etc. which helps it in meeting the design requirements and expectations of its customers with different types of shapes and size, it also helps it to achieve sustain quality standards, reduce dependence on third party and make its process cost effective. It also operates an in-house testing laboratory equipped to conduct routine and type tests in line with relevant Indian Standards (IS) and customer requirements. The company is ISO 9001:2015 certified. It manufactures products in compliance with Bureau of Indian Standards (BIS) and are authorized to use the ISI mark on applicable products. Additionally, several of its products are certified under the Bureau of Energy Efficiency (BEE) STAR rating program, supporting energy efficiency and compliance with regulatory norms.

Proceed is being used for:

• Funding capital expenditure towards setting up of manufacturing facility at Liwaspur, Sub- Tehsil Rai, Distt. Sonepat, Haryana
• Meeting working capital requirements
• Repayment of certain borrowing availed by the company, in part or full
• General corporate purpose

Industry overview

India is now amongst the fastest developing countries in the world in terms of GDP as well as the electricity consumption. Electricity demand in the country has increased at a CAGR of about 5% during the period 2017-22. During the period 2022-24, electricity demand has increased at a CAGR of about 9.46%. Expansion of transmission system depends on the projected electricity demand and the generation capacity addition. As per 20th EPS Report, peak electricity demand during 2026-27 is 277 GW and the installed generation capacity required to meet this electricity demand is 609.6 GW on all-India basis. There has been substantial growth in inter-regional power transmission capacity to facilitate smooth flow of power from surplus to deficit regions and for optimum utilization of the country’s generation resources. Aggregate inter-regional transmission capacity by the end of 2021-22 was 1,12,250 MW. Inter-Regional transmission capacity addition planned during the period 2022-27 is 30,690 MW.

The installed generating capacity from RE sources as on March 31, 2022, was 157 GW (including 46.72 GW large hydro), which was about 39% of the total installed capacity. As on 31 st May, 2024, the installed electricity generating capacity in the country from RE sources was 193.5 GW (including 46.92 GW large hydro), which is about 43.5% of the total installed electricity generating capacity in the country. The RE potential zones in the country are primarily located in Rajasthan, Gujarat, Karnataka, Andhra Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh, Madhya Pradesh and Leh. Transmission system has been planned for over 600 GW RE capacity/ potential zones by the year 2031-32.

There has been a consistent expansion in the transmission network and increase in transformation capacity in the country. This increase is in consonance with the increase in electricity generation and electricity demand in the country. There has been more increase in the transmission system at higher voltage levels. This aspect of growth in transmission system highlights the requirement of transmission network to carry bulk power over longer distance and at the same time optimize Right of Way (RoW), minimize transmission losses and improve grid reliability.

Pros and strengths

Established manufacturing facility and In-house operations: The company operates through its two manufacturing facilities one situated at Plot No. 1676–1677, Sector-38, Phase-I, HSIIDC Industrial Estate, Rai, District Sonepat, Haryana and Plot no. 1413, HSIDC, Industrial Estate, Rai, District Sonepat collectively spread across 2025 sq. mtrs and 1012.5 sq. mtrs. The manufacturing facility located at Plot No. 1676–1677, Sector-38, Phase-I, HSIIDC Industrial Estate, Rai, District Sonepat, Haryana is equipped with LT winding machine, HT Winding machine, Ovens, Cranes, Power disc welding machine, Oil filtration machine, compressor, Cutting machine and Drill machines capable of manufacturing & material handling to facilitate smooth and on time production and Plot no. 1413, HSIDC, Industrial Estate, Rai, District Sonepat is equipped with Wire jointing machine, CU Strip machine, Aluminium strip machine, Slating machine, HT Covering machine, Power press machine. Its manufacturing units are equipped with the required machinery, equipment and infrastructure and capable to carry out the requisite manufacturing activities and are in compliance with the manufacturing standards.

Strong order book: As on June 30, 2026, the company has 83 orders in hand which include transformers aggregating into an order book of Rs 32,967.92 lakh. Consistent growth in its order book has materialized due to its continued focus on quality and its ability to retain its customers. The company’s experience in designing, manufacturing, operational capabilities, technical capabilities, reputation for quality and timely delivery as well as the price competitiveness has enabled it to retain its existing customers and getting new customers.

Quality assurance: Quality plays an important role in success of its business as quality helps it to retain and satisfy existing customer, attract new customer, building reputation, brand image, and providing it competitive advantage over its competitors. Its quality assurance activities include initial inspection of materials before they are entered into the production process these include size verification, dimension, weight and quality as per the requisite standards, BDV test of transformer oil, clearances & insulation gap during core coil assembly, leakage testing after tanking, joint / final inspection and pre dispatch check. Further, the company has obtained Quality Management System ISO 9001:2015 certification, ensuring compliance with quality management standards for both the manufacturing facilities.

Risks and concerns

High public-sector customer concentration: The company derived a substantial portion of its revenue from government and public utility customers, the supply of transformers to public utility companies including government entities constituted 50.73%, 72.99% and 56.13% of its revenue from operations during the in Fiscal 2026, Fiscal 2025 and Fiscal 2024 respectively, and its business is highly dependent on government policies, project allocations, and payment cycles.

Raw material procurement risk: The company’s manufacturing operations require substantial quantities of raw materials, primarily including Cold Rolled Grain Oriented (CRGO) Electrical Steel, Copper Wire, Copper Strip, Copper Sheet, Aluminium Wire, Strip, Sheet, Mild Steel, Transformer Oil and other materials, which are subject to significant price fluctuations. In Fiscal 2026, purchases from its top ten suppliers accounted for 54.96% of its total raw material procurement, compared to 63.22% in Fiscal 2025 and 63.48% in Fiscal 2024. The cost of raw materials consumed (adjusted with change in inventory) was Rs 29115.04 lakh in Fiscal 2026, representing 80.18% of its revenue from operations; Rs 27089.10 lakh in Fiscal 2025, representing 83.55% of its revenue from operations and Rs 13862.47 lakh in Fiscal 2024, representing 86.13% of revenue. Volatility in the supply and pricing of its raw materials may have an adverse effect on its business, financial condition and results of operations.

Working capital intensive business: Due to the nature of its operations, particularly in transformer manufacturing, the company requires substantial working capital to finance the procurement of raw materials such as copper and electrical steel, manage inventory across long production cycles, and support timely execution of customer orders. Additionally, the capital-intensive nature of its business, along with the credit terms extended to customers, results in a large portion of its funds being tied up in receivables and inventory. This structural need for high working capital makes its business sensitive to any delays in receivables realization, changes in input costs, or challenges in accessing working capital financing. Any inability to meet these working capital needs may disrupt its cash flow cycle and adversely affect its operational efficiency.

Outlook

Raksan Transformers is an ISO 9001:2015 certified manufacturer of transformers across different voltage ratings. The company manufactures a diversified range of transformers, including distribution transformers, power transformers, transformers for solar applications and special purpose transformers, which are used across power generation, transmission and distribution networks, as well as various industrial and infrastructure projects. The company has strong order book coupled with track record of profitability and consistent financial performance. On the concern side, a significant portion of its revenue is derived from government-controlled entities, through competitive bidding processes. Its business, results of operations, and cash flows may be adversely affected if it is unable to qualify for or win tenders, face pricing pressures, experience delays in award or execution of contracts, or are restricted from participating in future bids.

The company is coming out with a maiden IPO of 55,12,800 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 258-273 per equity share. The aggregate size of the offer is around Rs 142.23 crore to Rs 150.50 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased from Rs 32,420.98 lakh in FY 2025 to Rs 36,310.82 lakh in FY 2026, reflecting an increase of Rs 3,889.84 lakh i.e. 12.00%. Moreover, profit after tax increased from Rs 2,037.67 lakh in FY 2025 to Rs 3,360.48 lakh in FY 2026, representing an increase of Rs 1,322.81 lakh i.e. 64.92%.

Meanwhile, the company has acquired the land parcels located at Liwaspur, Sub- Tehsil Rai, Distt. Sonepat, Haryana. Further, the company proposes to expend around Rs 7258.43 lakh towards setting up of the manufacturing facility including the construction of factory building, civil work and installation of new machinery which will be partly funded from the proceeds of the IPO. The company will take all requisite actions and implement the necessary procedures at the appropriate stages in relation to the setting up of the manufacturing facility, as and when applicable. The establishment of the upcoming factory is pivotal in its strategy to meet the escalating demand for its products. With a surge in orders from customers, it is witnessing a rise in demand, necessitating rapid equipment delivery. Thus, going forward, it intends to continue making investments in capacity expansions and modernization of its equipment and facilities.