Sedemac Mechatronics Ltd. Share Price

Sedemac Mechatronics

• Sedemac Mechatronics is coming out with a 100% book building; initial public offering (IPO) of 80,43,300 shares of Rs 10 each in a price band Rs 1287-1352 per equity share. 
• Not more than 50% 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 35% for the retail investors.
• The issue will open for subscription on March 4, 2026 and will close on March 6, 2026.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 128.70 times of its face value on the lower side and 135.20 times on the higher side.
• Book running lead managers to the issue are ICICI Securities, Avendus Capital and Axis Capital.
• Compliance Officer for the issue is Prasad Rajendra Chavan.

Profile of the company

The company designs and supplies critical, control-intensive electronic control units to major vehicle and industrial equipment manufacturers in India, the United States, and Europe. Its main products use innovative, in-house technologies and are essential for equipment to work such as electronic control units (ECUs) for vehicles and generators. Its strong technical team continuously develops and improves products, helping its customers adopt new technology, stay competitive, and ensure reliable performance across mobility and industrial sectors. The majority of its revenue from operations is attributed to products which incorporate novel control technologies that are conceived and developed entirely in-house, enabling it to offer fresh proprietary solutions that provide distinct value to end-users or its original equipment manufacturer (OEM) customers. 

It is the first company in India to develop, design and manufacture sensorless commutation (SLC) based integrated starter generators (ISG) ECUs for two-wheeler / 3-wheelers (2/3Ws) internal combustion engine (ICE) powered vehicles. It has shipped sensorless ISG ECUs, and ECUs integrating the functionality of ISG with electronic fuel injection (ISG+EFI) ECUs for more than 9.2 million small engine 2/3Ws between Fiscal 2018 and nine months ended December 31, 2025. It held around 35% market share of domestic ISG ECU market (for 2W and 3W combined) in terms of volume and are amongst the top 4 players for the nine months ended December 31, 2025.

The company is also the leaders in India for genset controllers (GC) with an estimated market share of 75%-77% during the nine months ended December 31, 2025 and are amongst the key global players with a market share of 14% globally with its offerings of genset controllers and EFI ECUs for this market for Fiscal 2025. Furthermore, it introduced electronic governing (eGov) as an integrated feature into genset controllers in 2014 and it pioneered the introduction of integrated eGov technology in genset controllers in India.

Proceed is being used for:

• Carrying out the offer for sale of up to 8,043,300 equity shares of face value of Rs 10 each by the selling shareholders
• Achieving the benefits of listing the equity shares on the stock exchanges

Industry overview

The company operates in the mobility (2/3W vehicles) and industrial (generators) sectors in India, USA and EU. The Indian two-wheeler market sales grew at 3% CAGR (Fiscal 2020–Fiscal 2025), driven by improving demand sentiments and normalization of economic activity and increased mobility. The genset industry is growing steadily due to energy security needs, especially in Asia-Pacific, with demand for both traditional and cleaner technologies.

The 2W and 3W ICE segments have witnessed significant growth in recent years, driven by increasing demand for affordable and efficient transportation solutions. As industry continues to evolve, the integration of electronic and electrical products has become a key focus area for manufacturers. The 2W and 3W ICE segments have traditionally been dominated by mechanical systems. However, with the increasing need for improved performance, safety, and efficiency, manufacturers are now incorporating advanced electronic and electrical products into their vehicles. Some of the key drivers of this trend include emission regulations, safety requirements, performance needs, connected mobility and electrification. Some of the key electronic and electrical products that are gaining traction in the two-wheeler and three-wheeler ICE segments include Electronic Fuel Injection (EFI), Anti-lock Braking Systems (ABS), Combi brake system (CBS), telematics and others. The integration of electronic and electrical products in two-wheelers and three-wheelers is a growing trend that offers several benefits, including improved performance, reduced emissions, and enhanced safety.

As of Fiscal 2025, the Indian genset market by volume was 157 thousand units, up from 85 thousand units in 2020, registering a CAGR of 13% during the period. The growth is attributed to rising demand for backup power in key sectors such as real estate, data centers, healthcare, infrastructure, manufacturing, and telecom. Frequent power supply disruptions and inadequate grid infrastructure in several regions continue to reinforce the need for reliable backup power solutions.

Pros and strengths

Agility at scale through integrated design, engineering, and manufacturing enables rapid innovation and swift market response: Its agility at scale is derived from complete ownership of product design, engineering, and manufacturing. Such ownership enables it to move with agility from concept and validation to large-scale production without dependence on third-party licensors, technology partners, or outsourcing. As a result, it retains full control throughout the product lifecycle, supporting prompt and flexible responses to customer requirements, regulatory developments, and unexpected technical or supply chain challenges. This degree of integration provides competitive advantages over peers.

Synergies driving cross market technology use, procurement advantages, and robust partnership: As originators and owners of its core technologies, it controls both their initial development and continual evolution. This complete ownership and its focus towards actively looking for opportunities that allow it to transfer proven technical solutions and technical learnings from one market to an adjacent market have led it to establish strong synergies in its efforts across markets. As a result, it not only enhances technical performance and robustness of its offerings in new markets but also achieve significant benefits through consolidated procurement and economies of scale while building strong, entrenched relationships with its key suppliers.

Continued ability to innovate, scale, and embed differentiated technologies: Its sustained capacity to launch and scale differentiated technologies across diverse markets clearly sets it apart from competitors. it consistently turns concepts into real-world solutions, drawing on the expertise of its highly qualified engineers and scientists, supported by institutional knowledge. This team approach ensures innovation is continuous rather than occasional, enabling rapid product evolution in response to changing market dynamics and customer needs. Its emphasis on continual innovation and improvement is evident not only in the generational changes in its GC and ISG ECU products over time but also through features including idle start-stop and torque assist that have improved its customers’ or end-users' experience.

Quality, traceability, and reliable delivery: A critical foundation of its sustained success lies in its commitment to quality and reliability, especially in critical, control intensive products where a failure results in the end-user’s equipment being rendered unusable. Its products undergo rigorous, validation protocols to ensure robust performance under demanding conditions. It proactively monitors product outcomes using tailored failure metrics for each sector it serves, allowing it to benchmark its performance and continuously enhance its processes.

Risks and concerns

Revenue reliance on TVS Motor Company: The company has a high degree of revenue concentration with a small number of customers, particularly, a key customer, TVS Motor Company (TVS Motor), which contributed 75.48%, 80.46%, 83.46% and 79.05% of its revenue from operations for the nine months ended December 31, 2025, Fiscals 2025, 2024 and 2023, respectively, which exposes it to significant business risk if demand from these customers reduces or commercial relationships change which could have a significant negative effect on its business, profitability, and cash flows.

Concentration risk in the mobility segment: The company is significantly dependent on the mobility segment which contributed 84.63%, 85.69%, 85.64% and 80.37% of its revenue from operations for the nine months ended December 31, 2025, and Fiscals 2025, 2024 and 2023, respectively. Any downturn, cyclical fluctuation, or adverse development in this segment could materially impact its business, results of operations, and financial condition. Any changes in the 2/3W industry (2/3W refers to both engine-powered and electric 2/3Ws vehicles, including motorcycles, scooters, auto-rickshaws, electric two/three wheelers and electric bicycles) whether due to economic conditions, regulatory policy, consumer demand, or supply chain disruptions, can have a significant impact, potentially negative, on its business, results of operations, and financial condition.

High dependence on top suppliers for raw materials: A substantial proportion of the raw materials required for its manufacturing operations including semiconductors, SMD components, and PCBs is sourced from its top 10 suppliers. It is significantly dependent on its top 10 suppliers for primary raw materials, wherein purchases from top 10 suppliers constituted 63.63%, 63.64%, 65.63% and 63.34% of its total purchases during the nine months ended December 31, 2025, and Fiscals 2025, 2024 and 2023, respectively. Any disruption, delay, or inability of these suppliers to fulfil their commitments may materially and adversely affect its production, financial performance, and growth prospects.

Risks arising from genset market dynamics: Its business in the generator (genset) industry, i.e., the industrial segment, is positioned at two key stages in its product development cycle. Its genset controllers are in the ‘Sustaining Industry Position’, where its products are already widely adopted, but it faces ongoing risks from market changes and competition. Its results are affected by demand for gensets in India and globally, i.e., the industrial segment, which contributed 15.37%, 14.31%, 14.36% and 19.63% of its revenue from operations for the nine months ended December 31, 2025, and Fiscals 2025, 2024 and 2023, respectively. Any sustained decline in market acceptance or a shift towards alternative energy could materially impact its business, operations, and financial condition.

Outlook

Sedemac Mechatronics is primarily engaged in the business of development, manufacture and supply of innovative controllers/ECUs. It is a global supplier of high-volume critical controllers/ECUs having novel motor, engine, supervisory and other control technologies developed in-house. The company operates in various sectors, namely, power generators, automotive, powered equipment, electric vehicles and electric bikes etc. The company has well equipped R&D Centre and the world class manufacturing plants. The Company is the key supplier to various established automotive & off highway industry players, locally & globally. On the concern side, it imports critical raw materials such as semiconductors and printed circuit boards from People’s Republic of China (China), which exposes it to heightened supply chain and geopolitical risks that may materially affect its costs, production schedules, and business continuity and thereby its business, results of operations, cash flows, and future growth prospects. Additionally, it is highly dependent on sales of its ISG ECU, and integrated ECUs combining ISG and Electronic Fuel Injection Electronic Control (ISG+EFI ECU) products in the two/three-wheeler (2/3W) industry.

The issue has been offering 80,43,300 shares in a price band of Rs 1287-1352 per equity share. The aggregate size of the offer is around Rs 1,035.17 crore to Rs 1,087.45 crore based on lower and upper price band respectively. Minimum application is to be made for 11 shares and in multiples thereon, thereafter. On performance front, total income increased by 23.63% to Rs 6,625.36 million in Fiscal 2025 from Rs 5,358.96 million in Fiscal 2024. Profit for the year increased significantly to Rs 470.45 million in Fiscal 2025 from Rs 58.78 million in Fiscal 2024.

Meanwhile, the company is committed to ongoing investment in differentiated, innovative technologies and products tailored to the unique needs of each market. Its approach is to design and deliver control-intensive offerings that provide tangible value and critical functionality for OEM customers, such as improved performance, customer experience, and enable them to comply with regulatory norms. It has successfully developed technologies with such differentiation and offered related products to the markets, including sensorless motor control (ISG, ISG+EFI ECUs), integration of electronic governing in GCs, Transistor Controlled Ignitions (TCIs) with SmartIgn technology, rare-earth-free motors, and continue to do so. Furthermore, it does not pursue widely available technologies/ products which lack distinctiveness. By avoiding commoditized products and focusing on value-added differentiation, it secures a reputation as a provider of innovative, complex technologies and products, enhancing industry-wide respect, supporting leadership, and maintaining healthy profitability that supports fueling further technology development efforts.