Parth Electricals IPO Lists at 2% Premium

The electrical equipment manufacturer, Parth Electricals & Engineering Limited, made a modest debut on NSE SME on August 11, 2025. After closing its IPO bidding between August 4-6, 2025, the company commenced trading with a 2.35% premium at ₹174, reflecting cautious investor sentiment despite strong subscription response and established client relationships in the power sector.

Parth Electricals Listing Details

Parth Electricals Limited launched its IPO at ₹170 per share with a minimum investment of 1,600 shares costing ₹2,72,000. The IPO received strong response with a subscription of 23.77 times - NII leading at 43.93 times, individual investors at 20.28 times, and QIB at 17.65 times, indicating solid investor interest in the electrical equipment business model.

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First-Day Trading Performance Outlook

Listing Price: The Parth Electricals share price opened at ₹174 on NSE SME, representing a premium of 2.35% from the issue price of ₹170, delivering modest gains for investors and reflecting realistic market expectations for the electrical equipment sector.

Growth Drivers and Challenges

Growth Drivers:

Exceptional Financial Growth: Revenue surged 102% to ₹176.20 crore in FY25 with PAT jumping 119% to ₹10.12 crore, reflecting robust demand for electrical equipment and operational efficiency improvements.

Prestigious Client Portfolio: Serving major corporations including Aditya Birla, Ultratech Cement, L&T, RIL, Adani, Tata Power, Schneider Electric, BHEL, and Siemens providing stable revenue streams.

Manufacturing Expansion Plans: Establishing GIS manufacturing facility in Gujarat and new facility in Odisha to enhance production capacity and geographical presence.

Strong Order Book: Approximately ₹230 crore orders on hand to be completed by 2026 providing revenue visibility and business stability.
 

Challenges:

High Valuation Metrics: Trading at elevated P/E of 22.97x post-IPO raising concerns about valuation sustainability in the electrical equipment sector.

Moderate Debt Leverage: Debt-to-equity ratio of 0.82 with total borrowings of ₹33.33 crore requiring careful debt management during expansion phase.

Competitive Market Environment: Operating in competitive electrical equipment manufacturing sector with established players and margin pressures.

Execution Risks: Large-scale manufacturing expansion projects requiring significant capital investment and execution capabilities affecting future returns.

Utilisation of IPO Proceeds

Manufacturing Expansion: ₹20 crore for establishing GIS manufacturing facility in Gujarat and ₹19 crore for manufacturing facility in Odisha, significantly expanding production capabilities.

Debt Reduction: ₹15 crore for repayment of short-term borrowings improving capital structure and reducing financial leverage burden.

Financial Performance of Parth Electricals

Revenue: ₹176.20 crore for FY25, showing exceptional 102% growth from ₹87.17 crore in FY24, reflecting strong demand recovery and market expansion in the electrical equipment segment.

Net Profit: ₹10.12 crore in FY25, representing substantial 119% growth from ₹4.61 crore in FY24, indicating improved operational efficiency and margin expansion.

Financial Metrics: Strong ROE of 24.92%, solid ROCE of 23.38%, moderate debt-to-equity of 0.82, solid RoNW of 24.92%, healthy PAT margin of 5.79%, moderate EBITDA margin of 10.04%, reasonable Price to Book Value of 4.13, and market capitalisation of ₹232.36 crore.