Powerica

Powerica is coming out with a 100% book building; initial public offering (IPO) of 2,93,39,170 shares of face value Rs 5 each in a price band Rs 375-395 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 24, 2026 and will close on March 27, 2026.
The shares will be listed on BSE as well as NSE.
The face value of the share is Rs 5 and is priced 75 times of its face value on the lower side and 79 times on the higher side.
Book running lead managers to the issue are ICICI Securities, IIFL Capital Services and Nuvama Wealth Management.
Compliance Officer for the issue is Anita Praful Renuse.

Profile of the company

The company is an integrated power solutions provider specializing in diesel generator sets (DG sets), for both primary and standby applications. As one of the original equipment manufacturers (OEMs) for Cummins India, it has maintained a relationship with them for over four decades. It commenced its DG sets business in 1984, and subsequently expanded its generator set portfolio to include medium speed large generators (MSLG) in 1996. It continues to develop this segment through a collaboration with HD Hyundai Heavy Industries Co., (Hyundai), on a non-exclusive basis.

By integrating its DG set and MSLG offerings, it provides a comprehensive range of generator sets with capacities ranging from 7.5 kVA to 10,000 kVA, designed to meet the distinctive requirements of diverse industries and applications. Its generator set business comprises of DG sets powered by Cummins engines, MSLG offerings in collaboration with Hyundai, and certain allied business activities (Generator Set Business).

Building on its experience in the Generator Set Business, it entered the wind power sector in 2008 as an independent power producer (IPP). Subsequently, it developed capabilities as an engineering, procurement and construction (EPC) contractor as well as an operation and maintenance (O&M) service provider for balance of plant (BoP). Its operations in the wind power sector includes developing and operating IPP projects as well as undertaking EPC and O&M activities for BoP primarily within the wind power industry (Wind Power Business).

Proceed is being used for:

Prepayment/repayment of certain outstanding borrowings availed by the company, in part or full
General corporate purposes

Industry overview

The DG operates by converting mechanical energy into electrical power through a coordinated system of key components. The internal combustion engine burns diesel to produce mechanical energy, an alternator and transmits rotational speed to a synchronous generator. the synchronous generator converts this mechanical input into electrical energy. India’s DG industry is deeply interlinked with the country’s industrialization, urban expansion, and digital infrastructure development. The chart below shows overall performance of DGs in FY2025, with total market size across key regions in FY2025 to be around Rs 14,449 crore. Similarly, the market size in FY2023 & FY2024 were Rs 10,521 crore & Rs 13,202 crore respectively. Demand was primarily fuelled by infrastructure development, telecom expansion, IT/data centres, commercial growth, and the continued need for power reliability in Tier II and Tier III cities. The overall market grew with 25% in FY2024 compared to FY2023.

MSLG sets are critical for delivering base load/continuous duty application/standby power to India’s industrial and strategic sectors during power outages. Operating at 500–1000 revolutions per minute (RPM), these generators deliver power outputs of 3 megawatts (MW) to 10 MW units or multiple thereof. They utilize diesel, natural gas, or dual-fuel systems to drive an internal combustion engine, producing electricity via an alternator. Designed for rapid response, MSLG sets start within 20-45 seconds, ensuring reliability in emergencies. Their robust design suits India’s diverse conditions, from coastal humidity to inland heat. With fuel efficiency of 190 GMS per kilowatt-hour (kWh) and a lifespan of upto 200,000 hours (20-25 years with maintenance).

India stands 3rd globally in Renewable Energy (RE) Installed Capacity, 4th in Wind Power capacity and 3rd in Solar Power capacity. Despite strong capacity additions, there is huge untapped potential for RE installations in India. India’s renewable energy market has been driven by the solar and wind energy fuels while the balance comprises of small hydro and biopower. The renewable energy capacity (excluding hydro) in India stood at 172 GW, registering a growth of 13.8% CAGR between fiscals 2019-2025. Further as of September 2025, renewable energy capacity (excluding hydro) in India stood at 197 GW. Solar power grew at CAGR of 24% between fiscal 2019-2025, increasing from 29 GW in fiscal 2019 to around 106 GW in fiscal 2025. It further increased by 22 GW in H1 fiscal 2026. While in the same duration, wind grew 6% CAGR going from around 36 GW in fiscal 2019 to 50 GW in fiscal 2025 and further to 53 GW in H1 fiscal 2026.

Pros and strengths

Established position in the generator set market: The company has been engaged in the business of DG sets, since its incorporation in 1984. It is present across a wide suite of DG sets across low horsepower (LHP), medium horsepower (MHP) and high horsepower (HHP), with capacities ranging from 7.5 kVA to 3,750 kVA. it conducts its DG set business by way of manufacturing, marketing and supply, installation, testing and commissioning (SITC) of the sets and also undertake the related on-site works. It is one of the OEMs for Cummins and have maintained a relationship with them for over four decades. In order to widen its offerings in the Generator Sets Business, it expanded into the MSLG business in 1996. As part of the MSLG business offerings, it currently provides pre-purchase consultancy, design and engineering, sale, and O&M services integrated with Hyundai-made MSLG sets, with capacities ranging from 3,000 kVA to 10,000 kVA single unit which can be configured in multiples for parallel operation at base load power stations. With this, its generator set product capacity now ranges from 7.5 kVA to 10,000 kVA.

Strong technical and execution capabilities: Its capabilities are built on a foundation of strong technical expertise and execution prowess. With cutting-edge technology, and a skilled workforce, it excels in designing, developing, and delivering quality products. Its technical capabilities encompass advanced manufacturing processes, precision engineering, and rigorous quality control measures, ensuring consistency, reliability and innovation in every product. It has recruited skilled manpower, implemented systems and procedures and acquired machinery to manufacture quality DG sets in order to meet the requisite standards. Its factories have computerized numerical control (CNC) systems for punching, bending, and fabrication of steel metal components required for the acoustic enclosures of generator sets to meet regulations. It has developed in-house mechanical engineering skills to design as well as facilities to undertake fabrication of structures.

Large and diversified customer base: The company has a large and diversified customer base in India. Its DG set customers operate across diverse sectors, including commercial (hospitality, healthcare, banking and financial services industry - banks, education, residential and other real estate), infrastructure (retail infrastructure, logistics, railways and metros), manufacturing (industrial, process industries, dairy), agriculture (including cold storage and aquaculture), information technology/data centres, government and defense, and rentals. Over the years, the company has leveraged its experience of being a supplier of DG sets to provide turnkey and customized solutions to develop customized products for its customers leading to mutually beneficial relationships with them. The company has also been able to generate repeat business from its clients, which not only illustrates customer satisfaction, but also healthy customer relationships.

Collaborations and alliances with established industry players: The company has formed alliances with established players in their respective fields in order to remain competitive, grow in a dynamic industry landscape and to enhance its technical capabilities. It continues to maintain strong and enduring relationships with Cummins, Hyundai, GE Vernova and Vestas. Its ability to forge these alliances is a testament to its credibility, reputation, and market standing forged through years of delivering value, fostering trust, and demonstrating technical capabilities. Its associations with such renowned enterprises demonstrate the enduring confidence these established players have in its capabilities and commitment to quality. Some of these relationships have also helped it to enhance its technical capabilities. With the help of its associations and relationships, it has evolved its BoP technology to meet the requirements and specifications of internationally acclaimed OEMs.

Risks and concerns

Significant dependence on generator set business: The company is significantly dependent on its Generator Set Business, which contributed 80.50%, 85.00%, 86.30%, and 82.79% of its revenue from operations for the six-month period ended September 30, 2025, and Fiscals 2025, 2024 and 2023, respectively. its reliance on the long-established Generator Set Business significantly increases its exposure to sector-specific and product specific risks. The relative scale of the Generator Set Business compared to the Wind Power Business means that even as the latter grows, any negative impact on the former is unlikely to be sufficiently offset by wind operations. Accordingly, any negative developments affecting its Generator Set Business could have a material adverse impact on its business, financial condition, results of operations and prospects.

Revenue and cash flow dependence on PPAs: The company is dependent on its existing power purchase agreements (PPAs) to ensure the sale of electricity generated from its wind power projects and the stability of its revenue streams. Its ability to generate revenue and maintain cash flows relies on these long-term arrangements with its off-takers. While its PPAs are generally long-term in nature, there are still risks to which it is exposed. For instance, its PPAs may not fully match the economic life of all its projects, and unforeseen events, such as changes in off-taker creditworthiness, regulatory developments or market conditions, could affect their performance. Furthermore, the terms of its PPAs may expose it to certain risks that may affect its future results of operations and cash flows.

Dependence on DG Set market in key southern and western states: Its Generator Set Business is heavily dependent on the performance of the diesel generator set market in southern India and western India, particularly the markets in the states of Maharashtra, Karnataka, Tamil Nadu and Kerala, and any adverse changes in the conditions affecting these markets could adversely affect its business, results of operations and financial condition. In Fiscal 2025, the southern region accounted for 29.95% and the western region for 20.03% of the LHP DG sets market by volume. The southern region represented 28.23% of volumes for MHP DG sets, largely driven by strong information technology, manufacturing, and urban development activity in cities such as Bengaluru, Chennai, and Hyderabad. The western region accounted for 23.62% of the MHP DG sets market by volume, supported by a robust industrial base in states such as Maharashtra and Gujarat. Consequently, it cannot assure that the demand for its products in the states of Maharashtra, Karnataka, Tamil Nadu and Kerala will grow, or will not decrease, in the future.

Risk from absence of long-term contracts: The company generally does not have long-term agreements with a majority of its customers or suppliers in its Generator Set Business, which exposes it to risks arising from fluctuating demand and supply relationships. This lack of long-term commitments exposes it to the risk of variations in customer demand and supply arrangements, which could lead to fluctuations and uncertainties in its Generator Set Business. Furthermore, certain of its agreements with key customers in its Generator Set Business have onerous terms which could result in termination if breached which in turn could have a material adverse effect on its business, financial condition, results of operations and cash flows.

Outlook

Powerica is an integrated power solutions provider specialising in diesel generator sets (DG sets), medium speed large generators (MSLG), and related services. Its comprehensive product range spans capacities from 7.5 kVA to 10,000 kVA, serving the primary and standby power needs of varied industries. Leveraging its expertise, it expanded into the wind power sector in 2008 as an independent power producer and have since developed capabilities as an engineering, procurement, and construction contractor, as well as an operation and maintenance service provider for balance of plant. On the concern side, it is heavily dependent on the performance of the generator sets and wind power industry and the performance of the end-user industries for generator sets. Any adverse changes in the conditions affecting the generator sets and wind power industry or the end-user industries in which its generator sets customers operate can adversely impact its business, financial condition, results of operations, cash flows and prospects. Further, it faces high competition from conventional and other clean energy producers and any failure to respond to market changes in the power backup or renewable energy industry could adversely affect its business, cash flows, financial condition and results of operations.

The issue has been offering 2,93,39,170 shares in a price band of Rs 375-395 per equity share. The aggregate size of the offer is around Rs 1,100.22 crore to Rs 1,158.90 crore based on lower and upper price band respectively. Minimum application is to be made for 37 shares and in multiples thereon, thereafter. On performance front, its revenue from operations increased by 20.06% from Rs 2,210.00 crore in Fiscal 2024 to Rs 2,653.27 crore in Fiscal 2025. It recorded a restated profit after tax of Rs 175.83 crore for Fiscal 2025 as compared to Rs 226.11 crore for Fiscal 2024 reflecting a decline of 22.24%.

Meanwhile, it aims to capitalize on opportunities from central and state government agencies and public utilities through strategic bidding, leveraging its experience in executing wind power projects. Its focus on prudent bidding and financial discipline enables it to achieve targeted internal rates of return, driving sustainable growth. To maintain this momentum and meet its return expectations, it will continue to deploy a focussed approach, underpinned by thorough due diligence and data-driven analysis of potential projects. This disciplined strategy would allow it to navigate the market effectively and optimize returns. It intends to use economies of scale to continue to negotiate better prices of the turbines as well as supply of material and equipment for the BoP and operations and maintenance terms from its vendors. It also seeks to enhance its project execution capabilities to control cost of BoP and optimize the output of projects. At the project execution stage with multiple projects, it expects to reduce cost of manpower, infrastructure and resources.

Powerica Ltd.