Safety Controls & Devices Ltd. IPO

Safety Controls & Devices

• Safety Controls & Devices is coming out with an initial public offering (IPO) of 60,00,000 shares in a price band of Rs 75-80 per equity share. 
• The issue will open on April 06, 2026 and will close on April 08, 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 7.50 times of its face value on the lower side and 8.00 times on the higher side.
• Book running lead manager to the issue is Sobhagya Capital Options.
• Compliance Officer for the issue is Shiva Nigam.

Profile of the company

Safety Controls & Devices is primarily engaged in the EPC (Engineering, Procurement, and Construction) business, focusing on the installation of substations, construction of solar plants, installation of firefighting equipment. It is also undertaking some construction projects of hospitals for the Ministry of Ayush. Based in Lucknow, Uttar Pradesh, its operations are carried out as an engineering enterprise. It has experience in executing turnkey projects across multiple sectors like transmission and distribution, solar energy, EV charging infrastructure, fire protection systems and hospital construction. It has domain experience in designing, engineering, supplying, installing, erecting, testing and commissioning transmission substations while prioritizing quality, efficiency and sustainability in all its projects. 

It primarily caters to government entities and undertakings, which constitute a significant portion of its overall customer base. This includes various state and central government power utilities, private power entities, and renewable energy developers. By focusing on these sectors, it engages in projects that align with public interests and contribute to national development. The company commenced operations as a provider of design, installation and supply services for fire equipment, firefighting systems and fire alarms. Over the time, the company expanded its capabilities and diversified its portfolio to address the growing needs of other industries. While initially focused on fire protection, it transitioned into projects involving the design, engineering, supply, erection, testing, and commissioning of transmission substations, such as 220 KV GIS Substations and 400 KV AIS Substations.

In addition to its work in transmission substations, the company has also expanded into renewable energy through the construction of solar power plants on a turnkey basis. Its diversified capabilities extend into the fire protection business, ensuring the safety and regulatory compliance of industrial, commercial and residential spaces. Furthermore, the company has entered the healthcare sector, participating in the construction of hospitals under the Ministry of Ayush, thereby reinforcing its position as a versatile and reliable provider of engineering services provider across multiple sectors. The company is an ISO 9001:2015 certified, issued by Quality Control Certification accredited by AOC Middle East LLC, in compliance with the quality management system.

Proceed is being used for:

• Repayment/prepayment, in part or full of certain of its borrowings
• Funding the working capital requirements of the company
• General corporate purpose

Industry Overview

Power is among the most critical components of infrastructure, crucial for the economic growth and welfare of nations. The existence and development of adequate power infrastructure is essential for sustained growth of the Indian economy. The fundamental principle of India’s power industry has been to provide universal access to affordable power in a sustainable way. The Ministry of Power has made significant efforts over the past few years to turn the country from one with a power shortage to one with a surplus by establishing a single national grid, fortifying the distribution network, and achieving universal household electrification. India’s power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, to viable non-conventional sources such as wind, solar, agricultural, and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required. India was ranked fourth in wind power capacity and solar power capacity and fourth in renewable power installed capacity, as of 2021. India is the only country among the G20 nations that is on track to achieve the targets under the Paris Agreement.

India's energy demand is expected to increase more than that of any other country in the coming decades due to its sheer size and enormous potential for growth and development. Therefore, most of this new energy demand must be met by low-carbon, renewable sources. India's announcement India that it intends to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity needs from renewable sources by 2030 marks a historic point in the global effort to combat climate change. India was ranked fourth in wind power capacity and solar power capacity, and fourth in renewable energy installed capacity, as of 2023. Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 15.4% between FY16 and FY23. India has 125.15 GW of renewable energy capacity in FY23. India is the market with the fastest growth in renewable electricity, and by 2026, new capacity additions are expected to double. With the increased support of the Government and improved economics, the sector has become attractive from an investor’s perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. Low-carbon technologies could create a market worth up to $80 billion in India by 2030. India’s target is to produce five million tonnes of green hydrogen by 2030. The Green Hydrogen target is set at India’s electrolyzer manufacturing capacity is projected to reach 8 GW per year by 2025. The cumulative value of the green hydrogen market in India could reach $8 billion by 2030 and India will require at least 50 gigawatts (GW) of electrolyzers or more to ramp up hydrogen production. It is expected that by 2040, around 49% of the total electricity will be generated by renewable energy as more efficient batteries will be used to store electricity, which will further cut the solar energy cost by 66% as compared to the current cost. The use of renewables in place of coal will save India Rs 54,000 crore ($8.43 billion) annually. As per the Central Electricity Authority (CEA) estimates, by 2029-30, the share of renewable energy generation would increase from 18% to 44%, while that of thermal is expected to reduce from 78% to 52%. The CEA also estimates India’s power requirement to grow to reach 817 GW by 2030.

Pros and strengths

Technical Expertise: With experience in executing projects up to 400kV AIS substations, it is positioned to compete for tenders and projects at the highest capacity levels in the industry. This capability distinguishes it from major multinational competitors in the engineering and power sectors, enabling it to capitalize on lower overhead costs to improve its potential for securing high-value contracts. Owing to its technical expertise, it qualifies to participate in aggregate tenders of considerable financial value at any given time. 

Well established association with Government entities: The company caters to a varied clientele, including public sector undertakings. Its relationship with these clients is established based on its competitive strength, service offerings and successful executed projects. A significant portion of its revenue is generated from the government awarded contracts and it intends to continue pursuing such projects through the tendering process to further expand its business operations.

Good relationship with OEMs and suppliers: It maintains established relationships with suppliers, dealers, and certain Original Equipment Manufacturer (OEMs). These relationships have enabled the procurement of quality products at competitive rates, allowing it to submit competitive bids and secure contracts. These advantages have proven beneficial thus far, with the expectation of continued benefits as it pursues larger opportunities moving forward.

Risks and concerns

Reliance on government projects: The company’s operations rely on government entities and undertakings. Any delays in project approvals, changes in government policies, budget constraints, or shifts in political or administrative priorities may affect its revenue stream. Over reliance on government contracts exposes it to fluctuations in public sector spending priorities, impacting project volumes. Changes in policies, particularly in sectors like renewable energy (e.g., solar plants) or healthcare initiatives under the ‘Ministry of Ayush’ could affect the availability of new contracts. Additionally, delays in obtaining regulatory approvals or ensuring compliance with environmental regulations may lead to project delays and cost overruns, impacting its financial performance. 

Business concentration in Uttar Pradesh and associated risks: The company operates its business operations from its registered office situated at Uttar Pradesh. These states contribute to a substantial portion of its revenues for the period ended January 31, 2026 and for the year ended March 31, 2025 and financial year ended on March 31, 2024, March 31, 2023. Any factors relating to political and geographical changes, growing competition and/or any change in demand may adversely affect its business. It cannot assure that it will generate the same quantum of business, or any business at all, from these states, and loss of business from one or more of them may adversely affect its revenues and profitability.

Dependence on key sectors and expansion-related challenges: The company's reliance on specific sectors, such as power (including sub-stations and solar plants), makes it vulnerable to downturns or reduced government spending in these industries, which could negatively affect its revenue. Additionally, its transition from a fire protection services provider to a broader EPC contractor, expanding into transmission, distribution, solar energy, and other infrastructure sectors, introduces risks related to managing multiple industries. This diversification may strain its resources and challenge its ability to maintain specialized expertise across all areas, potentially impacting operational efficiency and project execution. 

Outlook

Safety Controls & Devices is primarily engaged in the EPC business, focusing on the installation of substations, construction of solar plants, installation of firefighting equipment. Currently, it is also undertaking some construction projects of hospitals for the Ministry of Ayush. It has experience in executing turnkey projects across multiple sectors like transmission and distribution, solar energy, EV charging infrastructure, fire protection systems and hospital construction. It has an ISO 9001:2015 certified, issued by Quality Control Certification accredited by AOC Middle East LLC, in compliance with the quality management system. On the concern side, it depends on certain customers who have contributed a substantial portion of its total revenue from operations. Its top 10 clients contributed 100.00%, 100.00%, 99.91% and 99.83% of its total revenue for the period ended January 31, 2026 and in the fiscal year 2025, 2024 and 2023, respectively. The loss of a significant client or clients would have a material adverse effect on its financial results. Further, it operates in a competitive industry and as such it may not be successful in bidding for and winning bids for various projects to grow its business, which may have a material adverse effect on its business, financial condition, results of operations and prospects.

The company is coming out with a maiden IPO of 60,00,000 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 75-80 per equity share. The aggregate size of the offer is around Rs 45 crore to Rs 48 crore based on lower and upper price band respectively. On performance front, the revenue from operations for FY25 stood at Rs 10,256.03 lakh whereas in FY24 it was Rs 4,471.15 lakh representing an increase of 129.38%. Moreover, profit after tax for the year ended March 31, 2025, stood at Rs 899.05 lakh and for the year ended March 31, 2024 it was Rs 400.82 lakh representing an increase of 124.30%.

The company is planning to expand its footprint into other renewable energy areas, such as wind energy, hydrogen production, and battery energy storage systems. This diversification aligns with its mission to contribute to a greener future while capitalizing on emerging opportunities in the renewable energy landscape, thereby strengthening its position as a leader in sustainable energy solutions. Going forward, it intends to cater to the increasing demand of its existing customers and also increase its existing customer base by enhancing the distribution reach of its products in different parts of the country. Having its footprint in almost all the states it is easier for it to reduce its transaction costs and grab many opportunities. Further, it has expanded its portfolio to include Hybrid Substations. Hybrid substations integrate Air-Insulated Switchgear (AIS) and Gas-Insulated Switchgear (GIS) technologies, combining the benefits of both systems. Key components such as Circuit Breakers (CBs), Current Transformers (CTs), and Isolators are combined into a compact unit, utilizing SF6 gas for both insulation and arc interruption. This design improves operational efficiency and reduces land requirements.