VIDYA WIRES LIMITED IPO Explain

Vidya Wires IPO Overview

40+ year legacy copper/aluminium wires manufacturer raising ₹300.01 cr via fresh issue ₹274 cr + OFS ₹26.01 cr of 5.77 cr shares. Price: ₹48-52. Lot: 288 shares (₹14,976 min). Mainboard listing BSE/NSE.

Funds for ALCU subsidiary capex (₹140 cr), debt repayment (₹100 cr).

Founded 1981, 44 years old. 4th largest in India, 5.7% market share. 19,680 MTPA capacity, expanding to 37,680 MTPA.

Products: Enamelled wires, copper strips, conductors, busbars, PV ribbons.

Industries: Power, electrical, EV, railways, renewables. 8,000+ SKUs. 139 employees. Gujarat-Maharashtra 69% revenue₹6-10 (11.5-19%).

Lead: Pantomath, IDBI Capital.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	Mainboard
IPO Open Date	3 December 2025 (Tuesday)
IPO Close Date	5 December 2025 (Thursday)
Allotment Date	8 December 2025 (Sunday) – Expected
Credit to Demat	9 December 2025 (Monday) – Expected
Refund Initiation	9 December 2025 (Monday) – Expected
Listing Date	10 December 2025 (Tuesday) – Tentative
Price Band	₹48 – ₹52 per share
Face Value	₹1 per share
Lot Size	288 shares
Min Investment (Retail)	₹14,976 (1 lot / 288 shares at upper band)
sHNI Investment	TBD
bHNI Investment	TBD
Issue Size	₹300.01 crore total (at upper band)
Fresh Issue	₹274.00 crore (91.3%) – 5,26,92,307 shares
Offer for Sale (OFS)	₹26.01 crore (8.7%) – 50,01,000 shares by promoters Shyamsundar Rathi (25,00,500) & Shailesh Rathi (25,00,500)
Total Shares Offered	5,76,93,307 equity shares (5.77 crore)
Listing	BSE & NSE (Mainboard – Not SME!)
Post-Issue Market Cap	~₹1,300 crore (at upper price band)
P/E Ratio	~13x (FY25 basis – Reasonable)
EPS	~₹3.90-4.00 (estimated)
ROE	Not disclosed

Issue Break-up

Category	Allocation	Percentage
QIB (Qualified Institutional Buyers)	50% allocation	50%
NII (Non-Institutional Investors)	15% allocation	15%
Retail Individual Investors	35% allocation	35%

Note: Mainboard IPO allocation pattern (50% QIB, 35% Retail, 15% NII). No anchor portion disclosed in available sources.

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹274.00 crore gross / ~₹254 cr net after issue expenses ~₹20 cr) will be used for:

Funding Capital Expenditure Requirements Towards Setting Up Greenfield Project by Subsidiary ALCU Industries Private Limited – ₹140.00 crore (55.1%)
- Major strategic capex for 18,000 MTPA greenfield unit at Narsanda, Gujarat
- ALCU Industries Private Limited (wholly owned subsidiary)
- New facility to manufacture aluminium and copper wires
- Near-doubling of capacity: 19,680 MTPA (current) → 37,680 MTPA (post-expansion, 91% increase)
- Land purchased (18,000 sq. meters at Narsanda GIDC)
- State-of-the-art equipment for vertical integration
- Positions company for next phase of growth
Repayment and/or Prepayment of Certain Outstanding Borrowings – ₹100.00 crore (39.4%)
- Debt reduction from banks
- Outstanding debt: ₹206.14 crore as of November 14, 2025
- Post-IPO, ~₹106 cr debt remains
- Deleveraging to reduce finance costs
General Corporate Purposes – ₹14.00 crore (5.5%)
- Working capital, strategic initiatives, contingencies

OFS Proceeds (₹26.01 crore):

Goes to selling promoters:
- Shyamsundar Rathi: Selling 25,00,500 shares (₹13 cr at upper band)
- Shailesh Rathi: Selling 25,00,500 shares (₹13 cr at upper band)
Partial exit/liquidity for promoters
50,01,000 shares (8.7% of issue) being sold

Strategic Focus:

Massive capacity expansion: 55.1% (₹140 cr) for near-doubling capacity via ALCU greenfield project
Significant debt repayment (39.4% or ₹100 cr) – but ₹206 cr outstanding means ~₹106 cr remains post-IPO
Clear growth mandate with subsidiary expansion
91% fresh proceeds for genuine growth vs 9% promoter exit

Note: 91% fresh issue for growth, 9% OFS for promoter partial exit.

Lead Managers & Registrar

Book Running Lead Managers (BRLMs – 2 Joint Lead Managers):

Pantomath Capital Advisors Private Limited
- Website: www.pantomathgroup.com
IDBI Capital Markets & Securities Limited
- Website: www.idbicapital.com

Registrar:

MUFG Intime India Private Limited (formerly Link Intime India Private Limited)
Address: C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400083, Maharashtra
Phone: +91-22-4918 6270, +91 8108114949
Website: www.linkintime.co.in/Initial_Offer/public-issues.html

Promoters & Management

Key Promoters – Rathi Family (3 Promoters):

Mr. Shyamsundar Rathi (Age ~60s) – Chairman
- Founder and visionary behind Vidya Wires
- 40+ years experience in wires and conductors industry
- Selling 25,00,500 shares in OFS (₹13 cr at upper band)
Mr. Shailesh Rathi – Managing Director/Director
- Family member driving operations
- Selling 25,00,500 shares in OFS (₹13 cr at upper band)
Ms. Shilpa Rathi – Promoter
- Family member

Company History:

Founded 1981 – 44 years old! (One of oldest in this IPO batch)
Legacy: Over 4 decades in copper and aluminium wires manufacturing
Evolution: From small-scale wire manufacturer to 4th largest in India (5.7% market share in FY25 per CareEdge)
Current Status: 19,680 MTPA installed capacity, expanding to 37,680 MTPA
Workforce: 139 permanent employees + 394+ contract workers (as of November 14, 2025)
Subsidiary: ALCU Industries Private Limited (wholly owned) – setting up 18,000 MTPA greenfield unit

Company Contact:

Registered Office: Plot No. 8/1-2, GIDC, Opposite SLS Industries, Vithal Udyognagar, Anand, Gujarat – 388121
Manufacturing: Anand, Gujarat (current), Narsanda, Gujarat (new ALCU facility)
Phone: +91 74340 38300
Website: www.vidyawire.com
CIN: U31300GJ1981PLC004425

COMPANY OVERVIEW

Establishment & Background:

Founded in 1981 (44 years old – oldest company in this batch!)
Industry: Wires & Conductors – Copper & Aluminium Winding and Conductivity Products
Headquartered in Anand, Gujarat
Manufacturing: Anand, Gujarat (19,680 MTPA capacity)
Market Position: 4th largest manufacturer in India with 5.7% market share in FY25 (per CareEdge Report)
Workforce: 139 permanent employees + 394+ contract workers (November 14, 2025)

Business Model:

Manufacturer of High-Quality Copper and Aluminium Wires & Conductors
Product Portfolio (8,000+ SKUs under one roof!):
1. Enamelled Wires: Precision-engineered copper winding wires with insulation for motors, transformers
2. Enamelled Copper Rectangular Strips: Rectangular cross-section wires for specialized applications
3. Paper Insulated Copper Conductors: Traditional insulation for transformers and power equipment
4. Copper Busbar and Bare Copper Conductors: Power distribution, switchgear, electrical panels
5. Specialised Winding Wires: Custom wires for electric motors, generators, industrial equipment
6. PV Ribbon (Solar): Photovoltaic ribbons for solar panel interconnections – clean energy focus
7. Aluminium Paper Covered Strips: Lightweight conductors for transformers and electrical equipment
Target Industries & Applications:

Power Generation & Transmission (48% revenue): Grid infrastructure, power plants, transmission lines
Electrical Systems: Switchgear, control panels, electrical equipment
Electric Motors: Industrial motors, appliances, HVAC systems
Clean Energy Systems: Solar (PV ribbons), wind turbines, renewable energy infrastructure
Electric Mobility (EVs): Electric vehicle motors, charging infrastructure, battery management
Railways: Train traction motors, signaling systems, railway electrification
Transformers: Power transformers, distribution transformers
Manufacturing Infrastructure:

Current Installed Capacity: 19,680 MTPA (metric tons per annum)
Location: Anand, Gujarat (Plot No. 8/1-2, GIDC Vithal Udyognagar)
Capacity Utilization: 70.31% (FY23) → 80.95% (FY24) → 86.57% (FY25) → 94.51% (Q1 FY26) – rapidly increasing!
Expansion (IPO funded via ALCU): +18,000 MTPA greenfield unit at Narsanda, Gujarat
Post-Expansion Total: 37,680 MTPA (91% capacity increase)
Technology: Precision manufacturing, quality control, backward integration
Customer Base:

Reputed clients: Adani Wilmar Limited, Schneider Electric Infrastructure Limited, Suzlon Energy Limited, and others
Long-standing relationships spanning over a decade
Diverse customer base across industries
Supplier Relationships:

Key suppliers: Vedanta Limited (copper), Hindalco Industries Ltd (aluminium), Union Copper Rod LLC
Partnerships spanning over a decade
Both domestic (Gujarat 71-87% of purchases) and international (Japan) suppliers
Geographic Revenue:

Gujarat + Maharashtra: 68.66% (Q1 FY26), 69.88% (FY25), 69.45% (FY24), 65.54% (FY23) – heavy concentration!
Balance from other states pan-India

Market Position:

Positioned as 4th largest wires & conductors manufacturer in India (5.7% market share FY25 per CareEdge)
Indian wires & cables market: ₹60,000+ crore, growing at 8-10% CAGR
Competing with established giants: Polycab India (₹50,000+ cr market cap, 25%+ market share), KEI Industries (₹20,000+ cr), RR Kabel, Finolex Cables, V-Guard Industries
Niche focus on copper/aluminium winding wires vs full-range cables/wires players
40+ years legacy provides credibility
Strong positioning in power, renewable energy, EV sectors – structural growth tailwinds

Operations:

Registered & Manufacturing: Plot No. 8/1-2, GIDC, Vithal Udyognagar, Anand, Gujarat
New Facility (ALCU): 18,000 sq. meters land at Narsanda GIDC, Gujarat (18,000 MTPA greenfield)
Installed Capacity: 19,680 MTPA (expanding to 37,680 MTPA)
Capacity Utilization: 94.51% (Q1 FY26) – operating near full capacity, expansion critical
Technology: Precision engineering, quality assurance, vertical integration
8,000+ SKUs: Massive product range under one roof

Company Strengths

Explosive Revenue & Profit Growth – Revenue +25%, PAT +59% (FY24 to FY25):
- FY25 revenue: ₹1,486.39 cr (+25.3% vs ₹1,186.07 cr FY24)
- FY25 PAT: ₹40.87 cr (+59.1% vs ₹25.69 cr FY24)
- Three-year trajectory: ₹1,011.43 cr (FY23) → ₹1,186.07 cr (FY24) → ₹1,486.39 cr (FY25) – 47% growth in 2 years
- Analyst Dilip Davda notes: “The company posted steady growth in its top and bottom lines for the reported periods”
- PAT margin improving: 2.13% (FY23) → 2.17% (FY24) → 2.75% (FY25)
- Consistent trajectory showing scalability
Strong GMP (₹6-10) – 11.5-19% Expected Listing Gains:
- GMP of ₹6-10 as of Nov 28-Dec 2 (11.5-19.2% premium)
- High of ₹10 on Nov 29
- Latest: ₹6 (11.5% premium) per investorgain.com Nov 30
- Expected listing price: ₹58-62
- Positive grey market sentiment
- Potential for double-digit Day 1 listing gains
- One of the better GMPs in current batch
44-Year Legacy & 4th Largest in India – Established Market Leader:
- Founded 1981 (44 years old!) – oldest company in this IPO batch
- 4th largest manufacturer in India with 5.7% market share in FY25 (per CareEdge Report)
- Over 4 decades of experience in wires and conductors
- Survived multiple economic cycles and industry disruptions
- Long-standing customer relationships spanning decades
- Brand recognition and credibility established
- Track record provides significant credibility vs newly incorporated SMEs
Massive Capacity Expansion – 91% Increase to 37,680 MTPA:
- Current capacity: 19,680 MTPA, expanding to 37,680 MTPA (91% increase!)
- IPO proceeds (₹140 cr or 55.1%) funding 18,000 MTPA greenfield unit via ALCU subsidiary
- Capacity utilization: 94.51% (Q1 FY26) – operating near full, expansion critical
- New Narsanda, Gujarat facility positioned for next growth phase
- Near-doubling of capacity provides multi-year revenue visibility
Structural Demand Tailwinds – Power, Renewables, EVs, Railways:
- Power Generation & Transmission: 48% revenue – India’s grid expansion, rural electrification
- Clean Energy: PV ribbons for solar, wind turbine wires – renewable energy push
- Electric Mobility: EV motors, charging infrastructure – EV adoption accelerating
- Railways: Railway electrification, high-speed rail projects
- Government focus: National Solar Mission, EV mission, railway electrification, grid modernization
- All end-markets have 10-15% CAGR growth potential
Backward Integration & 8,000+ SKUs – Diversification:
- Control over key manufacturing processes
- 8,000+ SKUs under one roof – massive product diversification
- Multiple product categories reducing dependency on single wire type
- Serves 7+ industries across applications
- Customization capabilities for client-specific requirements
- Cross-selling opportunities across customer base
Reputed Customer & Supplier Base – Long-Standing Relationships:
- Customers: Adani Wilmar, Schneider Electric, Suzlon Energy (renewable energy leader), and others
- Suppliers: Vedanta (copper giant), Hindalco (aluminium leader), Union Copper Rod
- Relationships spanning over a decade
- Repeat business validates product quality
- Established supply chain reliability
Mainboard Listing – Higher Liquidity vs SME:
- Listing on BSE & NSE mainboard (not SME platform!)
- Higher liquidity and institutional participation
- Better exit opportunities for investors
- Faster migration potential to larger indices (Nifty 500, BSE 500)
- Access to larger pool of investors
Reasonable Valuation – P/E ~13x & “Reasonably Priced” Analyst View:
- Analyst Dilip Davda verdict: “Based on its recent financial data, the issue appears reasonably priced“
- P/E of ~13x (FY25 basis) – attractive for established 44-year-old company with growth
- Lower than larger peers: Polycab trades at 30-40x, KEI at 25-30x
- Strong growth (revenue +25%, PAT +59%) justifies valuation
- Margin of safety at current pricing
91% Proceeds for Growth (Only 9% Promoter Exit):

Fresh issue: ₹274 cr (91.3%) for genuine growth and deleveraging
OFS: ₹26.01 cr (8.7%) – minimal promoter exit
Demonstrates promoter confidence
Capital primarily for capacity expansion (₹140 cr) and debt reduction (₹100 cr)

Key Risks & Challenges

Thin Profit Margins – 2.7% PAT Margin Leaves No Buffer:
- PAT margin: 2.75% (FY25), 2.17% (FY24), 2.13% (FY23) – razor-thin profitability
- Risk noted by analysts: “Thin net margins” – ~2.7% PAT margin leaves limited buffer to absorb shocks
- Wires/cables manufacturing inherently low-margin business (commodity-like)
- Small margin for error – any cost overrun, pricing pressure, raw material spike = losses
- Cannot absorb economic downturns or competitive price wars
- Operating leverage limited due to structural thin margins
Negative Operating & Investing Cash Flows – Liquidity Concerns:
- Negative operating cash flow: ₹3.71 cr (Q1 FY26), ₹16.84 cr (FY25) – red flag!
- Negative investing cash flow: ₹9.56 cr (Q1 FY26), ₹7.54 cr (FY25), ₹3.68 cr (FY24), ₹5.65 cr (FY23)
- Negative financing cash flow: ₹31.84 cr (FY23)
- Sustained negative cash flows despite profitability indicates working capital blockage
- May limit ability to fund operations, expansion, or service debt
- Cash generation capability questionable
- Dependent on external financing despite being profitable on P&L
Heavy Debt Burden – ₹206 Cr Outstanding, Only ₹100 Cr Repaid:
- Outstanding debt: ₹206.14 crore (as of November 14, 2025)
- IPO proceeds: ₹100 cr (39.4%) for debt repayment
- Post-IPO, ~₹106 crore debt remains – still highly leveraged!
- Any failure to service loans can harm operations and financial position
- Continuous finance cost burden impacting thin margins
- Debt-to-equity likely remains elevated post-IPO
Extreme Copper Dependency – 93% Copper Products Revenue:
- Copper-based products: 93.27% (Q1 FY26), 93.18% (FY25), 94.73% (FY24), 96.29% (FY23) of revenue
- Single commodity concentration creates massive vulnerability
- Any copper industry headwinds = catastrophic impact
- Limited diversification into aluminium (only 6-7% revenue)
- Trapped in copper market cyclicality
Raw Material Price Volatility – 93% Copper Rod/Cathode Cost:
- Copper rod & cathode: 92.09% (Q1 FY26), 93.87% (FY25), 96.51% (FY24), 96.19% (FY23) of raw material costs
- Copper prices linked to London Metal Exchange (LME) – global commodity volatility
- Any fluctuation or supply disruption = production costs, timelines, profitability impact
- Limited pricing power to pass on cost increases due to competition
- Margin compression risk during copper price spikes
- No hedging strategies mentioned
- Currency risk on copper imports
Geographic Concentration – 69% Revenue from Gujarat-Maharashtra:
- Gujarat + Maharashtra: 68.66% (Q1 FY26), 69.88% (FY25), 69.45% (FY24), 65.54% (FY23)
- Heavy two-state concentration creates vulnerability
- Regional economic slowdown, political instability, natural disasters = severe impact
- Limited pan-India presence despite 44-year history
- Expansion beyond West India requires significant investment
Supplier Geographic Concentration – 70-87% Purchases from Gujarat:
- Gujarat suppliers: 80.60% (Q1 FY26), 70.47% (FY25), 87.05% (FY24), 81.92% (FY23) of purchases
- Over-reliance on single-state suppliers
- Regional supply disruptions = production halt
- Vulnerable to Gujarat-specific issues (floods, power outages, labor unrest)
Highly Competitive & Fragmented Market – Price Wars:
- Analyst notes: “Competitive industry: Wires & conductors is a fragmented market with both organised and unorganised players, keeping pricing power in check“
- Competing with giants:
  - Polycab India: ₹50,000+ cr market cap, 25%+ market share, diversified cables/wires
  - KEI Industries: ₹20,000+ cr market cap, established brand
  - RR Kabel, Finolex Cables, V-Guard, Havells: Strong regional players
- Plus hundreds of unorganized small-scale wire manufacturers
- Price-based competition eroding thin margins
- Customer bargaining power high
- Vidya’s 5.7% market share minuscule vs Polycab’s 25%+
Execution Risk in ALCU Expansion – ₹140 Cr Capex:
- Major risk noted: “Execution risk in expansion: The new ALCU project involves large capex (₹140 cr); delays, cost overruns or slower-than-expected ramp-up could affect returns and leverage metrics”
- Greenfield project execution challenges
- Construction delays, equipment delays from China/international
- Technology integration issues
- Slower capacity ramp-up than projected
- Working capital requirements for new facility
- If expansion fails, ₹140 cr at risk and debt remains elevated
Power Industry Concentration – 48% Revenue Single Sector:

Power generation & transmission: 48.83% (Q1 FY26), 48.06% (FY25), 43.04% (FY24), 46.37% (FY23)
Nearly half of revenue from single industry
Power sector cyclicality creates volatility
Government policy changes (capex cuts, renewable subsidies changes) = immediate impact
Limited diversification despite serving 7+ industries

Promoter Partial Exit – ₹26 Cr OFS Signal:

Promoters Shyamsundar Rathi and Shailesh Rathi selling ₹26.01 cr (8.7% of issue)
Taking money off table at IPO
Questions: Why exit partially if business poised for 91% capacity expansion success?
May signal reduced confidence in future valuations
Only 91% proceeds for genuine growth vs 9% promoter pocket

Cyclical Industry – Wires/Cables Linked to Construction, Power, Industrials:

Wires/conductors demand tied to economic cycles
Construction slowdown = reduced cable demand
Industrial capex cuts = lower motor wire requirements
Cannot sustain performance during recessions
Government capex-dependent (power, railways) – policy changes create uncertainty

ANALYST VIEW: Dilip Davda states “The company posted steady growth in its top and bottom lines for the reported periods. It is expanding its capacities to meet the rising demand of its products. Based on its recent financial data, the issue appears reasonably priced.” Strong GMP (₹6-10, 11.5-19%).

POSITIVES: 44-year legacy (oldest in batch!), 4th largest in India (5.7% market share), massive 91% capacity expansion (19,680→37,680 MTPA), structural tailwinds (power, renewables, EVs, railways), mainboard listing, P/E ~13x reasonable. CONCERNS: Thin margins (2.7% PAT), negative cash flows (operating & investing), heavy debt (₹206 cr outstanding, only ₹100 cr repaid), extreme copper dependency (93% revenue), raw material volatility (LME-linked), geographic concentration (69% Gujarat-Maharashtra), competitive market, execution risk in ₹140 cr ALCU expansion, power industry concentration (48%), promoter partial exit (₹26 cr OFS).

Disclaimer: This information is based on publicly available sources including SEBI RHP filings, analyst reports, and company disclosures. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results.