IC Electricals files DRHP for SME IPO, revenue rises 44%
IC Electricals Company Limited has filed its DRHP for a ₹33.60 crore SME IPO opening on June 25, 2026, to fund working capital needs. The company, a B2G manufacturer for Indian Railways, reported a 44.12% rise in consolidated revenue to ₹143.04 crore in FY26, while PAT grew 210.82% over two years to ₹14.08 crore. However, the firm faces risks including negative operating cash flows and high working capital requirements.
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IC Electricals Company Limited has filed its Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) to raise ₹33.60 crore, primarily to fund working capital requirements. The New Delhi-based manufacturer, which specializes in electronic equipment for Indian Railways, reported a 44.12% increase in consolidated revenue from operations to ₹143.04 crore in FY26, up from ₹99.25 crore in FY24. The IPO, a fresh issue, is scheduled to open on June 25, 2026, and close on June 30, 2026.
Financial Performance
The company’s profitability improved significantly alongside revenue growth. Consolidated profit after tax (PAT) rose by 210.82% over the two-year period, reaching ₹14.08 crore in FY26 compared to ₹4.53 crore in FY24. For the year ended FY26, the PAT stood at ₹14.08 crore, an increase of 50.27% from the previous year's ₹9.37 crore. Total revenue for FY26 was reported at ₹143.81 crore.
| Metric (₹ Crore) | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Revenue from Operations | 99.25 | 121.89 | 143.04 |
| Total Revenue | 99.75 | 122.39 | 143.81 |
| Total Expenses | 93.72 | 109.75 | 124.88 |
| Profit Before Tax | 6.03 | 12.64 | 18.93 |
| Total Profit (PAT) | 4.53 | 9.37 | 14.08 |
Objects of the Issue
The net proceeds from the issue will be utilized for funding working capital requirements and general corporate purposes. The company has allocated ₹33.60 crore specifically for working capital. The general corporate purposes portion is capped at the lower of 15% of gross proceeds or ₹10 crore. The working capital requirements have grown substantially, increasing from ₹6,128.87 lakhs in FY24 to ₹11,896.73 lakhs in FY26.
Business Overview
IC Electricals operates across three verticals: Electronics, Rotating Machines, and Contracts (EPC/Turnkey). The business follows a Business-to-Government (B2G) model, with 82.01% of its revenue derived from the Ministry of Railways. Its manufacturing facility is located in Haridwar, Uttarakhand. The company was incorporated in 2005 and serves the railway sector with products such as regulators, battery chargers, traction motors, and turnkey electrification projects.
Key Risks and Financial Health
Despite the revenue and profit growth, the company faces financial risks related to cash flow and working capital intensity. IC Electricals reported negative cash flows from operations across all three years. The consolidated operating cash outflow widened to ₹(11.10) crore in FY26 from ₹(1.47) crore in FY24. Additionally, the company has outstanding borrowings of ₹7,542.45 lakhs as of March 31, 2026, with interest rates ranging from 7.55% to 18.75%.
How will the company address the widening gap between rising accounting profits and negative operating cash flows post-IPO?
What strategies are in place to reduce reliance on the Ministry of Railways given that 82% of revenue is currently derived from a single client?
Will the IPO proceeds be sufficient to service the outstanding borrowings carrying interest rates as high as 18.75%?
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