Om Power Transmission Limited is coming out with a mainboard IPO that gives investors exposure to India’s power transmission EPC story. The company combines high growth, strong return ratios and a healthy order book, but also carries classic EPC risks around working capital, customer concentration and execution. Overall, this looks suitable for investors comfortable with infra cyclicality and PSU‑linked receivables, with a holding horizon of at least two to three years rather than a pure listing‑gain trade.
Issue, size and valuation
- Price band: ₹166–₹175; lot: 85 shares; issue size: ₹150.06 crore (fresh issue ~₹132.56 crore, OFS ~₹17.50 crore).
- Price band: ₹166–₹175 per share
- Face value: ₹10 per share
- Issue period: 9–13 April 2026
- Lot size: 85 shares (minimum retail outlay about ₹14,875 at the upper band)
- Listing: BSE and NSE, with tentative listing date 17 April 2026
Peer context (TTM P/E):
| Company | Nature | TTM P/E |
|---|---|---|
| Om Power (IPO) | T&D EPC (mid/small) | ~19.5x FY25; mid‑teens on annualised FY26Eticker.finology+1 |
| Techno Electric | Power T&D EPC | ~23–26xsmart-investing+1 |
| KEC International | Multi‑vertical infra EPC | ~22–24xsmart-investing+1 |
So Om Power is coming at a discount to better‑known listed EPC peers, but with justifiable haircut for its smaller size, customer concentration.
Business overview
Om Power Transmission is a power transmission infrastructure engineering, procurement and construction (EPC) company. Incorporated in 2011 and headquartered in Ahmedabad, it focuses on designing, supplying, erecting, testing and commissioning:
- High‑voltage (HV) and extra‑high voltage (EHV) transmission lines in the 11–400 kV range
- Substations up to 220 kV
- Underground power cable projects, including cable laying and associated civil works
- Operation and maintenance services for existing substations and lines
The business model is predominantly turnkey EPC, working for state transmission utilities, DISCOMs and other government‑linked entities. Over the years, Om Power has executed transmission line and substation projects mainly in Gujarat, and has also moved into underground cabling and O&M contracts to widen its offering.
Client profile and concentration
- Business is heavily skewed to state/PSU utilities; GETCO alone accounts for about 71.55% of revenue, a very high single‑customer dependence.
- RHP flags the usual EPC issues around grid availability, regulatory delays, commodity volatility and payment delays from DISCOMs, though it notes no material impact so far in last 3 years.
Financial track record
Scale and growth
From restated financials (₹ lakh):
| Period | Revenue from ops | EBITDA | EBITDA % | PAT | PAT % |
|---|---|---|---|---|---|
| FY23 | 12,023.6 | 1,192.9 | 9.9% | 623.7 | 5.2% |
| FY24 | 18,276.2 | 1,446.6 | 7.9% | 741.2 | 4.1% |
| FY25 | 27,943.5 | 3,565.6 | 12.7% | 2,208.5 | 7.9% |
| 9M FY26 | 27,454.3 | 3,424.5 | 12.4% | 2,336.8 | 8.5% |
Key points:
- Revenue CAGR FY23–25 ≈ 52%, PAT CAGR ≈ 88%, driven by scale‑up in orders and margin expansion.
- Margins have structurally improved: EBITDA margin moved from ~9.8% (FY23) to 12.7% (FY25); 9M FY26 has broadly sustained at 12.4%.
- RoE/ROCE are strong: FY25 RoE ~35.8%, ROCE ~41.8%; even on annualised 9M FY26, RoE remains above 24%.
This is a high‑growth, high‑return profile compared to many listed infra/EPC names, albeit on a smaller base.
Balance sheet, leverage and working capital
The company’s balance sheet is reasonably healthy but clearly working‑capital intensive.
- As of 31 December 2025, net worth stood near ₹120 crore.
- Total borrowings were around ₹38.5 crore, implying a modest debt‑to‑equity ratio of about 0.3x.
- Contingent liabilities were small relative to net worth.
However, receivables and other current assets are high. Trade receivables of about ₹144 crore at the end of December 2025, against 9M FY26 revenue of about ₹274.5 crore, indicate long collection cycles from utility clients. This is reflected in volatile cash flows: operating cash flow was negative in 9M FY26 despite healthy reported profits, due mainly to the working capital build‑up.
Such receivable‑heavy cash‑flow profiles are common in EPC contracts with state entities, but they do mean liquidity and bank line utilisation must be monitored closely, especially when the business is scaling up rapidly.
Use of IPO proceeds
The net proceeds from the fresh issue are earmarked for clearly defined purposes that are aligned with the core business.
- Capital expenditure on machinery and equipment
Around ₹11.2 crore will be deployed for new construction and testing equipment such as stringing units, cranes, mobile lighting towers, cable testing kits and a cable fault locator van. This supports in‑house execution capabilities for high‑voltage lines and underground cabling work. - Prepayment/repayment of debt
About ₹25 crore will be used to repay or prepay certain outstanding borrowings. This will materially reduce leverage and interest costs, strengthening the balance sheet and freeing up borrowing capacity for future bonding and working capital needs. - Long‑term working capital
Approximately ₹55 crore is allocated to fund incremental working capital, primarily to support growth in receivables, inventory and site advances. Given the nature of EPC contracts, this is arguably the most critical use of funds. - General corporate purposes
The remaining portion, within regulatory limits, will go towards general corporate purposes, which may include business development, systems, and other growth‑linked spends.
Overall, the deployment plan appears sensible and focused: it supports capacity enhancement, de‑leveraging and working‑capital requirements rather than funding unrelated diversification or large promoter exits.
Key strengths
1. Strong tailwind in power T&D
India’s power sector push is shifting from generation addition to improving transmission and distribution infrastructure, integrating renewables, reducing losses and enhancing grid reliability. This translates into a multi‑year capex cycle across transmission networks, substations and distribution upgrades, directly benefiting specialised EPC players in this space.
Om Power’s core competency in HV/EHV lines, substations and underground cabling places it squarely in the middle of this opportunity.
2. High growth and improving profitability
The company has delivered over 50% revenue CAGR and even faster profit growth over the past three financial years, with EBITDA and PAT margins moving into the low‑double‑digit and high‑single‑digit range, respectively. It has also generated attractive RoE and RoCE metrics, which are not common across the broader infra universe.
If management can sustain current bidding discipline and execution quality, these margins and return ratios provide a strong base for value creation.
3. Healthy order book and visibility
The order book of about ₹744.6 crore, or roughly 2.5–2.7x FY25 revenue, provides good visibility over the next two to three years. The split across EPC and O&M projects also offers some diversification in revenue type, with O&M contracts providing steadier, smaller ticket inflows alongside lumpier EPC execution.
4. Strengthening balance sheet post‑IPO
Even before the issue, leverage is modest. After applying proceeds to debt repayment, the company will be nearly net‑debt‑free, which is a comfortable position for an EPC business that needs bonding limits and bank support. A stronger equity base also improves its ability to qualify for larger projects and negotiate better terms with lenders.
5. Reasonable valuation compared to peers
At about 19.5x FY25 earnings (and lower on forward numbers), the issue is priced at a discount to the better‑known T&D EPC names while offering strong growth and return ratios. That leaves some room for re‑rating if the company can demonstrate consistent execution, stable margins and improvement in cash conversion.
Key risks and weaknesses
1. High customer concentration
A major red flag is concentration risk. A large share of the company’s revenue is derived from a single major state transmission utility, Gujarat Energy Transmission Corporation (GETCO), and, more broadly, from government utilities.
Any slowdown in orders, payment delays, changes in tendering norms or relationship issues with key entities can materially affect both topline and cash flows. Customer diversification will be a crucial monitorable.
2. Working capital intensity and negative recent cash flow
Receivables and unbilled revenues are high relative to sales, leading to stretched cash conversion cycles. While profit and RoE metrics look robust on paper, operating cash flow in 9M FY26 was negative due to the build‑up of receivables and other current assets as the business scaled.
If collections do not improve or if there are delays at the utility level, the company may have to rely heavily on bank lines and could face liquidity stress despite reporting healthy profits.
3. Execution, safety and project risk
Transmission projects involve difficult terrain, heavy equipment and high‑voltage environments. The company has disclosed at least one worker fatality and related compensation claim, underlining the operational risks involved.
Execution delays, safety incidents, cost overruns and liquidated damages are inherent risks in EPC, and can quickly erode margins on specific projects if not managed tightly.
4. Geographic and segment concentration
The business has historically been concentrated in Gujarat and predominantly focused on the power T&D segment. While the company has started venturing into projects in other states, the business is not yet as geographically diversified as larger peers.
This concentration makes it more vulnerable to changes in state‑level policies, budget allocations and political cycles.
5. Governance depth and promoter dependence
The promoters are deeply involved in day‑to‑day operations. Except for two independent directors, most board members do not have prior experience as directors of listed companies. Working capital facilities are backed by promoter personal guarantees.
While there is no specific adverse governance disclosure, the company will have to demonstrate that its processes, internal controls and board oversight are robust enough for a listed environment as scale increases.
6. Limited listing‑gain visibility
With a modest grey‑market premium (low single digits above the upper band) and only moderate subscription early on, the near‑term listing upside does not look very exciting. The payoff here is more likely to come from medium‑term earnings delivery and re‑rating rather than a big one‑day pop.
Counterarguments to a positive view
Even though the fundamental argument favours subscribing, there are credible reasons for a more cautious or “avoid for now” stance:
- If receivables continue to grow faster than revenue and operating cash flows remain negative, reported RoE and earnings growth will not translate into shareholder value, and the stock could de‑rate despite good accounting numbers.
- The dependence on one key state utility and region leaves little margin for error. Any disruption in GETCO’s capex or payment discipline could hit revenues, profits and liquidity simultaneously.
- Current margins may reflect a favourable project mix and commodity environment. In a more competitive or input‑cost‑inflationary phase, EBITDA margins could normalise down, making current valuations look closer to fair than cheap.
- Investors who are patient could wait for post‑listing price discovery, early quarterly results and evidence on cash flows and diversification, rather than committing capital at the IPO stage.
Final stance: Subscribe, with a defined risk profile
Taking all factors together, Om Power Transmission’s IPO offers:
- A focused play on the power transmission EPC cycle
- Strong recent growth, healthy margins and high return ratios
- A sizeable order book and a strengthened balance sheet post‑issue
- Valuation at a discount to larger, established peers
Balanced against:
- Significant customer and geography concentration
- Structurally heavy working‑capital needs and negative recent cash flow
- Execution and safety risks inherent to EPC
- Limited near‑term listing‑gain visibility
On balance, this looks appropriate as a “Subscribe” for investors who:
- Understand infra/EPC and PSU‑linked receivable risk
- Are comfortable with volatility and a high‑beta profile
- Have a holding horizon of at least 2–3 years
- Keep position sizing moderate and are willing to track order inflow, receivables, cash flows and diversification closely over the next few quarters
For investors focused purely on short‑term listing gains or who strongly dislike working‑capital‑intensive EPC models, a “wait and watch” approach post listing would be more suitable.
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