Raksan Transformers SME IPO

Strengths · 8

• 01Profit has grown more than four times in two years, from Rs 7.59 crore in FY2024 to Rs 20.38 crore in FY2025 and Rs 33.60 crore in FY2026.
• 02Sales have more than doubled over the same period, from Rs 162.52 crore in FY2024 to Rs 363.63 crore in FY2026.
• 03EBITDA rose from Rs 10.19 crore in FY2024 to Rs 46.72 crore in FY2026.
• 04Return ratios are very high, with RoCE of 43.09% and RoNW of 46.23%.
• 05The issue is priced moderately at about 16.98 times earnings on an EPS of Rs 16.08.
• 06Debt is low. Total borrowing was Rs 20.74 crore against a net worth of Rs 77.42 crore as on 31 March 2026, and it came down during the year.
• 07The company does a lot in house, including core cutting and slitting, wire drawing and tank fabrication, and has its own testing laboratory for routine and type tests.
• 08It has a long record of about 30 years and Rs 62.14 crore of the issue money goes into a new manufacturing facility at Liwaspur in Sonepat.

Risks · 9

• 01The profit margin is thin at 6.28%, which is normal in transformer making but leaves little room on fixed price orders.
• 02Sales growth has slowed sharply. Total income rose only 12% in FY2026 while profit rose 65%, so the profit jump came from margin rather than from selling more.
• 03Both existing units are small, at about 2,025 and 1,012.5 square metres, and both are at Rai in Sonepat, so all production sits in one location.
• 04Most customers are government bodies, distribution corporations and public sector undertakings. Payments from them are slow and prices are set through tenders.
• 05Copper and CRGO steel are the main raw materials. A sharp rise in either directly cuts margin on orders already priced.
• 06Rs 35 crore of the issue money goes into working capital, which shows how much cash a transformer order book ties up.
• 07This is a fresh issue combined with an offer for sale, so a part of the money goes to the selling shareholders and not to the company.
• 08Promoter holding will come down from 100% to 73.61% after the issue.
• 09This is an SME issue. One lot is 400 shares, which is about Rs 1.09 lakh at the upper band of Rs 273, and SME shares usually trade in low volume after listing.

Raksan Transformers Limited was started in July 1995. It makes transformers of different voltage ratings and holds ISO 9001:2015 certification.

Its range covers distribution transformers, power transformers, transformers made for solar projects and special purpose transformers. These are used in power generation, in transmission and distribution networks, and in industrial and infrastructure projects. The company began by repairing and servicing distribution and power transformers, and started manufacturing them in 2005-06.

It runs two manufacturing units at Rai in Sonepat district of Haryana, spread over about 2,025 square metres and 1,012.5 square metres, with a combined installed capacity of about 15,00,000 KVA for distribution transformers and 1,350 MVA for power transformers. The units have machinery for core cutting, coil winding, assembly, tank fabrication, oil filtration, welding and testing, and the company also does core cutting and slitting, wire and strip drawing and tank fabrication in house, along with its own testing laboratory for routine and type tests. Its customers include government bodies, power distribution corporations, public sector undertakings, utility companies, EPC contractors and industrial clients.

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