Vidya Wires IPO Details

Industry Outline

Global & Indian Wires and Cables Industry Outline

1. Market Size and Growth

Global Market: The global wires and cables market is substantial, valued at over USD 200 Billion and is projected to grow at a Compound Annual Growth Rate (CAGR) of around 4% to 6% through the end of the decade.

Regional Dominance: Asia Pacific is the largest and fastest-growing market, driven by rapid urbanization, industrialization, and infrastructure investments in countries like China and India.

Indian Market: The Indian wire and cables market is experiencing an accelerated growth phase, with projections showing a high CAGR (around 9-10%) driven by domestic demand and government initiatives.

2. Key Industry Drivers (Megatrends)

The demand for wires and cables is underpinned by massive, structural shifts:

🔌 Power and Infrastructure:

Government Initiatives: Huge investments in power transmission and distribution networks, smart grid rollouts, and urban infrastructure (e.g., Metro rail, highways).

Grid Modernization: Replacing aging overhead lines with more reliable underground and submarine cables.

☀️ Renewable Energy:

Ambitious national targets for solar and wind power are creating significant demand for specialized, high-performance cables (e.g., Solar Cables). A 1 MW solar project can require up to 50 km of cable.

🚗 Electric Mobility (EVs):

The global shift to Electric Vehicles (EVs) is driving demand for specialized, lighter-weight cables and harnesses for vehicle architectures and charging infrastructure.

🏗️ Construction & Real Estate:

Persistent residential and commercial construction activity fuels the demand for Low Voltage (LV) building wires and power distribution cables.

💻 Telecommunication:

The rollout of 5G networks and universal broadband initiatives (FTTH/Bharat Net) is driving massive demand for fiber-optic and high-speed data cables.

About Company

1. Core Business

Vidya Wires is a long-established Indian manufacturer of Winding and Conductivity Products made from copper and aluminum. These products are essential, critical components that serve as raw materials for electrical equipment manufacturers.

Primary Products (8,000+ SKUs):
- Winding Wires/Strips: Enamelled Copper Wires, Rectangular Strips, and Specialised Winding Wires. These are vital for converting electrical energy into mechanical power (and vice-versa).
- Conductors & Busbars: Copper Busbars, Paper-Insulated Copper Conductors, and Bare Copper Conductors.
- Specialty Products: Photovoltaic (PV) Ribbons, which are crucial for solar panel manufacturing.
End-User Industries: The company serves a diverse customer base, including:
- Power & Transmission (Transformers, Generators, T&D Equipment)
- Electrical Systems (Switchgear, Capacitors)
- New Age Sectors: Electric Vehicles (EV components), Renewable Energy (Solar/Wind), and Railways.

2. Market Position

Market Share: The company is currently ranked as the 4th largest manufacturer in India's winding and conductivity products industry by installed capacity.
Capacity Utilization: It has a high capacity utilization rate, reaching approximately 94.51% in Q1 FY26, indicating strong demand and efficient operations at its two existing plants in Gujarat.
Customer Base: Vidya Wires maintains a large and diversified customer base (370+ customers, including international clients in 18+ countries), with over 94% of its FY25 revenue coming from repeat customers, highlighting strong retention and industry trust.
Backward Integration: The company employs backward-integrated operations, which helps in controlling quality, ensuring supply consistency, and managing operational costs effectively.

3. Future Outlook and Growth Strategy

The company's future growth is strategically linked to its capacity expansion and the rapidly growing power and clean energy sectors:

Growth Strategy	Purpose and Sector Focus
Capacity Doubling (IPO Objective)	The Fresh Issue proceeds are primarily used to set up a new manufacturing unit in its subsidiary (ALCU). This expansion aims to nearly double its capacity from 19,680 MTPA to 37,680 MTPA, potentially increasing its market share to around 11%.
Diversification into Growth Segments	The new capacity will support the manufacturing of new, high-growth products like Solar Cables and other specialized components required for the surging EV and Renewable Energy markets.
Debt Reduction	Allocating ₹100 crore from the IPO to repay borrowings will reduce the company's interest expense, strengthen its balance sheet, and free up future cash flow for working capital and growth.
Operational Efficiency	Continued focus on automation and digitization across production lines to ensure higher precision, lower operating costs, and improved profitability (evidenced by improving EBITDA margins from 3.54% in FY23 to 4.32% in FY25).

4. Promoter & Key Management

The company is led by a management team with decades of experience in the winding and conductivity products industry:

Position	Name	Experience & Role
Promoter, Chairman & Whole Time Director	Shyam Sundar Rathi	Over 43 years of experience in the industry. Associated with the company since its incorporation.
Promoter & Managing Director (CEO)	Shailesh Rathi	Over 28 years of experience in the industry, holding a Bachelor's degree in Electrical Engineering. Appointed as MD in July 2024.
Promoter & Whole Time Director	Shilpa Rathi	Over 8 years of experience in purchase, HR, administration, and CSR activities.

5. Litigation and Key Concerns

Litigation Exposure: The company's DRHP/RHP discloses that it is involved in ongoing legal proceedings. While the severity and financial impact of these are typically detailed in the public documents, investors should be aware of this risk factor.
Raw Material Dependency: The company is highly reliant on key raw materials, primarily Copper and Aluminum, which account for a significant portion of its costs (copper is over 90% of material cost). This exposes its thin margins to volatility in global commodity prices.
Client Concentration: While diversified, the top 5 clients contributed about 22% of operating revenue in FY25, posing a moderate risk if business from any of these large clients were to reduce significantly.
Execution Risk: The planned capacity doubling is an aggressive move. Successful execution and timely commencement of the new facility are critical. Any delays or cost overruns could impact near-term margins and returns.

IPO Details

Detail	Information
Issue Type	Book-Built Issue, Mainboard
Price Band	₹48 to ₹52 per equity share
Total Issue Size	₹300.01 Crore
Issue Structure	Fresh Issue: ₹274 Crore (OFS: ₹26.01 Crore by promoters)
Bidding Dates	December 3, 2025 to December 5, 2025
Allotment Date (Tentative)	December 8, 2025 (Today)
Listing Date (Tentative)	December 10, 2025
Listing At	BSE, NSE
Minimum Retail Investment	1 Lot (288 shares) = ₹14,976 (at upper band)

IPO Timeline

Event	Date	Status
IPO Open Date	Tuesday, December 3, 2025	Closed
IPO Close Date	Friday, December 5, 2025	Closed
Basis of Allotment Finalization	Monday, December 8, 2025	Tentative (Expected Today)
Initiation of Refunds	Tuesday, December 9, 2025	Next Day
Credit of Shares to Demat	Tuesday, December 9, 2025	Next Day
IPO Listing Date	Wednesday, December 10, 2025	Tentative

Objectives of the IPO

The total issue size was ₹300.01 crore, consisting of a Fresh Issue of ₹274 crore and an Offer for Sale (OFS) of ₹26.01 crore. The net proceeds from the Fresh Issue will be utilized by the company for the following key objectives:

Funding Capital Expenditure: ₹140 crore for setting up a new project in the subsidiary, ALCU.

Debt Repayment: ₹100 crore for prepayment/repayment of outstanding borrowings.

General Corporate Purposes.

Vidya Wires Financial Highlights (FY23 - FY25)

The company has demonstrated a strong growth trajectory and operational efficiency over the last three fiscal years.

Period Ended	30 Jun 2025	31 Mar 2025	31 Mar 2024	31 Mar 2023
Assets	376.93	331.33	247.84	209.08
Total Income	413.09	1,491.45	1,188.49	1,015.72
Profit After Tax	12.06	40.87	25.68	21.53
EBITDA	18.67	64.22	45.52	35.84
NET Worth	178.37	166.36	125.54	100.11
Reserves and Surplus	162.37	150.36	121.54	95.86
Total Borrowing	162.75	145.63	109.71	97.11
Amount in ₹ Crore

Financial Insight: While the industry typically operates on thin margins (as seen by the ~4% EBITDA margin), the company has shown a remarkable ability to improve its margins and grow profits significantly faster than revenue (PAT CAGR of 37.86% vs. Revenue CAGR of 21.23%).

📊 Key Performance Indicators (KPIs)

Key Ratio	FY25 Value	Peer Comparison / Context
Return on Net Worth (ROE)	24.57%	Superior. Significantly higher than the peer average (e.g., Ram Ratna Wires at ~14.39%, Precision Wires at ~15.63%). This indicates excellent shareholder value creation.
Return on Capital Employed (ROCE)	19.72%	Healthy. Shows effective utilization of total capital (debt + equity) in the business.
Fixed Assets Turnover Ratio (Times)	36.24x	Highest. This is one of the company's biggest strengths, meaning its manufacturing assets are extremely efficient at generating revenue (generating over ₹36 in revenue for every ₹1 invested in fixed assets).
Debt to Equity Ratio	0.88	Healthy. Below 1.0, indicating a conservative financial risk profile. The IPO proceeds used for debt repayment will further strengthen this ratio.
Trade Payable Days	2 Days	Tight. This very low number shows the company pays its suppliers almost immediately, which can impact cash flow but helps secure raw material supply.
P/E Ratio (Post-IPO at upper band ₹52)	~22.94x	Attractive Discount. This is substantially lower than the industry average P/E, which typically ranges from 40x to 50x (e.g., Precision Wires at 53.45x, Apar Industries at 44.36x).

SWOT Analysis

🟢 Strengths (Internal Factors)

Superior Return on Equity (ROE): The company exhibits an exceptionally high ROE of approximately 24.57% (FY25), which is significantly higher than most listed peers (typically in the 12%–18% range), indicating highly efficient use of shareholder capital.
Asset Efficiency & High Utilization: Vidya Wires has an industry-leading Fixed Asset Turnover Ratio of ~36x (FY25). This shows that its current manufacturing plants are highly efficient, generating high revenue per unit of fixed capital investment. Capacity utilization reached 94.51% in Q1 FY26.
Strong Financial Growth: Revenue has grown at a CAGR of over 21% (FY23-FY25), while Profit After Tax (PAT) has surged even faster at nearly 38% over the same period, indicating improving margins and operating leverage.
Product & Customer Diversification: The company offers over 8,000 SKUs and serves 370+ customers across multiple sectors (Power, Electrical, Clean Energy, EV, Railways), with over 80% of revenue from repeat customers, reducing reliance on a single sector or client.
Backward Integration: Control over the raw material processing chain (like in-house manufacturing of copper rods) helps maintain quality, ensure consistent supply, and provide a buffer against cost volatility.

🟡 Weaknesses (Internal Factors)

High Raw Material Dependency: Over 90% of revenue and cost of materials are derived from copper. This exposes the company's thin margins (PAT Margin is ~2.74%) to sharp, sustained volatility in global commodity prices.
Working Capital Intensive: The business model, typical of high-growth manufacturing, results in a significant portion of capital being tied up in inventory and receivables, leading to reported negative net cash flows from operating activities in some recent periods.
Supplier Concentration: The company relies heavily on a few major suppliers for its raw materials, with the top 5 vendors accounting for nearly 90% of raw material purchases. Any disruption here could affect production.
Execution Risk of Expansion: The plan to nearly double capacity by setting up the new ALCU unit carries substantial execution risk, including potential delays or cost overruns that could impact the targeted returns.

📈 Opportunities (External Factors)

Structural Industry Growth: The Indian Wires and Cables industry is projected to grow at a CAGR of 11%–13% (FY24-FY29E), driven by massive government focus on infrastructure.
Power, EV, and Renewable Tailwinds: India's push for 500 GW of renewable energy by 2030, rapid EV adoption (requiring specialized cables/components), and extensive grid modernization (T&D) create massive, long-term demand for its products.
Market Share Gain: The IPO-funded capacity expansion aims to grow the company's market share from ~5.7% to a targeted 11%, positioning it as the third-largest manufacturer in its segment.
Product Value-Addition: Diversification into high-tech products like Solar Cables, PV Ribbons, and EV components offers an opportunity to capture premium margins and revenue streams.
Export Potential: India is a net exporter of wires and cables, and the global "China Plus One" strategy presents a significant opportunity to grow its export revenue (currently ~14%).

🛑 Threats (External Factors)

Intense Competition: The market is highly competitive, featuring large, established, integrated players (e.g., Polycab, KEI, Apar Industries) and numerous unorganized players, which limits the company's pricing power.
Commodity Price Fluctuation: Sharp and unpredictable swings in copper and aluminum prices pose a continuous threat to the already thin profit margins.
Regulatory/Tax Litigation: The company has disclosed exposure to ongoing legal and tax proceedings, which, if finalized unfavorably, could result in financial liabilities or reputational damage.
Economic Slowdown: The company's demand is directly linked to the capital expenditure cycles in the power, infrastructure, and industrial sectors. Any prolonged economic or industrial slowdown could severely impact order books.

Competitive Analysis & Market Peers

Company	FY25 Operating Revenue (₹ Cr)	P/E Ratio (Post-IPO/Current)	Return on Equity (ROE)	Key Differentiator
Vidya Wires	1,491.45	~27.1x (at ₹52)	24.57% (Highest)	Exceptional asset turnover and high ROE; aggressive capacity expansion plan.
Precision Wires	4,014.8	~53.45x	15.63%	Larger scale in the specialized winding wire segment.
Ram Ratna Wires	3,676.8	~42.19x	14.39%	Focus on super enamelled copper wires and cables.

Should You Apply For IPO?

Investment Objective	Recommendation	Rationale
Listing Gains (Short-Term)	Neutral to Avoid.	The low and volatile GMP (around 6%–8%) suggests minimal quick profits. The low allotment probability makes a guaranteed listing gain highly unlikely.
Long-Term Investment	Subscribe.	The company has strong fundamentals, attractive valuations relative to peers (P/E discount), a high RoNW, and a clear growth plan linked to India's booming power and green energy sectors. This stock is fundamentally sound for wealth creation over a 3-5 year horizon.

FAQs

1. What are the key dates for the Vidya Wires IPO?

Event	Date	Status
IPO Open Date	Tuesday, December 3, 2025	Closed
IPO Close Date	Friday, December 5, 2025	Closed
Basis of Allotment Finalization	Monday, December 8, 2025	Tentative (Expected Today)
Listing Date (Tentative)	Wednesday, December 10, 2025	Upcoming

2. What was the Price Band and Lot Size?

Price Band: ₹48 to ₹52 per equity share (Face Value: ₹1 per share).
Retail Lot Size: 288 shares (Minimum investment at the upper band: ₹14,976).

3. What is the business of Vidya Wires Limited?

Vidya Wires is a manufacturer of Winding and Conductivity Products, primarily using copper and aluminum. These products—such as enamelled copper wires, conductors, and strips—are essential raw materials for manufacturing electrical equipment like motors, transformers, generators, and components for the renewable energy (Solar) and Electric Vehicle (EV) sectors.

4. How was the IPO subscribed?

The IPO was highly oversubscribed:

Overall Subscription: Approximately 28.53 times.
Retail Segment: Subscribed around 29.98 times.
NII (HNI) Segment: Subscribed around 55.94 times.

5. Where will the shares be listed?

The equity shares of Vidya Wires Limited will be listed on both the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange).

6. What are the main objectives of the IPO?The two primary objectives for the company using the Fresh Issue proceeds are:

Capacity Expansion (₹140 Crore): To fund capital expenditure for setting up a new manufacturing plant in its subsidiary to double its capacity.

Debt Reduction (₹100 Crore): For the prepayment/repayment of outstanding borrowings to strengthen the balance sheet.

7. Is the valuation attractive compared to peers?

Yes, from a fundamental perspective, the valuation is considered attractive. At the upper band of ₹52, the post-IPO P/E ratio is around 27.1x. This is significantly lower than its direct, comparable peers in the winding wire segment, who typically trade at P/E multiples of 40x to 55x.

8. How can I check the allotment status?

You can check the allotment status on the website of the Registrar to the Issue, which is KFin Technologies Limited. You will need your PAN number, application number, or DP ID/Client ID.Would you like me to check the official status update or provide the direct link to the registrar's website once the allotment is finalized later today?