Transrail Lighting IPO: Key strengths, risks and financials from RHP you need to know

Transrail Lighting IPO, with a price band of ₹410 to ₹432 per share, will open for subscription on Thursday, December 19. The issue, which will conclude on December 23, aims to raise ₹838.91 crore via a fresh issue of shares valued at ₹400 crore and an offer-for-sale of 1.02 crore shares. Investors can bid for at least 34 shares, requiring an investment of ₹14,688. As the initial share sale is just two days away, here's a look at the company's strengths, risks, and financials.

Transrail Lighting IPO: Strengths

• The company has completed more than 200 projects, showcasing its extensive implementation skills in the power transmission and distribution vertical.
• It has manufacturing facilities in Maharashtra, Gujarat, and Silvassa, producing galvanised steel towers, conductors, and poles.
• It has a strong and diversified order book.
• Transrail Lighting has strong in-house designing and engineering.
• The company has experienced promoters with strong management team.
• The EBITDA margin, as of June 2024, was 13.12%, and for FY24, FY23, and FY22, it stood at 11.71%, 9.32%, and 8.75%, respectively.

Transrail Lighting IPO: Risks

• The order book is subject to modification, cancellation or delay which may affect business and financial condition.
• As power transmission and distribution EPC contracts have long execution periods and time overruns, the estimates related to the project and revenue may vary from the actual cost incurred and actual revenue generated.
• It substantially depends on tenders floated by government and public sector undertakings (PSU). As of three month period ended June 2024, their revenue contributed 70% of the total revenue.
• Exposed to foreign currency fluctuation risks.
• The company's books of accounts were inspected by the Ministry of Corporate Affairs in the past, and certain non-compliances were found.
• It had previously received a show cause notice from the Reserve Bank of India (RBI) for FEMA non-compliance.

Transrail Lighting IPO: Financials