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MV Electrosystems

• MV Electrosystems is coming out with a 100% book building; initial public offering (IPO) of 72,49,990 shares of face value Rs 5 each in a price band Rs 400 - 425 per equity share. 
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on July 30, 2026 and will close on August 3, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 5 and is priced 80 times of its face value on the lower side and 85 times on the higher side.
• Book running lead manager to the issue is Sundae Capital Advisors.
• Compliance officer for the issue is Sourabh Bansal. 

Profile of the company 

MV Electrosystems is involved in the design, development, and manufacturing of railway propulsion equipment and cable assemblies. The company provides customised electrical and electronic solutions tailored to the requirements of the railway sector, with a product portfolio that includes propulsion systems, auxiliary converters, battery chargers, and a wide range of cable assemblies. The company’s solutions are primarily deployed in electric locomotives, metro systems, and EMUs, where propulsion and robust electrical systems are critical for performance. Its cable assemblies are specifically designed to withstand challenging operating conditions while ensuring durability and seamless integration with propulsion equipment.

It carries out research and development activities in line with the modernisation initiatives of Indian Railways and the adoption of new technologies in the sector. The company undertakes manufacturing and engineering activities to support railway propulsion and electrification projects. The company’s operations are structured across two main business segments: Propulsion Equipment and Cable Assemblies. The Propulsion Equipment segment constitutes a significant share of the business, offering converters, inverters, and other critical systems that support railway electrification through efficient power management and traction control. The Cable Assemblies segment complements this by delivering customised wiring and harness solutions designed for reliable integration across rolling stock and railway infrastructure.

Proceed is being used for: 

• Funding long-term working capital requirements of the company
• Investing in research design and development activities for new power electronic equipment
• General corporate purposes

Industry overview

The railway propulsion equipment is the product or equipment that makes trains move on tracks. It includes main parts like Converter-Inverter Systems, Vehicle Control System or Train Control Management System, Driver Displays. Propulsion provides the traction power needed to pull coaches and wagons over long distances. Railway propulsion equipment is used across a wide range of applications. These include passenger trains such as metros, suburban rail, intercity trains, and high-speed rail, as well as freight trains that transport coal, steel, cement, containers, and other goods. They are also critical in urban rail systems like metros, monorails, and in specialised rail vehicles used in mining and heavy industries.

The railway propulsion equipment industry in India is witnessing steady growth, supported by large-scale electrification projects, expansion of metro and high-speed rail networks, and the government’s focus on modernising rail infrastructure. Increasing demand for energy-efficient and sustainable technologies is further driving the market. The Indian railway propulsion equipment industry has shown robust growth, increasing from $561.1 million in CY20 to $937.0 million in CY25, reflecting an 10.8% CAGR over this period. This rapid expansion is supported by India’s large-scale railway electrification drive, investments in metro networks, and the government’s emphasis on modern, efficient transport systems.

Railway cable assemblies are essential parts of today’s rail systems. It helps carry power, signals, and data between different parts of trains, whether it’s locomotives, metro coaches, or passenger trains. These assemblies combine cables, connectors, and protective coverings into one system that can handle tough railway conditions like constant shaking, changing temperatures, electrical interference, and exposure to dust and moisture. These cable assemblies used in many key areas, such as propulsion systems, braking units, communication and signalling devices, passenger information screens, and safety controls. As India moves toward more electric locomotives, metro networks, and high-speed trains, there’s a growing need for cable assemblies that are strong, lightweight, fire-resistant, and free from harmful halogen materials. Manufacturers are now focusing on making these assemblies more reliable and safer, while also meeting strict Indian and international railway standards.

Pros and strengths 

Engineering and systems design focused railway company with strong in-house R&D capabilities: The company is a systems design and engineering-focused railway technology company, distinguished by its strong inhouse research, design & development capabilities. Over the period, with an integrated approach that combines mechanical, electrical, and software engineering, it has successfully developed IGBT based 3-Phase Drive Propulsion System that meets stringent performance, safety, and regulatory requirements specified by Railways. With the increasing demand for wide variety of Rolling Stocks in India and several other regions, like High Speed Trains to Shorten Long Distance journeys, High Power Locomotives for Freight Corridors, Low Cost Light Weight Ropeways & Trams for Urban areas, EMU’s & Metro Trains and upgradations of existing platforms, its in-house engineering capabilities enable it to reduce dependency on external suppliers for designing, accelerate the induction of these new products in the country and maintain greater control over quality and proprietary intellectual property.

Strong entry barriers ensure long-term sustainability: The railway industry is characterized by substantial entry barriers, which serve as a key strength for its business and ensure long-term sustainability. Such entry barriers arise from a combination of factors including stringent and long process of product development and safety approvals, technology complexity, deep domain expertise, long qualification cycles & vendor approvals, certifications and after sales support & lifecycle integration. Further, the product design & development cycle is high capital intensive as it requires upfront investment in design, prototyping and testing infrastructure and working capital for long gestation periods. Its dedicated R&D centre is equipped with specialized teams in each of these domains. These teams have collaborated closely, gaining invaluable experience in developing rolling stock power electronics system. The company’s in-house capabilities enable it to respond swiftly to design changes or new expectations from Indian Railways, ensuring flexibility and adaptability in its offerings. Importantly, it is not reliant on any domestic or international firms for technology, which enhances its competitive edge and positions it as a self-sufficient entity in the railway propulsion sector.

Long-standing and deep relationship with Indian Railways: The company was incorporated in 2009 to supply components to Indian Railways and have gradually expanded the product category to panels & switch board cabinets, connectors and cable assemblies and cable protection products. In 2020, it advanced into higher-value engineering by initiating the indigenous design and development of propulsion equipment, a core system integral to locomotive performance. Its continuing relationship with Indian Railways serves as a clear testament to its commitment to quality, as well as its research, development and design capabilities and a testament to its operational and managerial capabilities. Further, its domain expertise in various aspects such as engineering, creation of complex software, research, design & development, as well as its adoption of technologically advanced and cost-competitive manufacturing and assembly processes have been instrumental in obtaining approval for its 3-Phase Propulsion Equipment and also repeat orders from Indian Railways.

Experienced promoter and management team: The company has an experienced senior management team which includes its Managing Director and Head - R&D, Pankaj Rastogi; its Whole-time Director, Rahul Dhawan; its Chief Financial Officer, Ajay Kumar; its General Manager - R&D (Software), Sanjay Mann. Their combined knowledge and industry experience has enabled it to anticipate and capitalize on need of the indigenously designed and developed propulsion equipment for use in India Railways and enabled it to efficiently respond to market opportunities, changes in its design based on the requirement of RDSO and introduce proprietary solutions. Its leadership team has strong understanding of requirements under technical specifications of Indian Railways combined with technical know-how that enables product understanding and new product development. It is led by its Promoter, Mohit Vohra, who has helped expand its operations and has been associated with the company as a director since July 03, 2009. Under Mohit Vohra leadership, it has been able to expand its operations by indigenously in-house designed and developed 3-Phase Propulsion Equipment which has a wide application in railways segment, domestically and internationally also.

Risks and concerns

Concentration of revenue from key customers: The company is dependent on a limited number of public and private sector customers. Its revenue from operations is concentrated with, and it is dependent on, a limited number of customers. Its top 10 customers contributed 93.04%, 92.01% and 86.73% of its revenue from operations during the Financial Years ended March 31, 2026, March 31, 2025 and March 31, 2024 respectively. Cancellation of orders, if any, by customers or delay or reduction in their orders could have a material adverse effect on its business, results of operations and financial condition.

Reliance on top 10 suppliers for raw materials: The company is dependent on its suppliers for uninterrupted supply of raw materials which are majorly procured domestically by the company. Its top 10 suppliers accounted for 94.87%, 76.37%, and 66.82% of its total cost of materials consumed during the financial years ended March 31, 2026, March 31, 2025, and March 31, 2024, respectively. Further, the costs of the raw materials which it uses in its assembling cum manufacturing process are subject to volatility in prices in domestic and international market/s. Such suppliers may not perform, or be able to perform their obligations in a timely manner, or at all and any delay, shortage, interruption, reduction in the supply of or volatility in the prices of raw materials on which it relies may have a material adverse effect on its business, results of operations, financial condition, cash flows and future prospects.

Dependence on imported raw materials and components: The company relies on imports from certain countries for certain raw material for its present products. Further, for 3-Phase Propulsion Equipment, it will import raw material or electronic components from countries, such as China, UK, Hong Kong & Singapore and also source imported raw material from local suppliers / office of such foreign suppliers. Supplies of such imports / imported materials may be disrupted by changes in government regulations or policies, deterioration in economic conditions or escalation of trade tensions and any changes in the pricing and quality of Its raw material / components including Insulated Gate Bipolar Transistors, capacitors, semiconductors, microprocessors, thyristor, etc could cause significant disruptions to and adversely impact its business operations.

Failure to develop and commercialize new products: Its success significantly depends on Its ability to develop and commercialize new electrical equipment & power electronics systems for usage in railways industry, in India and overseas market. This requires it to design, develop, test, and assemble / manufacture power electronic equipment as per the requirements of Indian Railways / RDSO, and obtain other necessary regulatory approvals, if required, while complying with applicable regulatory and safety standards. Further, in respect of overseas markets, it is required to adapt Its product designs and technologies to meet the technical specifications, certification requirements, and safety standards prescribed by the relevant foreign regulatory authorities. Any failure or delay in meeting such country-specific standards, or in adapting to evolving technologies or customer preferences, may adversely affect Its ability to successfully commercialize its products in those international markets.

Outlook  

MV Electrosystems is a technology-driven company engaged in the design, development, assembly and manufacturing of electrical & power electronics equipment used in railway rolling stock including IGBT based 3-Phase Drive Propulsion equipment for electric locomotives, switchgear panels for railway coaches & EMU’s, cable protection & management products and electrical components, systems & sub-systems. On the concern side, it does business with its customers on purchase order basis or through tenders issued by them from time to time and does not have long-term contracts with most of them. Further, its business tends to vary from quarter to quarter based on the timing of release of various tenders and successful award of purchase orders to it based on the terms of the tender. In case it loses out on bid, there could be adverse effect on its business, financial condition, cash flows, results of operations and growth prospects. Its future results of operations and cash flows can fluctuate materially from period to period depending on the timing of award of order.

The issue has been offering 72,49,990 shares in a price band of Rs 400-425 per equity share. The aggregate size of the offer is around Rs 290.00 crore to Rs 308.12 crore based on lower and upper price band respectively. Minimum application is to be made for 34 shares and in multiples thereon, thereafter. On performance front, its total income reduced by 22.97% to Rs 497.91 million in Fiscal 2026 as compared to Rs 646.37 million in Fiscal 2025. The company reported a loss after tax of Rs 126.29 million in Fiscal 2026, compared with a profit after tax of Rs 14.03 million in Fiscal 2025.

Meanwhile, it operates in a high entry-barrier industry with strong engineering requirements. Its scalable design-to-delivery model and portfolio of high-value, high-complexity products support sustainable margins and long-term growth opportunities. Its business model is designed to be scalable and capital-efficient, enabling it to expand capacity and product offerings in line with market demand. It remains focused on developing and delivering high-value, technology-driven products that cater to evolving requirements of Indian Railways. This focus allows it to enhance margins, strengthen its market position, and ensure sustainable growth. Looking ahead, its strong engineering foundation, integrated value chain, and commitment to design excellence offer a compelling opportunity to enter into rolling stock manufacturing. This strategic expansion aligns with the growing momentum in infrastructure and mobility sectors and represents a natural extension of its capabilities.