Divine Power Energy IPO: From key details to financials, 5 things to know

The initial public offering (IPO) of Divine Power, a manufacturer of wires and strips of copper and aluminium, is set to open for subscription on Tuesday, June 25. Investors can submit their bids in the IPO until June 27, Thursday.

The Small and Medium Enterprises (SME) IPO is entirely a fresh issue of 56.9 lakh shares, aimed at raising ₹22.76 crore.

The minimum lot size in Divine Power IPO is 3,000 shares. This means the minimum investment amount for retail investors is ₹1,20,000. On the other hand, the minimum lot size for HNI (high net-worth individual) is two lots, or 6,000 shares, totalling an investment of ₹2,40,000.

The book-running lead manager of the issue is Khambatta Securities Limited, and Bigshare Services Pvt Ltd is the registrar. The market maker for the issue is Nikunj Stock Brokers.

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Key details about the IPO

The public issue is an SME IPO of ₹22.76 crore offering around 56.9 lakh shares for subscription. The company has set a price band of ₹36-40 per share for the issue. Share allotment will be finalised on Friday, June 28, and allottees will get shares of the company in their demat accounts on Monday, July 1. Those who are not allotted the shares in the Divine Power IPO will get the refund on July 1. The listing of shares in Divine Power IPO is expected on July 2 on NSE’s SME platform.

Objects of the issue

Divine Power intends to use the net proceeds of the issue to meet the company’s working capital requirements. Further, a portion of the fund will also be used for general corporate purposes.

About Divine Power

The company was founded on August 24, 2001, as PDRV Enterprises Private Limited. In January 2023, it was renamed Dee Power and Electricals Private Limited. Later, it was rebranded as Divine Power. According to its red-herring prospectus (RHP), the company manufactures copper and aluminium wires and strips.

Divine Power mainly sells winding wires to power distribution companies and transformer manufacturers. It has a manufacturing plant at Sahibabad in Ghaziabad, UP.

Divine Power’s finances

The company has seen consistent growth in revenue and profit since the financial year 2022 (FYY22). According to its RHP, Divine Power’s revenue from operations for FY22 stood at ₹122.5 crore which rose to ₹150.59 crore in the next financial year (FY23). In FY24, it earned revenue from operations of ₹222.1 crore.

Profit after taxes for FY22, FY23 and FY24 stood at ₹80.51 lakh, ₹2.85 crore and ₹6.41 crore respectively.

Key risks

Divine Power operates in a capital-intensive sector. Failure to meet working capital requirements will impact its business and operations.

Its dependence on a few suppliers is another key risk as the loss of any of these can impact operations.

The cost of production can fluctuate with changes in raw material prices. Moreover, Divine Power requires significant power and fuel for production, and any disruption to power sources could increase its production costs, impacting profitability.

The company’s business is largely concentrated in two states. Government policies and other factors associated with these states can impact its business operations.

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